Govern­ment fends off crit­i­cism with plan to pay self-em­ployed

Chan­cel­lor to an­nounce tax­payer will sup­port up to 80% of earn­ings

The Guardian - - Front Page - Heather Stewart Rowena Ma­son Kate Proc­tor

The chan­cel­lor, Rishi Su­nak, is ex­pected to an­nounce that the tax­payer will pay self-em­ployed work­ers up to 80% of their re­cent earn­ings to help con­tain the eco­nomic im­pact of coro­n­avirus, as 470,000 ex­tra ben­e­fits claims prompted warn­ings of an un­em­ploy­ment cri­sis.

Su­nak has been un­der grow­ing pres­sure to do more for the UK’s 5 mil­lion self-em­ployed work­ers af­ter an­nounc­ing an un­prece­dented job re­ten­tion scheme for em­ploy­ees last Fri­day, which will see thou­sands paid to stay at home.

It comes as Covid-19 claimed the life of a 21-year-old woman from Buck­ing­hamshire, ac­cord­ing to her fam­ily, and Bri­tain’s deputy am­bas­sador to

Hun­gary, who was 37. The num­ber of con­firmed UK cases stood at just over 8,000 last night. The death toll rose by 41 yes­ter­day to 463.

Boris John­son promised yes­ter­day that the govern­ment was pre­par­ing to “put its arms around ev­ery worker”.

The prime min­is­ter said the self­em­ployed would be of­fered “par­ity” with em­ploy­ees – though White­hall sources cau­tioned that did not mean the two schemes would be iden­ti­cal.

De­tails of the sup­port pack­age were still be­ing fi­nalised last night but sources with knowl­edge of the plan sug­gested it would echo the prom­ise of cov­er­ing 80% of re­cent earn­ings that Su­nak made to em­ploy­ees last week.

It could be sub­ject to a lower cap than the £2,500 in monthly pre-tax in­come avail­able in that scheme, how­ever – be­cause the self-em­ployed tend to pay less tax.

Some groups, in­clud­ing those al­ready claim­ing uni­ver­sal credit, could be ex­cluded.

Speak­ing at the daily Down­ing Street press con­fer­ence, the prime min­is­ter said: “I gen­uinely don’t think there’s been a time in our his­tory in the last cen­tury, cer­tainly, when the govern­ment of this coun­try has put its arms around so many peo­ple to get us through a very tough time.”

John­son added: “We will

‘The govern­ment has put its arms around so many peo­ple ...’ Boris John­son Prime min­is­ter

get through it, and we will get through it to­gether.”

Su­nak sig­nif­i­cantly in­creased the gen­eros­ity of uni­ver­sal credit (UC) as part of last week’s pack­age, and made it avail­able to more self-em­ployed work­ers.

A sharp surge in claims for UC has un­der­lined the se­vere eco­nomic toll the coro­n­avirus is al­ready tak­ing on Bri­tain’s work­force.

The work and pen­sions secretary, Thérèse Cof­fey, re­vealed yes­ter­day that 477,000 peo­ple had ap­plied for the ben­e­fit in the past nine days. That is more than dur­ing any en­tire month of the 2008-09 fi­nan­cial cri­sis.

“We don’t know if they’re self­em­ployed or at dif­fer­ent stages, and I want to as­sure peo­ple that help, even if it’s not cur­rently the level of help they would like, is there to help them through the safety net of the welfare state,” she said.

Karl Hand­scomb, econ­o­mist at the Res­o­lu­tion Foun­da­tion, said: “The un­prece­dented surge in new uni­ver­sal credit claims showed that the UK was al­ready in the midst of an un­em­ploy­ment cri­sis. The in­crease in claims was putting huge pres­sure on our so­cial se­cu­rity sys­tem, and was driven by a huge hit to fam­ily in­comes.

“The govern­ment was right to in­crease the gen­eros­ity of the ben­e­fits sys­tem last week. It now needs to en­sure the re­sources are there so that claims are pro­cessed quickly.”

The Department for Work and Pen­sions (DWP) is re­de­ploy­ing 10,000 staff to process the ex­tra­or­di­nary up­surge in new ap­pli­ca­tions, mak­ing it the main fo­cus in the weeks ahead. Its per­ma­nent secretary, Peter Schofield, said: “We made a de­ci­sion that man­ag­ing claims and mak­ing pay­ments is a No 1 pri­or­ity for DWP. Op­er­a­tionally, we can de­pri­ori­tise other things.”

The department has so far re­de­ployed 1,500 staff to help with the sharp rise in UC claims and is to in­crease this to 3,900 this week.

John McDon­nell, who will re­turn to the back­benches in 10 days when a new Labour leader takes over, used what is likely to be one of his fi­nal speeches as shadow chan­cel­lor to call for the govern­ment to an­nounce de­tails of its scheme for sup­port­ing self-em­ployed work­ers ur­gently.

“If peo­ple claim fraud­u­lently while still work­ing, they will rightly be pros­e­cuted. But right now mil­lions of cab­bies, child­min­ders, plumbers, elec­tri­cians, painters and dec­o­ra­tors and ac­tors have all lost work or closed down their busi­nesses. As have builders, des­ig­nated as the self-em­ployed un­der the Con­struc­tion In­dus­try Scheme and they have no in­come. They need a so­lu­tion, now,” he said.

Mean­while, busi­nesses called for clar­ity about who can keep trav­el­ling to work, as firms urged staff to come in de­spite Mon­day’s plea by the prime min­is­ter to “stay at home”.

Carolyn Fair­bairn, direc­tor gen­eral of the CBI, tweeted: “It’s clear that many firms do not know whether to stay open or to close.” She said she would re­quest bet­ter guid­ance.

The warn­ings come amid wide­spread con­fu­sion among busi­nesses about how to re­spond to the lock­down. Hal­fords, the car parts, bike and ser­vic­ing group, is re­open­ing some of its

stores this week af­ter be­ing des­ig­nated as an es­sen­tial service. It had closed its shops on Mon­day night as John­son ad­dressed the na­tion.

Mike Ash­ley’s Sports Di­rect re­tail chain sought to re­main open but had to back­track af­ter a pub­lic out­cry.

Frances O’Grady, TUC direc­tor gen­eral, said the govern­ment needed to crack down on non-es­sen­tial firms mak­ing staff at­tend work, telling min­is­ters they needed to di­rectly in­ter­vene if em­ploy­ers flouted the rules.

“Com­pa­nies like Sports Di­rect shouldn’t be putting their prof­its be­fore peo­ple’s lives. No one in nonessen­tial ser­vices should be forced to go to work. And no one should be sacked for fol­low­ing of­fi­cial in­struc­tions and staying home,” she said.

Off-li­cences and other shops li­censed to sell al­co­hol can now stay open, af­ter an 11th-hour change, while sev­eral com­pa­nies are lob­by­ing min­is­ters to be al­lowed spe­cial treat­ment.

The Manch­ester metro mayor, Andy Burn­ham, called for tough en­force­ment against com­pa­nies forc­ing their staff to travel to work in non-es­sen­tial jobs dur­ing the lock­down.

He said: “In the ab­sence of a clear govern­ment in­struc­tion to end nonessen­tial work, I am tak­ing le­gal ad­vice about whether Greater Manch­ester po­lice or other agen­cies can take en­force­ment ac­tion.”

▲ Rishi Su­nak: un­der pres­sure to do more for the UK’s self-em­ployed

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