Govt Urged To Plug Gaps In Self-Employment Support

Ministers must extend eligibility criteria currently excluding more than 3 million in self-employment during the Covid-19 crisis, MPs and campaign groups say.

The Government is coming under increasing pressure to fill the gaps in its emergency coronavirus wage subsidy schemes in the March budget to help millions of those in self-employment and workers barred from furlough. MPs cite stress caused by financial security, a potential lost generation of unemployed and young Britons facing a jobs crisis.

The chancellor, Rishi Sunak, has time and again rebuffed opportunities to plug the gaps in furlough and the income support scheme (SEISS) for those in self-employment over the last year since the pandemic began, according to MPs and campaign groups.

Caroline Lucas, the Green Party co-chair of the all-party parliamentary group Gaps in Support, said the fact that more than 3 million people had been totally excluded was ‘completely unacceptable’. It was under-standable at the beginning of the pandemic, she said, when the Treasury had to act promptly that some new support schemes didn’t work efficiently.

But it’s a scandal, she added, that almost one year later, so many are still falling through the cracks. The chancellor must now acknowledge that there are real and arbitrary omissions in the schemes he created and make support for excluded groups the centrepiece of his budget announcement next month.

Number in self-employment falls by 500,000

While the Government’s innovative furlough scheme has supplemented the wages of around 10m jobs since its inception in March last year, as many as 2.7m claims have been made to SEISS, the Treasury’s similar scheme for those in self-employment. Yet experts have warned millions of people have not benefited because they do not meet the eligibility criteria.

Shadow chancellor, Anneliese Dodds, stated those in self-employment are the backbone of the UK economy, which is why Labour has urged the chancellor frequently to plug the gaps in his support schemes.

As the British economy grapples with the worst recession for 300 years, Sunak is also under pressure from business and unions who warn of widespread unemployment without further financial assistance.

Official figures show full-time work has risen to the highest levels on record as part-time jobs and self-employment have plummeted, and freelancers and those in zero-hours contracts bear the worst of the crisis. At the start of the pandemic, there were 5.1 million self-employed in the UK, a figure that has fallen to below 4.6 million.

According to the Association of Independent Professionals and the Self-Employed (IPSE), around 3 million people have been barred from the Government’s support schemes, including about 700,000 limited company directors and 200,000 who had recently started working for themselves but lacked the documentation to receive wage subsidies.

Number on universal credit trebles

As many as 20pc of SMEs surveyed by the Federation of Small Business (FSB) have said they received no financial support at all from the state. Mike Cherry, national chair of the FSB, said something like one million small business owners had been frozen out.

Calling for urgent action before the budget, he said action was needed now to address the ‘extremely concerning’ gaps and arbitrary criteria, as announcements in March with changes taking effect from then on would prove too late.

Since the start of the crisis, the number of self-employed on universal credit benefits has risen by more than 300pc, to reach more than 200,000. IPSE said the chancellor needs to reform the SEISS urgently to allow people who could now prove their income using 2019-2020 tax returns, as well as company directors and those earning over £50,000, to claim support.

Rachel Flower, of the ExcludedUK campaign group, representing workers who have missed out on support, said the exclusions have pushed a whole sector of society into debt and poverty, in contrast to those who have been supported.

A spokesperson for the Treasury said those who are not eligible for support can still benefit from the improved welfare safety net, and the plan for jobs includes programmes such as Kickstart along with record investment in skills so that job seekers can find their first, next or new job if needed.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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