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UNIONS, think tanks and the Labour Party welcomed a belated announcement of relief for the self-employed today — but said questions remained about how rapidly support could be rolled out to hard-pressed workers.
Chancellor Rishi Sunak confirmed the Covid-19 support package almost a week after the Tories had announced an 80 per cent government subsidy for bosses to pay workers while firms temporarily shut down.
Under the new plan self-employed workers will get a grant worth 80 per cent of their average earnings over the last three years, up to a maximum of £2,500 a month. The scheme is only open to those with annual profits of less than £50,000.
The first payment from June will be worth three months’ pay and will require an online application to HMRC before it is paid into a bank account.
For self-employed people who are struggling in the immediate term, the Treasury said that they will be able to access “business interruption loans” and benefits of £94 a week through the universal credit scheme.
Almost a quarter of self-employed workers were already living in relative poverty before the coronavirus crisis threatened their livelihoods, a study by the Institute for Fiscal Studies (IFS) suggests.
The IFS research indicated that 23 per cent of self-employed workers were in relative poverty in 2017-18 after housing costs were deducted, compared with 11 per cent of employees.
Shadow chancellor John McDonnell said: “We’re relieved that the Chancellor, responding to the advocacy of the Federation of Small Businesses and trade unions and others, has brought forward the protection scheme for the self-employed.
“My worry is that if people cannot get access to the scheme until June it will simply be too late for millions.
“Asking people to rely on universal credit when more than 130,000 people are queuing online will be worrying to many people, so there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.”
TUC general secretary Frances O’Grady said unions should be consulted on how the scheme is rolled out so that support “reaches workers as soon as possible.”
She also said: “With so many of the self-employed facing a collapse in their earnings the Chancellor is right to act.
“This is a welcome step forward for self-employed and freelance workers across the economy.”
The Musicians’ Union and creative industries union Bectu thanked their members for lobbying the government and MPs to act.
Joseph Rowntree Foundation head of economics Dave Innes said it is “crucial” that self-employed people with little to no savings aren’t forced by necessity to step out of self-isolation and go to work if the system takes time to implement.
He added: “Our social security system should offer a public service to all of us when we need it, but relying on it may not be adequate to keep people out of poverty and could mean further delays, and advances which will need to be paid back.”
Struggling self-employed people will “sleep easier” knowing that the government has finally announced a coronavirus rescue package, GMB union general secretary Tim Roache said.
Class think tank director Faiza Shaheen said that the stark change in government policy from last week shows public pressure works.
She said: “Rishi Sunak started with business loans and then had to add workers and now self-employed. Let’s keep shouting loud about levels of statutory sick pay and benefits.”
Mr Sunak said his rescue deal shows he is treating the self-employed like employed workers, but that in return everyone must pay in — hinting at reforms that could see the self-employed lose some tax advantages.
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