The U.K. government highlighted the complexity of the diverse self-employed population as it sought to assure lower-paid self-employed people losing income due to the coronavirus outbreak that financial support is on the way.
“We know many self-employed people are in real distress, but we are working urgently to address this problem. I say to the self-employed, we have not forgotten you. Help is coming. But the policy and [its] delivery is complex, and we cannot and should not rush to announce a scheme that begs more questions than it answers,” Chief Secretary to the Treasury Stephen Barclay told members of Parliament on March 24. The government is looking at the issue “in immense detail and at pace,” Chancellor of the Exchequer Rishi Sunak told MPs earlier.
Barclay was responding to an urgent question presented in the House of Commons by Edward Davey, acting leader of the Liberal Democrats, on financial support for self-employed people dealing with the economic impact of the crisis. Prime Minister Boris Johnson had announced on March 23 that people in Britain must now stay at home, that they will be allowed to leave for only “very limited purposes,” and that shops selling nonessential goods will be closed.
Barclay told MPs that the government’s initial response to the economic crisis “puts a shoulder behind business” with a statutory sick pay relief package for small and medium-size enterprises, business rates holidays for all retail, hospitality, leisure, and nursery businesses in England, and grant funding for small enterprises. Support is also available through the Time to Pay scheme operated by HM Revenue & Customs, he added.
Sunak had told MPs during Treasury questions that the government remains committed to doing what it can to support businesses, people, and public services. “In the last week, I have announced unprecedented measures to support business, including over £300 billion of government-backed loans, £20 billion of tax cuts and grants, a VAT deferral worth 1.5 percent of GDP, and a landmark job retention scheme guaranteeing 80 percent of the wages of furloughed workers. We believe that these measures represent the most comprehensive and generous suite of interventions of any major developed country in the world,” Sunak said.
Asked when the government would come forward with additional support for the self-employed and freelancers, Sunak said he would be making further announcements about progress. “It is something that we have been looking at in intense detail over the past week in the Treasury. What I can say is that we are in dialogue with all the key stakeholder groups, including calls that I am having today with several of those bodies. There are genuine practical and principled reasons why it is incredibly complicated to design a scheme that is analogous to the one that we have for employed workers, but . . . we absolutely understand the situation that many self-employed people face at the moment and we are determined to find a way to support them. We need to be confident that that can be done in a way that is deliverable and fair to the vast majority of the British workforce,” he added.
Responding for the opposition, Labour’s Shadow Chancellor John McDonnell stressed that “there is a sense of urgency” about the self-employed and suggested that there was not a single MP who had not been contacted by a constituent “in quite a distressed state.”
Support needs to be extended rapidly to the self-employed, Labour MP Rachel Reeves, chair of the Business Committee, said in a letter to Business Secretary Alok Sharma. Reeves welcomed the government’s package to support businesses and employees, announced on March 20, but warned of a worrying gap in the government’s strategy, with self-employed and freelancers “still not covered by support even as many of their businesses are now subject to lockdown.”
Most of the 14,000 responses to the Treasury Committee’s call for evidence on the government’s financial response to COVID-19 related to self-employment issues, said committee chair Mel Stride. “This is clearly an area where further action is needed by the government,” he said in a statement.
The removal of the minimum income floor for universal credit claimed by the self-employed would not be enough, the Scottish government said. It called for a relaxation of means-testing rules to “ensure that the self-employed, whether with savings or other household income, are not denied support,” according to a March 24 release.
The Federation of Small Businesses has heard from “thousands of self-employed people — including hairdressers, bakers, childcare providers, taxi drivers, and café owners — many frightened and in despair at seeing their business fall away, and staring at the prospect of little or no financial support,” National Chair Mike Cherry said in a March 22 release.
Guidance on Business Closures and Financial Support
The government updated on March 24 its guidance for employees, employers, and businesses on the response to COVID-19.
Guidance on the closure of all retail businesses selling nonessential goods, and other “nonessential premises,” was published March 23.
Detailed information on the government’s response, and guidance relating to health, education, and travel, is provided at gov.uk/coronavirus.