UK Markets closed

Government under pressure to support millions of struggling self-employed workers

Tom McArthur
Page editor
Britain's Chancellor Rishi Sunak, (L) and British Prime Minister Boris Johnson give a press conference about the ongoing situation with the coronavirus (COVID-19) outbreak. (Photo by Matt Dunham/Getty Images)

The government is coming under increasing pressure to provide a financial lifeline to the six million self-employed people in Britain whose incomes have vanished because of the coronavirus pandemic.

MPs have warned that chancellor Rishi Sunak’s bold plan to underwrite 80% of the wages of workers who face being laid off as economic activity dries up does nothing for the millions of freelance, contractors and self-employed in the UK workforce.

Ex-Tory cabinet minister David Davis warned the economy could face a “near fatal seizure” if they weren’t protected.

But, Treasury chief secretary Stephen Barclay said ministers were concentrating on measures which could be rolled out quickly to keep the economy going.

Read more: EasyJet pays founder £60m while asking for UK state aid 

Experts warned that assessing the incomes of self-employed people who are outside the PAYE system would be difficult and would take time to work out.

Trade unions broadly welcomed Sunak’s announcement on Friday that the state would pay up to 80% of the wages of employees, up to £2,500 a month, if companies agreed to keep them on the books.

Mr Davis said it was vital that the Chancellor found a way of extending that support to the self-employed.

"It is absolutely necessary. Without this the whole of the British economy will have a seizure - almost a fatal seizure in economic terms," he told the BBC.

"It is great for those who have got jobs but it does miss out a pretty important sector of the economy - namely the self-employed - and he (Mr Sunak) is going to have to find a way of replicating this for the self-employed as well."

Read more: UK hospitality leaders fear coronavirus has already cost 500,000 jobs

His call was backed by TUC general secretary Frances O'Grady who said the trade union movement would be "pushing really hard" on the issue.

"We have got members in industries from construction to the creative industries and this will cause real hardship unless we get to grips with it," she told the BBC Radio 4 Today programme on Saturday.

Mr Barclay said the issue for the Government was about "operationally what is difficult to do and what can be delivered to the timescales were are working to".

He said the self-employed were being helped through measures such as the deferral of self-assessment tax requirements, payment holidays for mortgage payers and the strengthening of the welfare "safety net".

“We are looking at operationally what we can roll out to people," he told the Today programme.

For Labour, shadow chancellor John McDonnell said: "It's dawning on people that there are huge gaping holes in the Chancellor's statement.

"We must urge him to shift once more to protect the wages of the self-employed by including them in the jobs retention scheme and to raise the level of sick pay to the real living wage."