We are living in unprecedented times, and today the Chancellor Rishi Sunak announced the government are taking measures that would have been unthinkable just a few weeks ago.
To support workers who are unable to work during the coronavirus (COVID-19) pandemic, the government will step in and help to pay up to 80% of their wages. Mr Sunak said there is no limit to the scheme, which effectively means the government will be paying the wages for the UK workforce for at least three months:
3/ The scheme, open to any employer in the country, will cover the cost of wages backdated to March 1st and will be open before the end of April for at least 3 months.— rishisunak (@RishiSunak) March 20, 2020
There's no limit on the funding available for the scheme, we will pay to support as many jobs as needed.
Other measures announced by the Chancellor today include an extension to the interest-free Coronavirus Business Interruption Loan Scheme from six to 12 months, and is now available to apply for on Monday (23 March)
Also, to help businesses keep people in work, Mr Sunak confirmed the government will defer the next quarter of VAT payments. This means no business will be required to pay VAT from now until mid-June, and will have until the end of the financial year to catch-up on their VAT bills.
What’s new for freelance and self-employed workers?
While today’s announcement was huge for businesses and their employees, there wasn’t much to celebrate for the estimated 5 million self-employed workers in the UK.
Many freelancers, contractors and self-employed workers have reported losing work and income since the outbreak of coronavirus, leaving some unable to pay bills and others having to choose between self-isolation and working to feed their families.
The Chancellor addressed the issues faced by the nation’s freelancers in today’s announcement by providing full access to the Universal Credit system. This effectively means the self-employed will be able to claim the £94.25 per week of Statutory Sick Pay (SSP) they were previously ineligible for.
Mr Sunak said:
7/ I’m also strengthening the safety net for self-employed people by suspending the minimum income floor.— rishisunak (@RishiSunak) March 20, 2020
That means self-employed people can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
However, the news was not welcomed by freelance workers and groups, with many claiming the measure did not go far enough to cover their lost earnings.
Bectu, a union that represents creative freelance workers, said:
“The Chancellor’s support package for workers will come as a devastating blow to freelance and self-employed workers who needed much more support than they are being given.
“These workers are looking to the Chancellor in desperation for a vital lifeline and he has badly let them down, despite his grand promise to do ‘whatever it takes’.
“It is clear the Chancellor simply doesn’t understand the hardship these workers are in – telling them to simply claim universal credit while other workers have their incomes protected is cruel and unfair.”
Representatives of IPSE (The Association of Independent Professionals & the Self-Employed), echoed these sentiments, calling attention to the plight now facing self-employed workers:
While employees get 80% of their incomes covered up to £2,500, the 15% of the workforce who are #selfemployed and #freelance have to resort to the welfare system at £95/week. This will not cover the implosion of people's incomes. Sign our petition: https://t.co/Ya1aYQrDd8 https://t.co/yl8kM7e7W6— Ally Hutchison (@allyhutchison) March 20, 2020
Good point from Richard Murphy here, effectively nothing for the SE, a £1000 on top of UC, although of course an uplift, is that really good enough? https://t.co/yh7YIk8qQu— Ryan Barnett (@RBarnett2018) March 20, 2020
The Creative Industries Foundation, which represents the UK’s creative industries, said:
“The Chancellor’s announcement tonight that the government will pay wages up to 80% for businesses will be very much welcomed by the UK’s creative businesses, many of whom have had to shut their doors overnight. However, this creates a worrying inequity between those who now have their income secured and the UK’s 5 million self-employed workers and freelancers who are left despondent.
“A third of the creative workforce is freelance. Our snap poll on Twitter this week showed that over 50 per cent of these freelancers have already had 100 per cent of their work cancelled due to Covid-19. The £94.25 per week offered in Universal Credit does not come anywhere near to compensating them for their income loss, nor is it close to the amount they can reasonably be expected to live off.
“We stand by all of the creative industries and, at this challenging time, it’s vital the government stands by our self-employed and freelancers, and mirrors the strong measures put in place for the UK’s employed workforce.”
Income protection insurance for the self-employed
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