Struggling self-employed people will have to wait for the Government to come up with a “deliverable and fair” coronavirus support package, Chancellor Rishi Sunak has said.
Boris Johnson’s Government has come under sustained pressure to provide financial help for self-employed workers, who face a dramatic loss of income if forced to take time off for sickness or quarantine.
Sunak told MPs it is “incredibly complicated” to design a system to support the self-employed but insisted that intensive work is going on in Whitehall.
He said ministers are “in dialogue with all the key stakeholder groups”.
“There are genuine practical and principled reasons why it is incredibly complicated to design an analogous scheme to the one that we have for employed workers, but … rest assured that we absolutely understand the situation that many self-employed people face at the moment as a result of what’s happening and are determined to find a way to support them,” he told the Commons.
“We just need to be confident that can be done in a way that is deliverable and is fair to the vast majority of the British workforce.”
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We understand the situation many self-employed people face at the moment and are determined to find a way to support them.
I will be making a further announcement on this in the coming days.
The chancellor has promised help for the self-employed in “the coming days”.
Rishi Sunak, however, repeatedly spelt out difficulties in applying the same terms as his recent bailout for staff.
He refused to commit to a precise date for help, saying there were issues about the fairness of any scheme.
He said ministers are “in dialogue with all the key stakeholder groups”.
Sunak told MPs that to design an analogous scheme to the one that they have for employed workers is incredibly complicated. He assured that the government understand the situation that many self-employed people face at the moment.
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Why support for self-employed is problematic?
The “challenge” the chancellor told MPs was in “designing something that gets to the people who we want to help. While at the same time being affordable and not having to benefit absolutely everybody.
“That is proving to be problematic, but we are hard at work on it.”
Mr Sunak went on to say that a self-employment scheme would require another “brand-new system” to deliver. He suggested that delivery of “the scheme set up for 90% of the workforce who are employed” would be the first priority. And that is what we have committed to do, ideally by the end of April”.
Acknowledging the anxiety of the self-employed he pointed to
- deferring VAT
- interest-free loans
- changes to the tax credit and Universal Credit systems
- Unite union boss Len McCluskey warned that millions of self-employed workers worry
According to Thérèse Coffey ( work and pensions secretary):
She revealed on Wednesday that 477,000 people had applied for the benefit in the past nine days. That is more than during any entire month of the 2008-09 financial crisis.
“We don’t know if they’re self-employed or at different stages, and I want to assure people that help, even if it’s not currently the level of help they would like, is there to help them through the safety net of the welfare state,” she said.
Unite union boss Len McCluskey said:
“The millions of self-employed and insecure workers across the country will dread being sent home because it means that they will have no wage.
“The Government must work with trade unions to define the tougher isolation rules because we understand the reality of the workplace.”
He added: “Without swift clarity for millions of insecure and uncertain workers about whether they can be at work or not, and without removing the agonising choice between health and hardship, then the positive measures announced by the Chancellor last week will be overshadowed and public health efforts will be severely compromised.
“Confused messages and lack of financial support are at odds with the urgency of this health emergency.
“Workers need clear direction and protection from Government now.”
Rachel Reeves is Labour chairwoman of the Commons Business, Energy and Industrial Strategy Committee.
She has written to business secretary Alok Sharma to extend the income protection scheme to cover the self-employed. Also to increase the rate of statutory sick pay.
She said: “The chancellor’s package last week to support businesses and employees was welcome.
“But with self-employed and freelancers still not covered by support. Even as many of their businesses are now subject to lockdown. There is a worrying gap in the Government’s strategy to protect these livelihoods which urgently needs to be put right.”
Mr Sunak said he would “hope to have something to say very shortly” on the issue. However, he acknowledged that implementation will take longer.
The PM’s official spokesman stated it was a “complex issue”. But they understood the need of fixing it should as soon as possible.
“We do appreciate the urgency of the situation. Our officials are working at pace to find a well-targeted support package,” the spokesman said.
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