Since I last wrote about Government measures to assist the self-employed, Chancellor Rishi Sunak has announced the Self-Employed Income Support Scheme. The key features of the scheme are as follows:
- The self-employed will be eligible for a cash grant worth 80% of their average monthly trading profit over the last three years.
- The grant will be capped at £2,500 per month and will last for at least 3 months.
- The Government has said the scheme covers 95% of people who receive the majority of their income from self-employment.
- The Scheme will be open to those:
- With a tradeable profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 over the last three years; and
- With more than half of their income over these periods from self-employment.
- It will not be available to those “who pay themselves a salary and dividends through their own company” (though they can use the Job Retention Scheme if they are operating PAYE schemes).
- The grant will be paid in a single lump sum covering all three months in June.
This shift in direction from the Chancellor is welcome, but it does not go far enough. I am concerned that June will be too late for millions of self-employed people. Asking them to rely on Universal Credit when more than 130,000 people are queuing online simply isn’t good enough, and there is a real risk that self-employed people will feel they have to keep working, putting their and others’ health at risk.
Constituents have also written to me asking why the cap is set at £50,000, what support is available to the approximately 250,000 people (5% of the self-employed) who will not benefit from this scheme and whether non-UK nationals are covered.
Over the coming days my Labour colleagues and I (in particular our hardworking shadow treasury team) will continue to urgently press the Government on these and other related issues, such as HMRC capacity for processing new Universal Credit claims. We are also asking questions about how many self-employed people pay themselves a salary and dividends through their own company but do not have a PAYE scheme, and so will be covered by neither this scheme nor the Job Retention Scheme.
I have also been raising cases as part of my role in the Shadow Digital, Culture, Media and Sport team. Our Shadow Secretary of State, Tracy Brabin MP, has written a letter to the Chancellor asking him to address some of the issues which are being encountered by those working in the creative arts and related industries. You can read it: https://twitter.com/TracyBrabin/status/1244936589358370817
There are 5 million self-employed people in the UK, which makes up 15% of the workforce. Many of them lost their income overnight. The Government must do all it can to support them through this current crisis, just as it is offering support for employees.