The chancellor is considering further measures to support the self-employed from the economic hit of the coronavirus outbreak amid increasing calls for action from business groups.
The government has announced an unprecedented package of support for workers and businesses, including underwriting 80 per cent of the wages, up to £2,500 a month, of millions of employees who would otherwise face losing their jobs.
Rishi Sunak has, however, faced criticism that the job retention scheme announced on Friday does not cover the UK’s five million self-employed people, who face unsustainable debts and being pushed towards the benefits system because of the crisis. Critics argue it would be easy to widen the scheme to include them because HMRC has full details of their incomes after expenses through tax returns.
The Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), warned that the equivalent of 12 million people in Britain would feel obliged to work even if they had coronavirus. They include 47 per cent of the self-employed and 51 per cent in “atypical” work, such as zero-hours contracts, according to a poll it commissioned from Populus.
The RSA called for universal income for all from the state as a public health “war necessity” during the coronavirus crisis. The government has announced a number of measures to help the self-employed, including a deferral of self-assessment payments from the end of July to January. The RSA said that self-assessment should become the “mechanism to provide support, helping those genuinely in need of help while filtering out people like landlords who register as self-employed for tax purposes”.
Robert Jenrick, the communities secretary, told The Andrew Marr Show on BBC One that the measures were not “perfect and the chancellor is going to keep reviewing the situation and see if there are further measures we can take”.
He said that extending the job retention scheme to self-employed people was not simple: “The purpose of our employment mechanism is to help continue the connection between employees and their business so once this is over, and it will be over, those individuals can return to their usual work and that link isn’t broken.”
His comments echoed those of Stephen Barclay, chief secretary to the Treasury, who said that a scheme for the self-employed would be “operationally difficult”. The self-employed make up 15 per cent of the UK workforce and represent a sector worth an estimated £305 billion.
Jeremy Corbyn, the Labour leader, told Sophy Ridge on Sunday on Sky News: “Some self-employed people are quite well-off; a lot of self-employed people are not. It’s a very marginal existence.”
More than 2,000 musicians, led by Ed Barker, a former Conservative candidate and saxophone soloist for George Michael, have written to Mr Sunak saying that they were not asking for special treatment but for “fair and equal treatment and for the coronavirus job retention scheme to be extended to the self-employed”.
The British Chambers of Commerce has also called for ministers “to ramp up support for the self-employed, many of whom have seen their livelihoods vanish in the blink of an eye”.
Adam Marshall, its director-general, said that chambers across the country were hearing from thousands of sole traders, “for whom last week’s measures offer little reassurance”.
The Federation of Small Businesses worked with the government over the weekend and has been promised further measures. Craig Beaumont, a federation official, said: “There is hope, so we are asking the self-employed to hang on in there for a little longer.”
The Association of Independent Professionals and the Self-Employed has urged the government to create a temporary income protection fund.
Chris Sanger, head of tax policy at the accountants EY, said that it was a “clear gap in the proposals right now” but it was easier to administer wages to workers via companies, some of which employ thousands of people.