The Government has been urged to provide more financial support to millions of self-employed Britons whose incomes have been hit due to coronavirus.
Some MPs have warned that Chancellor Rishi Sunak’s plan to pay up to 80 per cent of workers’ who faced being laid off does nothing to help freelancers, contractors and the self-employed.
Former Brexit Secretary David Davis said the economy could face a “fatal seizure” if they were not protected.
But Treasury chief Secretary Stephen Barclay said ministers were focusing on measures which could be rolled out quickly in order to keep the economy going.
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.
Shadow Environment Secretary Luke Pollard urged the government to increase statutory sick pay and give more support for the five million self-employed in the UK.
He told ITV News: "There needs to be support in particular for the five million people who are self-employed in our country. So lots of progress made, but much more to be done."
Trade unions and employers’ organisations broadly welcomed Mr Sunak announcement on Friday that the State would pay up to 80 per cent of the wages of employees, up to £2,500 a month, if firms agreed to keep them on.
However, Mr Davis said it was vital that the Chancellor found a way of extending that support to the self-employed.
Mr Davis 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.”
Chancellor Rishi Sunak lays out Government's package to help businesses closed by coronavirus
Mr Davis’ call was back by TUC general secretary Frances O’Grady, who said the trade union movement would be “pushing really hard” on the issue.
Labour shadow chancellor John McDonnell said: “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.”
Mr Barclay admitted it would be “operationally difficult” to provide support to the self-employed.
He said they 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”.
Mr Barclay said: “The main thing we have done is twofold: it is to support the economy as a whole because the best thing for people who are self-employed, as for all people, is to sustain the economy and ensure that we can return with those viable businesses, and alongside that strengthen the safety net.
“So we have increased the allowance on Universal Credit, we have made it available from day one, we have removed the minimum income floor so if people who are self-employed are working less than 35 hours in a week they are not penalised within the benefits system.”
The Institute for Fiscal Studies think tank predicted that the Chancellor would come forward with additional measures to help the self-employed.
Paul Johnson, director of the IFS, said: “This clearly is a gap. He is not able at the moment to replace the normal wages or incomes of the self-employed.
“I am sure that the reason he hasn’t done that is because it is a much more complicated thing to achieve. I think it is right that he doesn’t try to do that too quickly."
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