Rishi Sunak will finally unveil a coronavirus bailout for millions of stricken self-employed workers today – with signs they could get cash payments of up to £1,700 a month.
A week after announcing a massive rescue package for employees, the Chancellor is set to go further to stop those who work for themselves and in the ‘gig’ economy being plunged into poverty by the government’s ‘social distancing’ lockdown.
Boris Johnson said yesterday that the new proposals will offer ‘parity’ with the eye-watering measures already brought forward to protect other parts of the workforce.
There is speculation that around two million workers could benefit, potentially getting 80 per cent of the net income they declared on previous tax returns, up to a limit of £1,700 a month.
Unlike the bailout for employees, which is being channelled through businesses in grants, the government money would go directly to individuals.
The help is also expected to be means-tested, with those earning over £50,000 not covered to avoid the system being exploited.
Chancellor Rishi Sunak (pictured at a Downing Street press conference last week) will finally unveil a coronavirus bailout for millions of stricken self-employed workers today
Boris Johnson said yesterday that the new proposals will offer ‘parity’ with the eye-watering measures already brought forward to protect other parts of the workforce
The government has been facing a furious clamour to bring forward a rescue package for the self-employed, with warnings that it is already too late for many who have been unable to pay their bills after swathes of the economy were forced to shut down to curb coronavirus spread.
It emerged yesterday that almost half a million benefit claims have been received over the past nine days.
Around 477,000 claims have been ‘processed’ since last Tuesday, with 105,000 being made for Universal Credit yesterday.
The unprecedented pressure and volume of new claims has led to delays and people being unable to get through to advisers on the phone.
Mr Johnson said that while the Government was ‘putting our arms around’ every worker, he could not guarantee that the self-employed would not face ‘any kind of hardship at all’.
But the Prime Minister said he wanted to get ‘parity of support’ so the self-employed could have similar levels of protection to workers with jobs.
He told the Commons yesterday: ‘There are particular difficulties with those who are not on PAYE schemes… I think the whole House understands. We are bringing forward a package to ensure that everybody gets the support that they need.’
Asked what this would involve, he said: ‘I cannot, in all candour, promise the House that we will be able to get through this crisis without any kind of hardship at all.’
But he added: ‘We will do whatever we can to support the self-employed, just as we are putting our arms around every single employed person in this country.’
Last week Mr Sunak unveiled a plan that would see the state pay up to 80 per cent of the wages of employees if firms agree to keep them on.
But there are, as yet, no measures for the estimated five million self-employed people, who currently have to rely on welfare payments of around £94 a week.
At a press conference in Downing Street later, Mr Sunak is expected to unveil a ‘huge’ scheme to help subsidise the incomes of self-employed people whose work has evaporated because of the coronavirus.
It will feature a ‘bespoke’ mix of measures but will include an element of direct income subsidy in the form of non-repayable grants.
Sources acknowledge that it ‘won’t be direct parity in terms of maths but it will be parity in terms of fairness’.
This is partly due to the range of workers in the self-employed bracket. While many have lost their income, others have more work.
Many earn low wages in the hospitality and leisure sectors, but corporate lawyers and barristers on six-figure salaries are also self-employed.
Government sources said that in addition they did not want the taxpayer to have to support the incomes of people who have other jobs.
One source said: ‘With the employee scheme, people are either furloughed or they are not. ‘With the self-employed it’s different – work may have dried up right now but that might change, and this [lockdown] could go on for months.’
The sums involved will be ‘huge’ because of the scale of the problem and will run to certainly tens of billions.
Mr Sunak has consulted several organisations representing the self-employed over the measures.
A spokesman for one of them, the association of Independent Professionals and the Self Employed, said: ‘We’re quite optimistic. ‘We’ve been calling for a fund to guarantee the income of most self-employed people who are going to lose out in this crisis.
‘We’re calling for 80 per cent of the wages of the self-employed, the same as employees, to be protected.’ At Prime Minister’s Questions yesterday, MPs from all parties lined up to ask what was being done to help the self-employed.
Labour leader Jeremy Corbyn said: ‘The self-employed are having to choose whether they go to work or stay at home or face losing their entire livelihood, relying instead on an overstretched welfare system which could pay as little as £94 per week.’
Asked yesterday why the package was taking so long to arrive, Mr Johnson said: ‘We have increased universal credit by £1,000 a year.
‘We have deferred income tax self-assessments for the self-employed until July, and are deferring VAT until the next quarter. There is also access to Government-financed loans.
‘But there are particular complexities of the self-employed that do need to be addressed; they are not all in the same position.’
London mayor Sadiq Khan has said the lack of support for the self-employed has contributed to the numbers travelling into the capital for work despite the lockdown.
The Resolution Foundation thinktank has estimated that one in three people in self-employment – 1.7million workers – are at risk of losing their income.