UK’s self-employed facing anxious wait for chancellor’s lifeline (Financial Times)
MPs conducting inquiries into the government’s response to the coronavirus outbreak have heard from thousands of self-employed people — including childminders, hairdressers and taxi drivers. Many are angry that the government is supporting employees, while giving them recourse to no more than the £94 a week available through universal credit.
Under growing pressure from opposition MPs, Rishi Sunak, chancellor, on Tuesday said he aimed to do more for the self-employed but that it was “incredibly complicated” to design a scheme that would be “deliverable and fair”.
The Treasury’s argument is that the government has taken steps that will help the most vulnerable, by scrapping the minimum income threshold that limits benefits payments to self-employed people with very low incomes. It has also pushed back the deadline for self-employed people to file self-assessment tax returns from July until the end of January next year.
But these modest steps will be of little consolation to the millions of self-employed people higher up the earnings scale facing sharp, instant drops in their income.
The main demand from unions and freelancers’ associations is for the government to extend its job-retention scheme — which is still being worked out by officials — to include the self-employed.
This could be technically difficult. But the government’s main concern will be that it is very hard to ascertain how much self-employed people have been earning, and whether they were genuinely unable to keep working.
Many self-employed people have fluctuating earnings and do not stay in business for long, making it difficult to use an average of past years’ tax returns.
Whatever form of support the government decides on, it cannot come soon enough for those self-employed people eyeing the next few months anxiously.
UK under pressure to offer urgent aid to 5 million self-employed (The Guardian)
Pressure is mounting on the government to provide urgent aid to Britain’s 5 million self-employed workers as the coronavirus outbreak intensifies and the economic costs of the crisis dramatically escalate.
As the shutdown, in effect, of large sectors of the economy threatens to push millions of people into financial hardship, the Trades Union Congress urged ministers to rapidly extend the worker wage subsidy scheme to the self-employed.
The chancellor, Rishi Sunak, outlined plans on Friday to pay employees 80% of their salaries, capped at £2,500 a month. However, the self-employed can so far only access £94.25 a week in universal credit benefits and defer their self-assessed tax payments until next year.
The TUC, which helped develop the wage subsidy plan alongside business groups and the Treasury, said the government could match the guarantee to help the self-employed, using incomes based on their last three years of self-assessment tax returns. It said payments of at least 80% of incomes could be made directly as a tax rebate.
Treasury officials are understood to be putting together a fresh financial support package for the self-employed after working over the weekend, although they believe it is more important to get the proposed scheme right than rush it out.
Ministers are believed to be grappling with three issues: the technical means of delivering financial help to the self-employed; how the level of support should be calculated; and the need to make sure there is equal treatment for the employed and self-employed.
Government sources also said critics were underestimating the impact of the £7bn package of extra welfare spending – including higher universal credit and more generous housing benefit – announced alongside the wage subsidies.
Earlier on Monday a former governor of the Bank of England, Mervyn King, called on ministers to support self-employed people, while warning that the coronavirus crisis posed a more serious threat to the economy than the 2008 financial crash.
Coronavirus: Why is it taking so long to help the self-employed? (BBC News)
There are five million self-employed people in the UK, generating about £300bn for the economy. But while the government moved last week to subsidise the wages of direct employees, there is still no support package in place for this significant part of the workforce.
It’s important to note that government officials and civil servants are working round the clock to try and fix this under extremely trying circumstances. Our first thoughts are rightly with the heroic efforts of frontline services like the NHS. But in economic terms, these people also deserve our respect and thanks for trying to tackle a crisis not seen in our lifetime.
How to best help the self-employed is a very difficult issue to address for many reasons.
First, it is not straightforward to identify who is and who isn’t self-employed. Of the five million defined as self-employed at any one time, roughly one million were self-employed last year but are not now. Another million who weren’t self-employed last year now are.
Second, the wages of the self-employed can be lumpy, irregular and intermittent. Defining their regular pay packet is very hard and therefore difficult to underwrite accurately.
Third, HMRC has the bank details of those that are on the Pay as You Earn (PAYE) tax system. But it does not hold those details for many self-employed people who file their tax returns in arrears.
Fourth, the Treasury claims that some self-employed people may be unaffected by the current situation and in some cases may be doing fine.
How does the government know that it isn’t giving tax payers’ money to people who don’t need it?
Rishi Sunak faces legal action from gig economy workers, (The Guardian)
Pressure is mounting on Rishi Sunak to extend his coronavirus bailout to the UK’s five million self-employed people, with gig workers threatening legal action against the chancellor’s current “discriminatory” policy and a survey suggesting half would keep working if they had symptoms.
On Friday, Sunak said self-employed workers could access £94.25 a week in universal credit, but he gave a far more generous deal to employees of 80% of salaries, capped at £2,500 per month.
He is being lobbied to go further in coming days or risk public health by incentivising self-employed taxi-drivers, couriers and other gig economy workers and zero-hours contractors to keep working while ill.
The Independent Workers Union of Great Britain says the exclusion of the self-employed from Friday’s promise amounts to discrimination and is a risk to public health. On Monday its lawyers, Leigh Day, will send a pre-action letter ahead of issuing proceedings for a high court judicial review. It also argues that the sick pay is too low for many employees.
Freelance groups, from actors and musicians to minicab and delivery drivers, have complained about what they say is unfair treatment.
The RSA’s chief executive is Matthew Taylor, a former Downing Street adviser. Taylor, who advised Theresa May’s government on reforming work in Britain, said the RSA saw “immediate universal income as a war necessity”. After the crisis has passed, a universal basic income could remain in place “as an economically secure path for workers in the 2020s”, it said.
“Universal healthcare and universal economic security go hand-in-hand,” Painter said.
“It is clear from this survey that workers are already putting themselves in harm’s way, feel they are highly vulnerable, and could be suffering mental distress as a result of coronavirus and economic insecurity. This affects those in ‘atypical’ work such as the self-employed, gig and temp workers more.”
Coronavirus: Uber suspends pool service in London (City A.M.)
Uber has suspended its pool service in London to help limit the spread of coronavirus. The ride-sharing app made the call last night (18/03/2020) to suspend the service in London, Paris, the US and Canada.
The pool option allows users to share their Uber ride with other people heading in the same direction, but going to different destinations. The move came after Boris Johnson advised the country to take extreme social distancing measures and to stop socialising in public spaces.
Uber tweeted: “We want to help ensure the safety of everyone in our cities while being available for essential travel needs. Because of this, we are reminding riders, with in-app messages, to travel only when necessary and take steps to protect themselves and their drivers.”
Uber’s senior vice president of rides and platform Andy Macdonald said: “Our goal is to help flatten the curve on community spread in the cities we serve.” Concern has been raised about the welfare of workers in the gig economy and if they will be eligible for sick pay during the coronavirus outbreak.
‘The arts amplify our humanity’: How the creative community pulls together in a time of need (Evening Standard)
The arts and culture industry employs hundreds of thousands of people in the UK, many on a freelance basis, the majority of whom no longer have any work. One singer lost £3,000 of jobs in half an hour last week because of cancelled festivals and there are many more — it’s common for performers to only be paid after shows take place.
Organisations and individual artists are stepping into this breach, filling the gaps in the official channels with money, schemes and kindness. Pianist Stephen Hough received a message from Xi’an Symphony Orchestra in China, where he’s meant to be playing at the end of May, saying: “We’re worried about you. Give us an address so we can send some masks.”
Violinist Tasmin Little is giving online tutorials at a heavily reduced rate, and technicians who have found themselves without shows to work on have offered their building skills to help the NHS create temporary wards. Individuals have been generous.
Writer James Graham has donated the commission for his last television script to the Fund for Freelancers, set up last week by artistic director Paul Taylor-Mills, because, he says: “Long-term solutions need to be found but in the immediate instance the worst affected frankly need cash.”
At the time of writing, the Fund for Freelancers had just passed £46,000.
71% of creative industry freelancers fear not being able to pay their bills (Prolific North)
A survey of freelancers working in the creative industry has found that 71% fear they won’t be able to pay their bills, due to work lost because of coronavirus.
The survey of 5600 people by the union Bectu closed on Monday this week, that’s before social distancing was implemented by the Government and the postponement of filming on a number of high profile television dramas.
46% of respondents said they had already lost money as a result of the virus.
456 reported already losing over £5,000
457 reported losing £2,000-£5,000
591 said they had lost up to £2000
While many said they couldn’t estimate future loss of earnings, due to uncertainty about the length of the disruption, 131 said they could lose over £40k.
437 said they could lose £20,000-40,000 and 783 people said they may lose up to £20,000.
83% of those who took part reported themselves as freelancers working across TV, film, live tours, theatres, art galleries and art studios.