Labour’s has warned the Government not to push self-employed workers towards a financial “cliff edge” this autumn by withdrawing income support before many can even return to work. Anneliese Dodds, Labour’s Shadow Chancellor, has called instead on ministers to target support much more effectively so that it actually reaches the self-employed people who need it most.
The warning comes on the day applications for the second and final grant of the Government’s Self-Employment Income Support Scheme (SEISS) open – and a week after new figures revealed a record fall in the number of self-employed workers between April and June.
Applicants who were eligible for the first tranche of SEISS support can apply for a second, smaller three-month grant between today and 17 October, but will receive nothing more after that.
This means that hundreds of thousands of self-employed workers who are relying on SEISS to get them through the next three months will face a financial cliff edge in the autumn.
Government figures show that 2.7 million people submitted claims during the first phase of the scheme, accessing £7.8 billion in support. While some self-employed workers have been able to restart their businesses since lockdown ended, many more have not.
Some, like caterers, beauticians and those who work in live entertainment, are trying to make their businesses work around social distancing guidelines that could still be in place in the autumn.
Others, such as taxi drivers, plumbers and electricians, are unlikely to see demand for their services return to normal if the economy doesn’t recover from the sharpest fall on record.
And with some parts of the country already back under lockdown, many self-employed workers are likely to be struggling long past the October cliff-edge the government is pushing them towards.
That is why Dodds today warns the Government that, just like its one-size-fits-all approach to winding down the furlough scheme, withdrawing support for the self-employed in one fell swoop risks making Boris Johnson’s jobs crisis even worse.
According to the Office of National Statistics’ labour market overview for August, there were 238,000 fewer self-employed people in the last quarter than the one before – a record quarterly fall. Self-employed men have been hit particularly hard, accounting for 99 per cent of the total decrease in self-employment between the first and second quarters of 2020.
This huge drop in self-employment at a time when SEISS grants were available suggests fundamental problems with the way the scheme was designed and targeted.
Labour is calling on the government to abandon its blanket withdrawal of both the furlough and self-employed income support schemes and to work with businesses and trade unions to identify which sectors of the economy are most in need of targeted support.
Anneliese Dodds MP, Labour’s Shadow Chancellor, said:
“This second phase of the Self-Employed Income Support Scheme is too late for the quarter of a million people who left self-employment between April and June.
“The Chancellor now plans to cut off support for every self-employed worker in the country from October – no matter whether they’re back at work or back under local lockdown. Just like his one-size-fits-all wind down of the furlough scheme, he’s pulling the plug at the worst possible time.
“Without flexible, targeted support beyond the autumn, hundreds of thousands more self-employed workers will lose out and Johnson’s jobs crisis will get much worse.
“”Britain’s entrepreneurs and innovators don’t need a permanent helping hand, just targeted support to see them through the crisis and get back on their feet. Instead of pushing them towards a financial cliff edge, the Government should empower them to do what they do best: build great British businesses.”