Prospect union calls for emergency help for excluded self-employed

Proposals to government include letting freelancers and sole traders submitting tax returns for 2019-20 be eligible for self-employed income support

The Prospect union, recognising the plight of the 3m self-employed excluded from government Covid support, has devised an emergency plan.

Its Self-Employment Stabilisation Scheme (SESS) would bolt onto the existing Self Employment Income Support Scheme (SEISS) and offer help for the millions of Britons who have fallen through the cracks in government support, through no fault of their own.

Reasons for exclusion include being a company director or not having three years’ worth of accounts to submit to HMRC.

>See also: Liverpool launches £9.5m grant fund for ‘excluded’ self-employed

Prospect general secretary Mike Clancy called the Treasury’s treatment of the 3m excluded self-employed “disgraceful”, given how the government has encouraged self-employment and entrepreneurialism in the past.

The SESS would close existing gaps in the SEISS scheme and would introduce sectoral funds in areas with large freelance workforces, such as the creative industries.

In particular, the SESS proposes:

  • Allowing those who submit tax returns in January 2021 to access the fourth round of SEISS
    A Freelancers Fund to support employers in sectors with large freelance workforces (such as creative industries) to take on freelance workers
  • Allow those who earn less than half their income through self-employment or earn more than £50,000 per annum to qualify for SEISS
  • Introduce a Directors Income Support Scheme as advocated by the Federation of Small Businesses
    Permanently suspend the Minimum Income Floor in Universal Credit, pending a review
  • Maintain the 80 per cent SEISS rate for the fourth round of the SEISS.
  • Implement a Kickstarter loans scheme to support those wishing to restart their business during to the pandemic. It would be repayable once the business becomes profitable and does not affect the recipient’s entitlement to social security

Otherwise, warns Prospect, Britain faces a “stampede” away from self-employment just at a time when those made redundant should be encouraged to go into business for themselves.

“With the vaccine offering hope of a return to normality quickly, the cost of a few months of extra support must be weighed against the likely damage caused if no action is taken,” said the report.

>See also: City mayors warn of mental health pandemic among self-employed

As part of its research for a report on the future of self-employment due to be published in February 2021, Prospect found that nearly two thirds of the self-employed doubted they wanted to work for themselves in the future.

Other findings included that over half of self-employed workers had lost anything between 60 per cent and 100 per cent of their income this year.

Nearly three quarters (73 per cent) had been unable to access Universal Credit, while 88 per cent did not believe government Covid financial support had been commensurate with how much tax they had paid.

Mike Clancy, general secretary of Prospect, said: “The news that barely a third of all self-employed and freelance workers are confident they want to continue to work in this way should be a massive wake-up call to the government.

‘The way they have been treated in this pandemic is disgraceful’

“These workers have powered our economy in recent years and this flexible workforce were lauded by ministers as key to our prosperity. But the way they have been treated in this pandemic is disgraceful and will have consequences for our ability to recover in 2021 in beyond.

“In the long term we need fundamental changes in how these workers are treated. For now, the government has to listen immediately to this Inquiry and introduce a scheme to halt the stampede away from self-employment that that their policies are causing.”

Further reading

Checklist for going self-employed – a Small Business guide

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Tim Adler

Tim Adler is group editor of Small Business, Growth Business and Information Age. He is a former commissioning editor at the Daily Telegraph, who has written for the Financial Times, The Times and the...