Budget 2020: Chancellor announces £500m boost for self-employed workers hit by coronavirus

Chancellor Rishi Sunak has announced a £12bn package of emergency support to help the UK cope with an expected onslaught from coronavirus.

The looming economic hit from coronavirus dominated the Budget on Wednesday, with the Office for Budget Responsibility warning it was “quite likely” it would force the UK into recession this year.

As government sources confirmed that as many as one in five workers are expected to have to stay at home as the outbreak takes a grip on the UK, Mr Sunak set out plans to shore up NHS resources and aid companies and workers likely to be worst affected by the crisis.

But he came under fire from unions after extensions to sick pay rights failed to cover all those who may lose out if they are forced to self-isolate.

The TUC warned that millions of workers will be “plunged into poverty and debt” by the coronavirus plans, which make no provision for sick pay for the self-employed, or gig workers.

And his “extraordinary” package of support risked forcing up national debt, with around £7bn of the measures funded by extra borrowing. The escalation of the threat from the outbreak came too late for the OBR to include its impact in its official economic forecasts for the next five years, which will be updated later in 2020.

With coronavirus officially declared a pandemic by the World Health Organisation, the chancellor issued a pledge of open-ended funding for the healthcare response to the disease.

“Whatever extra resources our NHS needs to cope with Covid-19, it will get,” he vowed. “Whether it is research for a vaccine, recruiting thousands of returning staff, or supporting our brilliant doctors and nurses, whether it’s millions of pounds or billions of pounds, whatever it needs, whatever it costs, we stand behind our NHS.”

Mr Sunak announced he was initially setting aside a £5bn emergency response fund for the NHS and other public services.

And he announced £5bn worth of support for smaller businesses threatened with possible collapse because of cashflow problems or absent staff during the outbreak, including a government rebate for the first 14 days of the £94.25-a-week statutory sick pay (SSP).

SSP will be made available to all those required to self-isolate, even if they are not displaying symptoms, without the requirement to obtain a sick note from a doctor.

And millions of self-employed and gig economy workers, who are not entitled to SSP, will be given help through a £500m boost to the benefits system. This will include a temporary halt to the minimum floor in universal credit and quicker payments for employment and support allowance (ESA) claimants.

There will also be a £500m hardship fund for local authorities, Mr Sunak said, as he scrapped the need for claimants to attend job centre appointments in person.

“If people fall ill or can’t work, we must support their finances. We must make sure that our safety net remains strong enough to fall back on,” he told MPs.

But unions said the package, which came as the latest figures published by the European Commission put the UK second from bottom in the league table of member states for levels of support to ill workers, did not go far enough.

TUC general secretary Frances O’Grady said: “Today’s announcements won’t help the nearly 2 million people who miss out on sick pay because they don’t earn enough.

“Telling them to turn to the broken benefits system isn’t good enough. We need decent sick pay for all.”

And Mike Clancy, general secretary of Prospect, said: “The chancellor’s measures for freelancers, removing the income floor and the need to attend a job centre interview, are welcome but using universal credit to deliver this help is simply not up to the scale of the challenge .

“It seems that if you are an employee you get support, if you are a business you get support, but if you are a freelancer you get left behind.”

Tim Roache, GMB general secretary, said there was “nowhere near enough” to help working people forced to self isolate due to coronavirus.

He said: “Statutory sick pay is £18 per day, no one can live on that, and that’s what the government seem to expect the 20 per cent of the population who may have to self-isolate to do. If it’s possible, let’s see ministers do it.

“Coronavirus has highlighted the abysmal state of sick pay in this country. This Budget was an opportunity for the government to right a wrong, but typically they’ve completely ignored it.”

Business groups welcomed measures to shore up companies affected by the crisis, which included:

* Scaling up the Time To Pay service, with 2,000 HMRC staff manning a helpline for businesses wanting to defer tax payments;
* A temporary Coronavirus Business Interruption Loan Scheme, with government guaranteeing bank loans of up to £1.2m to small and medium-sized businesses experiencing a short-term drop in income or increase in costs due to the disease;
* A one-year holiday from business rates worth £1bn for shops, cinemas, restaurants and music venues with a rateable value of less than £51,000, extended for one year to include leisure and hospitality sectors including museums, theatres, B&Bs, nightclubs and gyms; and 
* A one-off £3,000 grant to companies already exempt from rates, expected to deliver £2bn to 700,000 of the smallest companies to cover the extra costs of coronavirus.

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said: “Expanding access to statutory sick pay for those impacted by coronavirus is the right thing to do, and so too is making that access affordable for small businesses.

“By announcing an extension of the retail discount and an SSP rebate for small firms, as FSB called for, the chancellor has shown he’s on their side.”

And CBI director general Carolyn Fairbairn said: “The chancellor’s actions on business rates, emergency funds and loans will help ensure firms can weather the storm, especially smaller firms. Larger firms may also need support as the situation develops.”