Lockdown: Self-employed support doubles to 80%, Boris Johnson announces

Government support for the self-employed is to be doubled during the coronavirus lockdown, as Boris Johnson acknowledged that the new restrictions this month will cause “anguish” to many businesses.

Payments under the Self-Employment Income Support Scheme (SEISS) are to be raised from 40 to 80 per cent of average pre-Covid trading profits, while business loan schemes are being extended to the end of January and firms are being given the opportunity to top-up bounceback loans, in a package costing £4.5bn between November and January.

The enhanced package was welcomed by industry organisations and unions, who had voiced concern when no support for the self-employed was announced alongside the extension of 80 per cent furlough payments on Saturday.

But there were warnings that millions of self-employed and freelance workers are still missing out on government help, while others will lose out with the planned ending of the suspension to the universal credit minimum income floor on 13 November.

Meanwhile, Boris Johnson indicated that the 80 per cent furlough payments will be made available to Scotland, Wales or Northern Ireland if they are forced to impose their own lockdowns after the end of November.

Saturday’s announcement sparked resentment that a more generous package was available when London and the south of England were facing restrictions on social and economic activity than when northern cities like Liverpool and Manchester went into tier 3, when Wales imposed its 17-day “firebreak” lockdown and when tough measures were introduced in the central belt of Scotland.

Conservative leader in Scotland Douglas Ross warned that it would not be acceptable for “the taps to be turned on” for England, when the same support was deemed “unaffordable” for the other nations of the UK.

And Mr Johnson assured him: "The furlough scheme is a UK-wide scheme.

"If other parts of the UK decide to go into measures which require the furlough scheme then of course it's available to them, that has to be right. And that applies not just now, but, of course, in the future as well."

Scottish first minister Nicola Sturgeon welcomed Mr Johnson’s comments, tweeting: "If this bears out, it is very welcome. 

“However, the Scottish government is seeking urgent confirmation from the Treasury that it will be exactly as we asked for - furlough beyond 2 December, non time-limited and on same basis as available through November, including on eligibility and 80 per cent of  wages paid.”

An extension to the SEISS scheme announced by chancellor Rishi Sunak last month was due to see eligible businesses receive grants worth 40 per cent of trading profits over a three-month period from November to January, up to a maximum of £3,750. This compared with 80 per cent of profits in an initial grant period from March to July and 70 per cent for a second grant covering July to October.

With November’s portion now increased to 80 per cent, the three-month payment is now worth 55 per cent of trading profits up to a maximum of £5,160.

Mr Sunak said: “So far we’ve provided £13.7bn of support to self-employed people through the crisis - and I’ve always said we will continue to do everything we can to support livelihoods across the UK. 

“The rapidly changing health picture has meant we have had to act in order to protect people’s lives and I know this is an incredibly worrying time for the self-employed. That is why we have increased the generosity of the third grant, ensuring those who cannot trade or are facing decreased demand are able to get through the months ahead."

The national chairman of the Federation of Small Businesses, Mike Cherry, said that the “generous” uprating of SEISS would help around 2 million self-employed people.

But he warned: “Many of our self-employed are still not included in the initiative. This is a five-million strong community that drives our economy forward, but the government has insisted that large swathes of it do not warrant any help where income is concerned.”

He said the number of self-employed people giving up their dream of working for themselves as a result of the Covid pandemic could be expected to rise from the current 250,000.

TUC general secretary Frances O’Grady, said: “It has taken the government far too long to set the level of self-employed income support at a fair and decent rate. And even now, the support at 80 per cent will only cover a few weeks of the grant, meaning many people could still face hardship.

“Ministers should not think their work is done. There are lots of self-employed workers who will not qualify for this support. And the suspension of the minimum income floor in universal credit should be extended beyond its current end date of 13 November.”

And the head of the Bectu creative industries union, Philippa Childs, said: “The elephant in the room remains the 2.9 million self-employed and freelance workers still excluded from government support, including thousands in the creative sectors. The government must urgently fix SEISS and give security to these workers who have been ignored by the government since March.”

Caroline Norbury, of the Creative Industries Federation, said the second lockdown would have a “devastating” impact on the sector, with many workers in fashion, advertising, publishing, museums and the performing arts seeing their work “dry up overnight” in the crucial pre-Christmas season.

She said that gaps in support for them must be plugged “as a matter of urgency”, adding: “As we move forward, we will need creative entrepreneurs more than ever. We will need great ideas that drive us out of recession and into the future. We need to move away from this sticking plaster approach of support schemes, and instead think systemically, about how we can grow entrepreneurialism, and ensure parity for all.” 

Roger Barker, director of policy at the Institute of Directors, said: “Better support for the self-employed is of course welcome, but the government is still failing to fill the significant gaps in the scheme. 

"Many small company directors continue to go without support, it’s long past time to sort this problem.”

The Resolution Foundation think tank said that SEISS payments needed to be better targetted.

Research by the group found that around one in six of those receiving support from the scheme in its first months - some 17 per cent, accounting for payments totalling £1.3bn - had experienced no loss of income due to the Covid crisis. But two-thirds of self-employed people who received nothing from SEISS had lost income, including 500,000 people who were still with no work at all by September.

Resolution Foundation economist Hannah Slaughter said: “Self-employed workers have been hit very hard by this crisis, with around one in seven having no work this autumn. The chancellor is right to have extended support today ahead of a second lockdown.

“However, he has missed an opportunity to better target support. Because payments do not reflect the extent of losses faced by the self-employed, many are receiving large payments despite being largely unaffected, while over half a million workers receive no support despite being without work entirely.”