New Times,
New Thinking.

  1. Business
  2. Work
4 March 2021updated 28 Jul 2021 7:51am

A year after Covid-19 hit, millions of self-employed workers are still being denied financial support

Rishi Sunak has updated the Self-Employment Income Support Scheme, but it still leaves many workers without the financial help they need.

By Harry Clarke-Ezzidio

In this week’s budget, Rishi Sunak extended the Self-Employment Income Support Scheme (SEISS) to half a million people who had previously been denied support on the basis that they had only recently become self-employed.

But while the move will be welcome news for these workers, it only deals with a small fraction of the 3 million plus self-employed people who have lost their livelihoods during the pandemic and been prevented from accessing financial support since SEISS came into effect last May.

Over the past 10 months, PAYE freelancers, limited company directors, the recently self-employed, and those earning less than 50 per cent of their income from self-employment were among those ineligible for any government support, according to advocacy group Excluded UK. Shockingly, even those who became self-employed in the tax year before the pandemic began have up until now struggled to access government support if they moved from a salaried job into self-employment that year.

This has now belatedly been rectified by the Chancellor. But though the inclusion of new starters and the recently self-employed into the SEISS is a good start, it fails to repair the damage already done to those who have had no income for the past year. The Chancellor made no mention, for example, of backdated payments for the self-employed who have found themselves in a perilous position since the start of the pandemic.

“I and all the other excluded [workers], stopped working in March because that was the right thing to do,” says Andrew Keenan, a communications specialist who became self-employed too recently to receive SEISS originally. “It’s not just that we’ve had a harder year than everyone else, we’ve been fundamentally pushed way back behind everyone else [those on furlough] and not got any support – which is why whatever support the government does put in place… needs to be backdated.”

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Keenan, who says he has been rejected by all possible support schemes – including Universal Credit as he is married and his spouse is ineligible – believes the Chancellor “rolled the dice” with people like him, financially imperilling those who could be key in contributing to a post-coronavirus economic recovery. “People now have a lot of credit card debt, their savings are gone; they can’t buy new equipment, they can’t retrain… that’s cost us huge amounts of cash, all gone.”

[See also: The Budget showed Labour needs a radical alternative to Rishi Sunak’s austerity]

The lack of support given to the recently self-employed and others – whose existence has been known and widely reported on for months – has frustrated campaigners, such as Rachel Flower, founder of Excluded UK. “If a good reason had been given, or if there was sufficient dialogue from Number 10, then I think we’d all be a lot more understanding… but we’ve had what I can only describe as a refusal to engage,” she says, adding that the group has had a number of requests to meet with the Treasury rejected.

“The narrative used by the government is that it’s complex, and the systems need to prevent fraud, but that alone is not a sufficient reason [not to give support],” she says. “Large categories of those excluded are actually on HMRC records and have been taxpayers for years and have been excluded through no fault of their own… there’s absolutely no evidence that this particular group of people are likely to commit fraud.”

For Flower, along with the others who have been excluded, this week’s announcement will do little to heal the scars of a year without support. “People are at rock bottom; they can’t feed their children, they sleep in their cars, they can’t heat their houses,” she says. “Trust has been eroded in a government that’s supposed to look after its people.”

One particular group of self-employed workers seems to have fallen off the Chancellor’s radar yet again: directors of limited companies. Yet to receive support since the pandemic hit a year ago, they have in many cases been forced to decide whether to furlough themselves (which many cannot afford), or cease trading altogether. 

“Because I had savings, they wouldn’t let me access Universal Credit. So I ended up having to use all my savings before I could then apply,” Pablo O’Hana, director of a talent agency, told the New Statesman ahead of the budget. “Those savings were there so that I could hire my first member of staff and expand my business. I lost all of that, in order to get 50 quid a week from the government.”

[Read also: How Rishi Sunak has borrowed from John McDonnell]

Running out of money and having to cease trading, things caught up with O’Hana last November. “Everything came crashing down, and I ended up having to seek counselling because it felt like things were crumbling around me,” O’Hana reflects. “At the beginning of the pandemic, I remember thinking, ‘this is totally unprecedented’, I understood that they had to create a system that caught the majority of people… But as the months went on, I stopped and thought ‘you’re just not even looking at this anymore, you’re now at a point where you could have fixed this but you’re choosing not to’.”

One of the 710,000 company directors who has been denied access to support, O’Hana hopes that the £408m fund to be given to the arts and culture industry will go some way in lessening the “poisonous” impact the pandemic and Brexit has had on the sector he relies upon. 

But he said he “had zero hopes and expectations” that the government would start seriously addressing the issues that those in his position have faced for so long. 

“Every single time they’re asked about it in an interview, they find some way of avoiding it and claiming that they’ve built the fairest, most comprehensive support system during the pandemic – and it’s just not true.”

[Read also: Rishi Sunak and Keir Starmer are asking the same old question: Labour spending or Tory austerity?]

Content from our partners
Homes for all: how can Labour shape the future of UK housing?
The UK’s skills shortfall is undermining growth
<strong>What kind of tax reforms would stimulate growth?</strong>