June start of self-employed scheme “too late for millions”, says McDonnell

Labour’s John McDonnell has welcomed the new income support package announced by the Chancellor for self-employed workers today – but said its start date of June will “simply be too late for millions”.

Rishi Sunak used the latest coronavirus press conference this afternoon to announce that the self-employed with trading profits below £50,000 would be eligible for a taxable grant worth 80% of their average monthly profits up to £2,500 a month.

The self-employed who are eligible can claim the grant and continue to do business where possible. The support will be available for at least three months, subject to extension if necessary.

Commenting on the proposals, the Shadow Chancellor said: “We’re relieved that the Chancellor, responding to the advocacy of the Federation of Small Businesses and trade unions and others, has brought forward the protection scheme for the self-employed.

“My worry is that, if people cannot get access to the scheme until June, it will simply be too late for millions. People need support in the coming days and fortnight.

“Asking people to rely on Universal Credit when more than 130,000 people are queuing online will be worrying to many people, so there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.”

Others have raised concerns over the fact that only those who submitted a tax return for 2018/19 will be able to apply for the scheme – excluding anyone who entered self-employment within the last year.

The newly self-employed, those with profits over £50,000 and those who need support earlier than June will have to apply – if they have less than £16,000 in savings – for Universal Credit, which can involve a five-week wait.

The Chancellor hinted that there would be tax reforms affecting self-employed people further down the line, which could mean a change to National Insurance contributions. The rates are not currently equal between self-employed and PAYE workers.

GMB trade union welcomed the Chancellor’s new package of measures, with general secretary Tim Roache saying “millions of self-employed workers will sleep easier tonight”. He added that there was a need to tackle bogus self-employment after the crisis.

TUC’s Frances O’Grady was also positive about the freshly announced support, though commented: “It’s vital that support reaches workers as soon as possible. Many are already dealing with severe hardship.”

Roy Rickhuss of Community, which represents self-employed people across the UK, said: “Waiting until June will be too long for many of the self-employed who already are struggling to make ends meet.

“As a matter of priority, we urge the government to ensure the systems to deliver the self-employed income support scheme are ready and in place as soon as possible to ensure cash gets into the pockets of freelancers and the self-employed urgently.”