John McDonnell has described the “shifted direction” from the Chancellor – who announced new economic measures to address the coronavirus crisis today – as “not far enough or fast enough”.
Rishi Sunak joined the daily Covid-19 press conference this afternoon, where he unveiled plans including a coronavirus job retention scheme and a suspension of VAT payments for businesses.
The move to protect jobs will mean all employers are eligible for a grant to cover 80% of their staffers’ salaries, up to £2,500 a month, with employers topping up pay if they choose to do so.
The scheme will cover wages backdated to March 1st and there is no limit on the total funding available for the initiative, which the Chancellor vowed to put into action by the end of April.
Sunak also revealed that the Universal Credit standard allowance would be raised by £1,000 a year for the next 12 months, and the Working Tax Credit would be increased by the same amount.
But the key benefit for the self-employed is new access to Universal Credit at the same rate as statutory sick pay, which is currently £94.25 a week and there are no plans for that to change.
Responding to the further economic announcements, McDonnell said: “The Chancellor has shifted direction but unfortunately not far enough or fast enough.
“The government must give people the economic security to stay at home by lifting the level of statutory sick pay, but it appears that the government hasn’t done that today.
“Sick pay is being left at a level that the Health Secretary said he could not live on, yet this is what the self-employed are being asked to get by on.
“The Chancellor’s wage protection plan sets out no obligation for employers to keep staff on, and no commitment to full wages being paid, with the cap on incomes meaning that many people will take a significant pay cut.
“This will also take some weeks to roll out at a time when wages need to be guaranteed more urgently. Other benefits, including for carers, are not being lifted adequately.
“The Chancellor said he would do whatever it takes, but he can and should go further – and we will keep working constructively with government to ensure the best possible response to the coronavirus crisis.”
IPSE, the Association of Independent Professionals and the Self-Employed, has warned that the fresh coronavirus measures leave the self-employed “trailing far behind employees”.
Andy Chamberlain, director of policy at IPSE, said: “The government has done nowhere near enough to support the self-employed.
“In fact, instead of supporting freelancers to help them keep their businesses going, it is pushing the self-employed into the benefits system.
“Worse, in the benefits system, the amount of money available will simply not be enough to cover many freelancers’ costs.”
Labour’s economic plan for the coronavirus, released on Thursday, recommended that sick pay should be increased and urged all benefit sanctions to be suspended. Neither move was announced today.
However, a number of trade unions affiliated to the Labour Party, including Unite and GMB, have welcomed the package unveiled by the Tory Chancellor this afternoon.