Time for a turnaround for self-employed left out in the cold

by Colin Crooks, CEO, Tree Shepherd

Marcus Rashford’s campaign for Free School Meals has shown us that a U-turn in the Government’s policies and purse strings is possible. It’s just a shame it takes a celebrity to do this.

While we celebrate the Government finally coming to their senses, we know 3 million hard-working small business owners have been left out in the cold by the Government’s complex package of COVID support and are struggling to pay everyday bills. Ordinary, brave people, who took up the challenge of starting a business, to contribute to our economy, alongside part-time work and caring for relatives, are now left stranded with no lifeboat in sight.

On Monday, the Treasury Select committee released a unanimous interim “Gaps in Support” report that laid bare the lack of Covid crisis support. They took evidence from professional bodies and organisations representing start-ups, freelancers and micro business owners who have been pleading for support from the government for weeks.  To date the government has ignored their pleas for fairness and hidden behind the bland argument that “You could do a range of things, if you had more time.”

The litany of inconsistencies and unfair conditions being applied to self-employed claimants is negligent and borders on discrimination. After all,

Why should up to 650,000 people who started a business in 2019/20 be excluded when people who were employed at the end of last year can be furloughed?

Why are 225,000 self-employed people who earn over £50,000 excluded completely when there is no similar limit applied to employee earnings

Why are 710,000 directors of one-man companies precluded from claiming furlough on their dividend payments when many employees can count their regular bonuses in their furlough calculation?

Why do 675,000 self-employed people who earn more from a part-time job get completely excluded when another person can claim furlough for 2 or even 3 jobs – all up to the limit of £2500 per month?

Why are 780,000 people who work flexibly as freelancers in the gig economy, enabling companies to control their costs, not offered any support whatsoever?

And for the 3 million self-employed people who have been able to claim why can’t they exclude their unavoidable fixed costs such as insurance from their profit calculation?

It is simply not good enough for the Treasury to claim a lack of time or sign-post these people to other non-applicable schemes or even worse cite ludicrous data such as “The average income of those who earned more than £50,000 in 18/19 was more than £200,000” which is both patently absurd and an obvious abuse of statistics.

Sensible solutions to every problem the Treasury throws up have been proposed by the Select Committee and they should put the effort into implementing them not dismissing them.

The Government’s bold claim that it would do “whatever it took to protect people and businesses from the effects of the pandemic” does nothing for the millions of good people who have taken risks and worked all hours to build a livelihood.

The Government’s reaction will also deter future entrepreneurs and flexible workers from taking the leap.

On 11 May, the Government published “OUR PLAN TO REBUILD: The UK Government’s COVID-19 recovery strategy”, which stated one of its overarching principles was “Fairness. The Government will, at all times, endeavour to be fair to all people and groups.”

3 million people are now asking – when are you going to honour that commitment? Here’s hoping a Rashford- style curve ball will appear to finally get them playing a fairer game.

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