Thompson urges UK Government to match international efforts for the self-employed

Thursday March 26th 2020

Midlothian MP, Owen Thompson

Article written by Midlothian MP, Owen Thompson

Coronavirus has created a national emergency of unparalleled proportions and we all have to adapt, look out for each other and work together to find a safe passage through this nightmare.

A huge debt of gratitude is due to all those essential workers who are keeping things running – from the NHS frontline to the local shop staff to the local government teams, rushed off their feet trying to get emergency measures in place across Midlothian. Where people still have to work outside their homes, employers must make sure their safety is protected.

The public health crisis has brought along an economic crisis with thousands of businesses losing trade overnight. How we respond to this will make all the difference for both individual lives and long term recovery, so measures announced by both the Scottish and UK Governments so far have been very welcome.

As I write there remains a looming omission in the support packages that have been announced so far, which urgently needs fixed. We need to make sure we do better by the self-employed. I understand the long-awaited plans are finally being revealed today (Thursday) so I will be watching closely to make sure it’s fit for purpose.

There are over 4.9 million self-employed in the UK, around 330,000 in Scotland. They contribute over £275 billion to the economy in more normal times. Sole traders, freelancers and small businesses are the lifeblood of the economy in Midlothian, so it’s not right that they have been left without a lifeline up until now. They deserve nothing short of parity with other workers.

On March 20th a substantive package of support was announced to protect the salaries of employed people and businesses, which was very much welcome. Yet we have had to wait until we are in emergency lockdown before there’s any sign of movement for the self-employed. This is not good enough when your cashflow has suddenly stopped, you can’t pay the bills or buy your groceries.

In response to questions from myself and many others, the Prime Minister the Chancellor, the Chief Secretary to the Treasury and the Scottish Secretary have all made the promise that “help is coming” but would not say when. Alister Jack was very sympathetic when I urged a more speedy solution, but told me it was ‘a complicated problem’. If it’s so tricky, how come other countries have a mechanism up and running already while the UK dithers?

The UK Government doesn’t need to struggle to invent complex new bureaucratic systems when there are models already out there they could follow.

They could save themselves a headache and extend the Job Retention Scheme for workers to include the self-employed, as the Scottish Government has implored them to do. They did this in Norway and Denmark, why not here? They could look to Germany’s model, with its 50 billion programme to protect the self-employed, or Ireland with its ‘pandemic payment’ of 350 euros a week. They know that it costs a lot more in the long term to leave people in poverty.

Whatever model emerges when finally announced, it has to be put into action quickly. We need government to be swift-of-foot in an emergency such as this. In New Zealand freelancers applying for their loss of income grant on Monday had it in their bank accounts just two days later. That is the kind of efficient government we need.

The Resolution Foundation estimated one in three people in self-employment are at risk of losing their income. This is not the time to mess around with complex systems, leaving people under immense stress in the meantime.

As we are all affected by coronavirus, the government should also consider rolling out a national minimum income to make sure nobody is falling through the safety net. This could relieve a lot of the bureaucratic burdens and potentially save millions more from being left on the breadline.

Adding thousands of self-employed people to the welfare system is not the solution, as we have witnessed over the last couple of weeks. There has been almost half a million applications for Universal Credit processed over the past nine days. The poor staff must be tearing their hair out as the DWP’s systems struggle to cope, meaning even lengthier delays in a benefit not known to be speedy.

Whatever measures we are about to see, I hope it is a fast and fair package offering parity with what was provided for other workers. It must get in people’s pockets quickly and finally give some much needed relief to the self-employed in these challenging times.

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