The IPSE has called for more support for the UK’s self-employed during a second national lockdown announced by Boris Johnson. The lockdown is scheduled to last from Thursday until December 2nd. Just hours before the furlough scheme was due to end, the government announced that it will also be extended until December for those who are eligible. However, the IPSE has urged the government to address the gaps in the SEISS scheme, which leaves many independent professionals with little or no support. Derek Cribb, CEO of IPSE said:
“Crucially, government must also make sure it extends the Self-Employed Income Support Scheme to all self-employed people. The gaps in support in the first lockdown – such as limited company directors and the newly self-employed – led to the biggest drop in self-employed numbers on record. Many thousands lost their freelance businesses and were driven onto Universal Credit.
“Now, those limited company directors and other excluded self-employed who made it through on their savings face financial calamity if they do not get support in this second lockdown. Government must urgently increase the amount paid through SEISS and extend it so that all of the UK’s 4.6 million self-employed are supported.”
The second lockdown was announced on 1st November after government medical advisors warned that mortalities would surpass those in April, overwhelming hospitals within weeks if decisive action wasn’t taken. Pubs, restaurants, gyms and non-essential shops will have to close for four weeks from Thursday, but unlike the restrictions in spring, schools, colleges and universities can stay open.
However, business leaders have said the country cannot afford another lockdown, with over £2 trillion in debt already amassed. The UK’s FTSE 100 ended almost 2.6% lower as the stock market plummeted, with the PM conceding that “The damage to confidence, entrepreneurs, investors, the destruction of jobs, unemployment and the social and welfare costs are immense.”
A number of big businesses, including Lloyds Bank, Shell, Virgin Atlantic and the Premier Inn owner Whitbread have announced plans to cut staff, with 82,000 positions notified as at risk in September. However, this may worsen as firms who were intending to bring people back decide that it is no longer feasible because of the worsening economic climate.
Significant concerns have been raised by MPs over a large number of people who missed out on support. Self-employed people who pay themselves a salary and dividends through their own company are not covered by the CJRS scheme – although they will have some of their salary covered by job retention schemes if they operate through PAYE – or by the SEISS.
Although the furlough scheme has been extended, the government has yet to confirm further details of the SEISS. Given how difficult the last few months have been, there are fears of irreparable damage to the self-employed sector: “We’ve seen half a million people falling out of self-employment in the last six-to-nine months. Normally in a time of economic crisis, you would see more people going into self-employment, but we’re seeing absolutely the opposite,” said Cribb.
There are fears that this second lockdown, compounded by the off-payroll reforms scheduled for April, will see the independent workforce run dry. Economists have predicted that flexible access to temporary skills will be crucial in the UK’s economic recovery from the pandemic, leaving a major gap in the government’s rebuild strategy.
Despite the blow to business, some companies are still hiring, especially in the lead up to Christmas when the demand for temporary staff is high. For the latest news on hiring and vacancies, read our article here. If you’re starting a new contract, ContractingWISE has a range of hassle-free services that can help you set up a fast and efficient payroll. To talk to a member of our team, call: 0203 642 8679