Sunak to unveil support package for self-employed
Rishi Sunak: complicated
Chancellor Rishi Sunak will on Thursday announce a package of emergency measures to help prop up Britain’s five million self-employed workers though the coronavirus epidemic.
His package of support is expected to mirror the scheme announced for employed workers, by offering to pay a portion of salary, though he has said it is more complex to execute.
It is thought he may also offer some tax deferment to help the self-employed conserve cash over the next few months.
Ministers have been criticised for not including the self-employed in the recent support initiatives and leaving them at the mercy of the welfare state.
Mr Sunak’s pledge to “do whatever it takes” is now being put to the test, with business lobby groups and individuals mounting pressure on Downing Street to come up with answers.
Taxi drivers, shop owners, tradesmen and childminders are among the army of self-employed workers who now make up a substantial proportion of the workforce.
There are 320,000 in Scotland. Glasgow has more people who work for themselves than any other Scottish local authority. However, rural Scotland has a disproportionately high number of people who are self-employed compared to population.
Andrew McRae, FSB’s Scotland policy chairman, said: “By any measure, the self-employed deserve similar help to the rest of the working population. “
Andrew McRae: self-employed deserve help
The Treasury has argued that it is hugely complicated to design a rescue package that fairly reflects their income – but there has been anger that this group is expected to survive on a universal credit allowance of £94 a week.
Prime Minister Boris Johnson said: “The complexity of their working arrangements has meant it has been harder to come up with the right tailored programme of support.”
Labour leader, Jeremy Corbyn, challenged him in the Commons over why it has taken so long to guarantee their incomes, adding: “There are millions of them, our economy has changed.”
Ian Blackford, the SNP’s Westminster leader, said special support for the self-employed should have been in place before the near total lockdown of Britain was announced on Monday night.
He added that Germany, Denmark, Norway and Ireland had already detailed help for the self-employed.
Replying to Lib Dem MP Alistair Carmichael, who demanded assurances in the Commons that the self-employed were not left worse off than employed people, Mr Johnson said: “I cannot promise this House that we will get through this crisis without any sort of hardship at all.
“We will do whatever we can to support the self-employed just as we are putting our arms around every single employed person in this country.”
The Bank of England holds its regular interest rate-setting meeting on Thursday and is not expected to announce any further cuts to its 0.1% rate. Instead it is expected to commit to a further increase in quantitative easing if needed to help bolster Britain’s economy.
Banks under fire
Banks have been criticised for insisting on personal guarantees to issue government-backed emergency loans to business owners who are then expected to bear most of the risk if the loan goes bad.
It would allow the banks to pursue business owners for their personal property, such as personal savings, shares or holiday home, if their business fails.
Personal guarantees allow banks to lend more because it means they are more likely to get their money back.
Barclays has told customers they will be required to sign personal guarantees to access the government-supported emergency finance. HSBC said it will require a form of personal guarantee for loans over £100,000.
However, Royal Bank of Scotland, which also owns NatWest, has confirmed it will offer business interruption loans without asking business owners for personal guarantees.