Advertisement

Millions face ruin if lifeline halted for self-employed

Sunak - JOHN SIBLEY/REUTERS
Sunak - JOHN SIBLEY/REUTERS

More than 100 MPs have demanded that a lifeline self-employment support scheme is extended amid fears millions of workers face ruin if it ends on Monday.

Politicians from all major parties – including four Conservatives – called on Chancellor Rishi Sunak to extend the programme until lockdown measures are relaxed further.

The scheme is paying 2.3 million self-employed workers up to £2,500 a month. If this support is cut, huge numbers could find they are unable to keep up with bills because they have effectively been banned from doing business by state decree.

It came as the manufacturing industry warned of a wave of redundancies ahead, and surveys indicated companies reopening after the lockdown will only bring back a minority of furloughed staff at first.

In a letter organised by Labour MP Siobhain McDonagh, the MPs said: “Whilst some of our self-employed constituents may be able to return to work over the coming weeks and months, it remains likely that many will not.

"If the scheme does not continue, they will be left without work and without support. We are calling on you to ensure that this scheme is continued and to provide details of an extension as soon as possible.”

Tory MPs Sir Peter Bottomley, Julian Lewis, Sir Robert Neill and Andrew Rosindell are among the 113 signatories demanding action.

UK total virus support cost May 27
UK total virus support cost May 27

A separate furlough programme for employees has been extended to October, but the Self-Employment Income Support Scheme has so far only offered one payout to cover the first three months of the lockdown, giving up to £7,500 to those covered by the scheme.

So far it has paid out £6.8bn to 2.3 million workers. Mr Sunak has resisted an extension as the costs of fighting coronarvirus spiral and because some of self-employed workers will be continuing to earn, although he is understood to still be considering his options.

Treasury insiders argue that while the furlough scheme is designed to keep workers in contact with their employers, those who work for themselves have no such need.

Mr Sunak is expected to give more details on the furlough programme within days. It will become flexible from August, with workers allowed to come back part-time but employers expected to chip in to help cover costs.

It came as manufacturing leaders warned that a quarter of businesses in the sector plan to make redundancies in the next six months, with fewer than a third able to definitively rule out job losses.

Of those planning to let staff go, a quarter of companies expect to lose as many as half their workers, industry group Make UK said. Almost four companies in every 10 expect it to take at least a year for trading conditions to return to normal.

Business Briefing Newsletter REFERRAL (Article)
Business Briefing Newsletter REFERRAL (Article)

Stephen Phipson, Make UK chief executive, said: “There is no disguising the fact these figures make for awful reading with the impact on jobs and livelihoods across the UK.

"Industry and government must now leave no stone unturned to retain as many key skills as possible within the sector to ensure it is in a position to effectively recover when growth eventually returns, which at some point it will."

He called on ministers to set up a so-called national skills task force to retrain and redeploy talented workers who find themselves out of a job, so they can update their skills and move into high-demand areas.

Mr Phipson praised the furlough scheme and urged the Chancellor to give full details to businesses so they can plan for the months ahead.

It came as the Office for National Statistics found companies planning to reopen in the next fortnight may only bring back one-third of their staff from furlough to begin with.

Added to the roughly 20pc of the workforce who stayed on as a skeleton crew throughout the period at shuttered businesses, it means around half of their staff will have to wait longer to find out if they will be returning to work.