Crisis-hit freelancers face a bleak winter after being forced to accept a massive cut to state support in new measures announced by Chancellor Rishi Sunak, self-employed groups have said.
Workers will be able to get a grant equal to 20pc of their usual earnings over the next six months as Britain prepares for a bleak winter. But critics said the response is “woefully inadequate” and still treated contractors as second class versus those on company payrolls.
Previous grants for self-employed workers were set at 80pc and 70pc of normal income.
Andrew Chamberlain, of freelancer tradebody IPSE, said Mr Sunak was right to extend support but slammed the Chancellor for failing to plug “yawning gaps” within the Government’s schemes, which exclude directors of limited companies and freelancers who are are on the PAYE scheme of the company they contract for.
He said: “They have now been without income for six months and are in for a dark stretch ahead. Many won’t be able to survive the winter.”
Mr Sunak announced that the self-employed income support scheme, which has already given more than £13bn to three million freelancers, will be extended until the end of the tax year. In addition, those who file their own tax returns will be able to delay paying bills for 12 months.
Mr Sunak also announced a new “jobs support scheme” for workers in struggling industries.
Tory MP Mel Stride, chairman of the Treasury Select Committee, previously said he hoped the gaps in support would be ironed out in the latest round of grants. However, the eligibility criteria for the new regime remains unchanged.
Mike Cherry of the Federation of Small Businesses said the Chancellor’s silence on struggling freelancers was worrying.
Seb Maley, of freelancer consultancy Qdos, said the the country’s economic recovery will suffer because so many workers are excluded. Freelancers are thought to contribute around £300bn to the economy each year.
The pandemic has already taken a toll, with more than a quarter of a million self-employed workers giving up on the “freelancer dream” and returning to employment over the summer.
A Government spokesman said: “Our support for the self-employed has been one of the most generous in the world. And this is continuing, with millions now able to benefit from the extension right through to April next year.
“Those who do not qualify will still be able to access our wide range of other support – including income tax deferrals, business rates relief, grants, and bounce back loans.”