New Labour analysis can reveal the cost of the gaps in the
Government’s coronavirus support schemes, launched a year ago
today (Friday 26 March).
Of the nearly 5 million (4,973,249) people estimated to be
self-employed at the start of the crisis, 944,917– or one in five
– now say that they plan to leave the sector as the crisis
ends.
Labour’s Shadow Chancellor, Anneliese Dodds, has criticised
the Government for “a year of looking the other way” and warns
that the exodus from self-employment risks “damaging the recovery
we so desperately need.”
The loss of self-employed workers will also be felt more
keenly in some sectors and some parts of the country than others.
Process, plant machine operatives, those in elementary
occupations and skilled trades have been worst affected by the
crisis, and these occupations make up a higher proportion of the
self-employed workforce in the North and Midlands (44 per cent)
than the national average (40.5 per cent), and a
much higher proportion than London (31 per
cent).
The Government announced its Self-Employment Income Support
Scheme (SEISS) on 26 March 2020, which pays eligible
self-employed people a proportion of their pre-crisis profits up
to a set limit. However, the scheme has been consistently
criticised for excluding significant numbers of self-employed
people, meaning they have now gone for a whole year without any
Covid-specific support from the government. Nearly 1.5 million
(1,442,242) self-employed people, or 29 per cent of the total,
have fallen through the gaps.
Labour has consistently called on the Government to fix the
holes in this scheme, and while the Chancellor did the bare
minimum by announcing a change in eligibility for the newly
self-employed at the Budget, hundreds of thousands of people
remain excluded from support.
, Labour’s
Shadow Chancellor, said:
“It’s now been a full year that more than a million
self-employed people have had to get by while being excluded from
Covid support schemes. For Government, it’s been a year of
looking the other way.
“That’s not just spectacularly unfair on those who have had
the courage and entrepreneurial spirit to go it on their own. It
also risks damaging the recovery we so desperately need.
“The Government needs to fix the gaps in its support scheme
and help self-employed people to get back on their feet and out
the other side of this crisis.”
ENDS
Notes to editors
·A representative survey of self-employed
workers carried out on behalf of the Resolution Foundation in
January 2021 found 19 per cent were planning to leave
self-employment after the coronavirus crisis. This is in line
with other estimates from the LSE’s Centre for Economic
Performance.
February 2021, Long Covid in the Labour Market,
Resolution Foundation, https://www.resolutionfoundation.org/publications/long-covid-in-the-labour-market/
June 2020, Covid-19 and the self-employed, LSE Centre
for Economic Performance, https://cep.lse.ac.uk/_new/publications/abstract.asp?index=7546
·The survey also found that 29 per cent of
self-employed workers lost income due to the coronavirus crisis
and were ineligible for the SEISS.
·Based on estimates of the number of
self-employed workers prior to the crisis, this means an
estimated 944,917 self-employed workers are planning to leave
self-employment after the crisis and 1,442,242 who lost income
were excluded from the SEISS scheme.
Self-employment by NUTS-1 Region 2019, ONS, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/selfemploymentbynuts1region
·Analysis by The Association of Independent
Professionals and the Self-Employed (IPSE) found self-employed
workers in some occupational groups had been worse affected than
others. Whilst the number in solo self-employment fell overall in
2020 (5 per cent), it was particularly pronounced for
administrative and secretarial occupations (9 per cent), skilled
trades occupations (8 per cent), process, plant and machine
operatives (20 per cent) and elementary occupations (13 per
cent).
IPSE, Self-employed landscape 2020, https://www.ipse.co.uk/policy/research/the-self-employed-landscape/the-self-employed-landscape-report-2020.html
·These occupational categories make up a
disproportionate share of the self-employed workforce in the
North and Midlands. They make up 44 per cent of the self-employed
workforce in the North East and West and 44 per cent in the East
and West midlands on average. This compares to 40.5 per cent in
the UK as a whole, 31 per cent in London and 38 per cent in the
South East.
Annual Population survey October 2019-September 2020,
self-employment by Standard Occupation Classification (2010),
accessed via nomis March 2021, https://www.nomisweb.co.uk/query/construct/summary.asp?mode=construct&version=0&dataset=210
