Support for Self-employed and Freelance Workers

Kerry McCarthy Excerpts

Thursday 17th September 2020 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

The hon. Member for Buckingham (Greg Smith) made an excellent speech, and I hope the Minister listens to him in a way that I have not managed to make the Treasury listen to me so far.

I have had constituents from all walks of life reach out to me over the last few months—carpenters, architects, taxi drivers, musicians, accountants—and all with one thing in common, which is that they have been very badly let down by this Government. People who have been self-employed for less than a year, limited company directors, freelancers, the self-employed earning over £50,000 have all had their income slashed and are expected to get by on universal credit.

We cannot stress enough that this was totally unexpected. If someone is self-employed or a freelancer, they expect the ups and downs that accompany that state as they take risks, but nobody expected covid to happen. This was a one-off event, and in such circumstances people look to the Government to step in and provide a safety net.

Like the hon. Member for Edinburgh East (Tommy Sheppard), I have heard from self-employed new mothers who have been financially penalised for raising a child because maternity leave is included in the self-employment calculations as a period when they have not made a profit. I have heard from a director of a limited company whose income supports her, her partner and their four-year-old daughter, but her partner was on maternity leave as lockdown struck with a baby due in four weeks, and they were not getting any support at all.

Another constituent sent me this, which is worth reading in full because it sums up the impact that people are experiencing:

“I went self-employed 9 months ago and haven’t so far submitted a tax return. My work is drying up and I just don’t know how long I will be able to keep my head above water, I’m so worried that I’ve been having panic attacks. My brother is in an even worse situation. He’s a director of a small limited company and pays himself via dividends, with his average earnings a fraction over the £50k cliff-edge threshold. He’s a heating engineer who can only do breakdowns. His partner can’t work as she’s a hairdresser and they have a young family. My brother's income has been slashed to virtually nothing and they have next to no income to pay their bills. They are in such a lot of trouble. If I knew if I could keep working I could help him out. My parents are trying to help but they can’t if this goes on for very long.”

That was in early April.

Five months down the line and despite repeated pleas to the Treasury, there is still no support for people like them. The Chancellor bragged that his March Budget was pro small business, but small limited companies have received neither business nor personal support. Some 20 directors of small limited companies reached out to me and I have tried to lobby on their behalf but, as everyone who has spoken today has said, the Government simply would not listen.

Since lockdown, I have sent 16 letters to the Chancellor about flaws and gaps in the Government’s personal financial support schemes. If we take into account the business in my constituency on whose behalf I emailed to see if they could get loans or business grants, I sent 35 emails to the Treasury. The vast majority of those received a cut-and-paste response from a civil servant in the Treasury’s correspondence unit—not even a Minister—that was essentially a printout of the Government’s frequently asked questions.

As colleagues on both sides of the Chamber have mentioned, people in the creative sector have possibly been dealt the worst hand of all. Many of them, especially musicians, still cannot legally go back to work. I hope the Minister listens to us all today on both sides of the House, does the sensible thing and extends the furlough scheme, as we heard in the previous debate, for those who cannot return to work. However, the Chancellor also needs to listen to what MPs are saying today, finally acknowledge the plight of the excluded and do the right thing by them too.