Govt’s support for self-employed ‘terribly targeted’, think tank argues

Resolution Foundation has suggested the government’s £12.7bn Self-Employment Income Support Scheme (SEISS) has been “terribly targeted” at those in need.

A report from the think tank has estimated that over 400,000 workers have claimed support despite not losing any income during the crisis, while almost 500,000 people still without work have received no support at all.

The report, which includes a new online survey of 6,000 people aged between 18 and 65 across the UK, noted that at the height of the coronavirus crisis in April, three in 10 self-employed workers (30%) stopped working altogether.

While work has resumed for many, Resolution Foundation’s research indicated that the pace of recovery for the self-employed has been slow, with around one in six (17%) still without work – rising to almost a quarter (24%) of 18 to 34 year olds who were self-employed before the pandemic.

Faced with this huge economic shock, the government “rightly” introduced the £12.7bn SEISS, the think tank said, calculating that up until the end of August, the government has spent more than twice as much supporting each self-employed worker (£2,518) through the SEISS than it has supporting each employee through the Job Retention Scheme (£1,128).

However, the new report has warned that this support has been “terribly targeted”. Of the 42% of self-employed workers surveyed who have claimed the SEISS, the Foundation found that 17%, equivalent to 435,000 workers, did so despite having experienced no loss of income throughout the crisis – at a cost of around £1.3bn.

By contrast, 67% of self-employed workers who hadn’t claimed the SEISS have experienced a loss of income during the pandemic. The Foundation said this group needed support, but that it equated to around 500,000 self-employed workers who were still without any work at all in September, and yet to receive any from the SEISS.

Resolution Foundation economist, Hannah Slaughter, commented: “The UK’s five million self-employed workers have been at the heart of its jobs crisis. A quarter of young self-employed workers are still without work today.

“The government has provided unprecedented support in response. But it has been terribly targeted – with around £1.3bn going to freelancers and businesses unaffected by the crisis, while others suffering catastrophic income losses have missed out on any support at all.

“This crisis is far from over for the UK’s self-employed workers. Future support should avoid excluding so many groups, while ensuring payments reflect genuine falls in income. And an immediate priority should be to strengthen Universal Credit for the many self-employed workers who will really need it in the months ahead.”

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