More than a million people will have to fend for themselves after the Chancellor failed to plug holes in his support for the self-employed, a trade body has warned.
Chancellor Rishi Sunak said that the Government will cover 20% of the earnings of self-employed people after the current scheme, which covers 80% of earnings, runs out.
He also promised to defer income tax self-assessment, a measure that will be “of particular importance” to self employed people.
But the help misses out around 1.5 million people who have been given far too little support through the crisis, said Andy Chamberlain, the director of policy at the Association of Independent Professionals and the Self-Employed (IPSE).
Only sole traders who filed tax returns in the financial year ending April 2019 were eligible for the previous Self-Employment Income Support Scheme (Seiss), and the Chancellor did not appear to close these gaps on Thursday.
“The support for the self-employed announced today is woefully inadequate.
“Although it is right for the Chancellor to extend Seiss, the support announced today still excludes one in three self-employed people,” Mr Chamberlain said.
“Limited company freelancers and the newly self-employed almost entirely missed out on support in the last lockdown and have faced bleak months of financial devastation.
“Now they face a dark winter ahead unless the government does more for them.”
He added that the 20% cap on support is likely to prove insufficient for many.
His concerns were echoed by MPs after the Chancellor made his statement in the House of Commons on Thursday.
Mel Stride, a Conservative politician who heads the influential Treasury Select Committee, welcomed the measures, but said many self-employed workers had fallen through the gaps the first time around.
He asked Mr Sunak to say whether the new measures will ameliorate or iron out these problems.
The Chancellor did not answer Mr Stride’s question.
Instead he said: “With regard to the self-employed, I’m glad he welcomes the extension and the existing support grant.
“This is something that virtually no other country in the world has done, and it comes on top of the most generous support to our self employed out of almost any country throughout their response to this crisis.
“Of course I will be happy to meet with him, but I know he will also be pleased to learn that the measures today to defer income tax self assessment will be of particular importance to our self employed small businesses.”
Shadow chancellor Anneliese Dodds said: “Labour has called repeatedly for continued targeted support for the self-employed, so I’m pleased that’s referred to here, but will these measures avoid the gaps in coverage that have bedeviled existing schemes.”