Chancellor Rishi Sunak is expected to announce that the taxpayer will pay self-employed workers up to 80% of their recent earnings to contain the economic impact of the corona virus as 470,000 additional benefits trigger warnings of an “unemployment crisis”.
Sunak was under increasing pressure to do more for the 5 million self-employed in the UK after an unprecedented employee retention program last Friday that paid thousands to stay at home.
According to her family, Covid-19 claimed the life of a 21-year-old woman from Buckinghamshire and the 37-year-old British Ambassador to Hungary. The number of confirmed cases in the UK was just over 8,000 on Wednesday evening.
The Prime Minister promised on Wednesday that the government was preparing to “hug every worker.” He said the self-employed are offered “parity” with workers – although Whitehall sources indicated that the two systems are not identical.
Details of the support package were still finalized last night, but sources with knowledge of the plan indicated that it would reflect the promise to cover 80% of the recent earnings Sunak generated to employees last week.
However, there could be a lower limit than the £ 2,500 monthly pre-tax income available in this system – as the self-employed tend to pay less tax. Some groups, including those who are already claiming universal credit, could be excluded.
At the daily press conference on Downing Street, the prime minister said: “I really don’t think there has been a time in our history in the past century when the government of this country has put its arms around so many people. Take us through a very hard time bad time. We will do it and we will do it together. “
Sunak has significantly increased the generosity of universal loans as part of last week’s package and made it available to more self-employed people.
A sharp rise in universal credit claims has underscored the heavy economic burden that the corona virus is already putting on the UK workforce.
Labor and Pensions Secretary Thérèse Coffey announced on Wednesday that 477,000 people had applied for the benefit in the past nine days. That is more than in every full month of the 2008/09 financial crisis.
“We don’t know if they are self-employed or in different phases, and I want to assure that people who help, even if it is not currently the level of help they want, are there to help them through the safety net from helping the welfare state, ”she said.
Karl Handscomb, chief economist at the Resolution Foundation, said: “The unprecedented surge in new universal credit claims shows that Britain is already in the midst of an unemployment crisis. The increase in entitlements puts enormous pressure on our social security system and is due to a huge impact on family income.
“The government rightly increased the generosity of the benefit system last week. Now it is necessary to ensure that the resources are available so that applications can be processed quickly and the employees receive support as quickly as possible. “
The Ministry of Labor and Pensions (DWP) is recruiting 10,000 people to cope with the extraordinary increase in new applications. The focus will be on the ministry in the coming weeks.
Permanent Secretary Peter Schofield said: “We have decided that managing claims and payments is a top priority for DWP. Operationally, we can prioritize other things. “
The department has so far hired 1,500 new employees to support the sharp rise in universal credit claims, and are expected to increase this to 3,900 by the end of the week.
Shadow Chancellor John McDonnell, who will return to the back benches in ten days when a new Labor leader takes office, in one of his recent speeches, asked the front bank to provide details about the self-help system urgent .
“When people make fraudulent claims while at work, they are rightfully prosecuted. But at the moment, millions of taxi drivers, child minders, plumbers, electricians, painters, decorators and actors have lost their jobs or closed their shops. Just like builders who are self-employed within the construction industry and have no income. You need a solution now, ”he said.
In the meantime, companies continued to demand clarity about who can travel to work, as companies should come to work despite Monday’s Prime Minister’s request that the nation should “stay at home”.
Carolyn Fairbairn, Director General of the CBI, tweeted: “It is clear that many companies do not know whether to remain open or to close.” She said she would meet the business secretary and ask for better guidance.
The warnings come amid the widespread confusion among companies about how to respond to the ban. Halfords, the auto parts, bike, and service group, is reopening some of its stores this week after being classified as an essential service. It had closed its shops on Monday night when Johnson turned to the nation.
Mike Ashley’s Sports Direct retail chain had intended to remain open, but had to withdraw after a public outcry.
Frances O’Grady, director general of the TUC, said the government needed to take action against non-essential companies for employees to take part in the work, and told ministers that if the employers violated the rules, they would have to intervene directly.
“Companies like Sports Direct shouldn’t put their profits before people’s lives. Nobody in non-essential services should be forced to go to work. Nobody should be fired because he follows official instructions and stays at home,” she said.
Off-licenses and other businesses that are licensed to sell alcohol are allowed to remain open after a change in the 11th hour while several companies use the ministers for special treatment.
Greater Manchester Mayor Andy Burnham called for strict enforcement measures against companies that force their employees to travel to non-essential jobs during the ban.
“This is wrong. It threatens the health of workers, their families, and society as a whole. In the absence of clear government orders not to quit essential work, I will provide legal advice whether the Greater Manchester police or other authorities are enforcing companies who can expose their employees in this way. “