What about the self-employed in the middle bracket?
As we welcomed in 2020 last New Year’s Eve, we never thought that by March our entire world would consist of home. All our plans would be shattered, and for many, their lives taken from them. Even as we mourn the loss of more than a thousand of our countrymen, and many thousands of our fellow citizens of the world, we fear that many more close and distant will suffer the same fate.
Novelists have imagined this strange and dystopian existence in fantasy fiction. Less than a week into our new reality, some are already struggling to cope. These novelists imagine queues for essential items, arguments and disputes, police enforcing curfews, and great suffering. Some also imagine heroic deeds, like those who have signed up as Volunteers to support their communities. Our freedoms have been drastically curtailed and our lives put on pause, though not, as in a true dystopia, by some totalitarian government, but by a virus.
The reality we face is that we know most people who contract the disease will not be seriously affected by it. But many will be, and although we cannot be sure who they will be, we do know that the NHS has only limited resources to help them. The slogan, “protect the NHS”, is an easy soundbite, but what it actually means is “reduce the demand for intensive care and ventilator beds by not getting ill and not infecting others”. What we now know for sure is that any of us could need one, so the fewer people that are using them, the better. No-one, however fit or healthy can be sure this virus won’t take hold of them.
We are only a week in to the lockdown. Our homes are our kingdoms and our sanctuaries. We watch news bulletins to try to plan. We struggle to buy the necessities we normally take for granted – we even struggle to buy the soap we need to wash our hands as the government instructs us. We are informed by graphs and data which the experts are unable to interpret consistently, and all we truly know is that this situation could go on for a long time. The emotional and psychological strain this places on us is hard for many.
For businesses, some can have staff working from home. Others will be able to use the government Job Retention Scheme. There is help for VAT payments and PAYE payments. There is a lot of help available, but this is far from business as usual. Those shops permitted to stay open are struggling to fill their shelves.
During the last week and a half, government introduced a set of packages to help individuals and businesses survive. This is detailed very thoroughly on the Hillier Hopkins web site. When last I wrote, there was no help for the self-employed, now there is – but the help is very much a blunt instrument, and far from adequate. The table below imagines two couples where all four were self-employed.
|Couple A||Couple B|
|Average income per person||£51,000||£49,000|
|Family income lost in three months||£25,500||£24,500|
|Grant from government||£0||£15,000|
|Loss of income to the family||£25,500||£9,500|
It is bad enough having to “stay at home” though it is of course right that everyone should follow the advice of government, but just as people suffer as individuals, businesses are having to close their doors. And staying at home watching your business die, while getting no compensation is perhaps too hard for many to suffer. Many small business are owned by partnerships or self-employed individuals, and the government grants will help some of them to mothball their businesses, while retaining their employees. But for others the damage may be lasting, as there is every reason to think that people’s tastes and habits will change as things gradually unlock.
For many self-employed people, the grants available will simply not be available. Government’s announcement that it is covering 95% of self-employed people may be true, in that it excludes high-earning partners in professional practices who should be able to weather the storm. But these are probably the top 1% or less, and much more sensitivity is needed for others in the margin between £50,000 and the high-earners. An employee who earns £70,000 per annum and who is furloughed can still receive £2,500 per month. It may not be what they are used to, but it is something. His boss, if furloughed on £170,000 will get the same. But a self-employed person on £51,000 will get nothing.
The system needs tweaking as it is unfair at present. If it sounds like I am whinging in the face of the most extensive welfare packages we have ever seen, I would like to reflect just briefly on a few points. Against a background that I am seeking nothing for myself in this, you will notice that the objective of the lockdown is to effectively ration demand for the limited resources of the NHS. I fully support this, but question why it is that any taxpayer should find themselves going completely without aid when the decisions which led to the NHS having shortages of resource beyond those of most developed countries were not made by them but by successive governments. In the end, the decisions about funding the NHS and funding grants for the self employed are political. If we are only talking about helping a small additional number – say 3% – of self-employed people, it won’t be that expensive either, surely.
There is no doubt that, whatever decisions had been taken in the past about funding the NHS and critical care, we would have this lockdown. But nor is there any doubt that the limit placed on self-employed assistance is far too low. I truly hope that government reviews and changes the policy to cut off aid to the self-employed at income levels of £50,000. Spare us the 95% confidence statistics, as these are real people who are effectively being singled out as being asked to sacrifice their livelihoods with no help at all.