One in five self-employed workers set to leave the sector as COVID crisis ends says Labour Party

Labour’s Shadow Chancellor, Anneliese Dodds, has criticised the Government for “a year of looking the other way” and warns that the exodus from self-employment risks “damaging the recovery we so desperately need”.

New Labour analysis reveals the potential cost of the gaps in the Government’s coronavirus support schemes, launched a year ago today.

Of the nearly 5 million people estimated to be self-employed at the start of the crisis, it is estimated that one in five of those now plan to leave the sector as the crisis ends.

The loss of self-employed workers will also be felt more keenly in some sectors and some parts of the country than others. Process, plant machine operatives, those in elementary occupations and skilled trades have been worst affected by the crisis, and these occupations make up a higher proportion of the self-employed workforce in the North and Midlands (44 per cent) than the national average (40.5 per cent), and a much higher proportion than London (31 per cent).

The Government announced its Self-Employment Income Support Scheme (SEISS) on 26 March 2020, which pays eligible self-employed people a proportion of their pre-crisis profits up to a set limit. However, the scheme has been criticised for excluding significant numbers of self-employed people, meaning they could now have gone a whole year without any COVID-specific support from the Government.

Nearly 1.5 million self-employed people, or 29 per cent of the total, have fallen through the gaps.

Throughout the pandemic the Labour Party has consistently called on the Government to fix the holes in this scheme, and while the Chancellor provided some change by announcing a extra eligibility for the newly self-employed at the Budget, hundreds of thousands of people remain excluded from support.

Anneliese Dodds MP, Labour’s Shadow Chancellor, said: “It’s now been a full year that more than a million self-employed people have had to get by while being excluded from COVID support schemes. For Government, it’s been a year of looking the other way.

“That’s not just spectacularly unfair on those who have had the courage and entrepreneurial spirit to go it on their own. It also risks damaging the recovery we so desperately need.

“The Government needs to fix the gaps in its support scheme and help self-employed people to get back on their feet and out the other side of this crisis.”