Businesses welcome furlough extension but urge Treasury to help self-employed

Business leaders and unions have welcomed the Chancellor’s extension of the furlough scheme but concerns have been raised over self-employed workers who will miss out on improved measures for freelancers.

The Treasury Select Committee has been calling on the Government to provide extra support for more than a million self-employed workers who pay themselves in dividends.

Mel Stride, chairman of the committee, told BBC Radio 5 Live: “I remain very concerned that this large group of people have not had the support that I and the committee believe that they should have received and should be receiving going forward, so it’s very unsatisfactory.”

Federation of Small Businesses national chairman Mike Cherry welcomed the extension, calling it “bold and much-needed” to provide confidence to firms.

He added: “It’s encouraging to see the extension of generous support to around two million self-employed people – who don’t enjoy many of the benefits afforded to employees, and are the employers of the future – outlined today.”

The Treasury revealed it had extended the Self-Employment Income Support Scheme to cover 80% of average trading profits until January.

Previous grants for self-employed workers had been set at 40% but an increase to 80% for November was announced on Monday, and is now extended to January.

The cost to the taxpayer is an estimated £7.3 billion with further grants to be announced for February to April, the Treasury added.

Mr Cherry said: “Too many new business owners, sole traders, company directors and entrepreneurs without business premises are still largely excluded from support measures.

Extending furlough is the right call from the Chancellor. This will give directors much greater confidence about their ability to keep staff on board through the winter

“That urgently needs to change, and local authorities must use discretionary funds to help these groups wherever possible.”

Jonathan Geldart, director general of the Institute of Directors, said the furlough extension provided “consistency and clarity”.

He added: “Extending furlough is the right call from the Chancellor. This will give directors much greater confidence about their ability to keep staff on board through the winter.

“Businesses need the ability to plan ahead, with cashflow being critical through the first quarter of 2021, particularly in light of potential Brexit impacts.

“The increase in self-employment support is also welcome. However, while the Government has extended some measures, it is still failing to fix major gaps in the support.

“Many self-employed, including small company directors, continue to be left out in the cold. Grant funding through local authorities could help address this issue, otherwise those missing out will face a harsh winter.”

He added that insolvency protections need to be extended to protect companies from going bust.

He must offer to help to those self-employed workers who are falling between the cracks. We also need an urgent boost to both sick pay and universal credit. No-one should be plunged into financial hardship if they have to self-isolate or if they lose their job

TUC general secretary Frances O’Grady said the move was a “positive step” but called on the Chancellor to do more to help the self-employed.

She said: “He must offer to help to those self-employed workers who are falling between the cracks.

“We also need an urgent boost to both sick pay and universal credit. No-one should be plunged into financial hardship if they have to self-isolate or if they lose their job.”

Stephen Phipson, chief executive of Make UK, said it “marks a welcome and significant step forward”.

He added: “It has now become rapidly clear that this crisis has many months to run, with significant damage to demand in some sectors, the impact of which will be felt well into next year and beyond.

“As a result, there is now an urgent need to broaden out the policy horizon to move from short-term firefighting and salary support towards a longer-term strategic plan for business.

“This must include sector-specific support to those industries who have been hit by a temporary collapse in demand to retain their key skills and ensure they remain internationally competitive.”