Thursday 28 January 2021 / 10:30 PM Bridget Phillipson / Economy

Labour calls for fourth grant of self-employed support scheme to pay 80% of pre-crisis profits

Labour has called on Chancellor Rishi Sunak to protect self-employed people by setting the fourth grant of the Self-Employed Income Support Scheme (SEISS) at 80% of pre-crisis profits.

Today (Friday) marks the deadline for applications to the third phase of the scheme, but as yet there are no details about how much the fourth grant will be, when applications will open or who will be eligible for it.

Last week it was revealed that there would be no official announcement on the fourth grant until the Budget on March 3 – more than a month into the period it is supposed to cover.

That means the 2.4 million self-employed people currently relying on the SEISS scheme will be left in the dark about future support for weeks during a national lockdown.

It comes as new figures from the Office for National Statistics reveal more British businesses went to the wall in the last quarter of 2020 than at any time over the last four years.

According to the ONS, UK business closures between October and December 2020 were 37% higher than the fourth quarter of 2019, with more than 100,000 business closures.

More people are turning away from self-employment as a result, with a separate ONS survey this week showing a 10% drop in the number of self-employed people last year, a fall of over half a million.

The first and second SEISS grants were paid at 80% and 70% of three months’ worth of average pre-crisis monthly trading profits respectively. The third grant was eventually paid at 80%, but only after weeks of uncertainty for applicants amid government chopping and changing its plans, initially floating proposals to set the grant as low as 20% or 40% of pre-crisis profits.

 

Bridget Phillipson MP, Labour’s Shadow Chief Secretary to the Treasury, said:

“We need Britain’s hardworking entrepreneurs to help secure our economy out of this crisis and get Britain back on the path to recovery.

“They’ve already had to contend with the worst recession and the worst growth of any major economy. Leaving them in the dark about future support risks pushing even more out of business – and that will damage our recovery.

“The Chancellor should reverse this economically illiterate decision and reassure self-employed people that the fourth grant will be paid at 80% of pre-crisis profits.”