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Manchester’s self-employed react to Chancellor’s aid package

Self-employed people in Manchester voice their concerns on the aid package announced by Chancellor Rishi Sunak.

The coronavirus pandemic lockdown in the UK has brought economic hardships to many, but the self-employed were ignored in the earlier government aid packages. Over the last 20 years, self-employment has been a growing area of the workforce. In the North-West 13% of the work force are self-employed.

Chancellor Rishi Sunak, revealed an aid package on 26 March to help with the economic stresses of the self-employed who were left without work and with no way to access the other government assistance programs that gave salaried employees an 80% wage subsidy.

self-employed
Growth of self-employment in UK. Source: Office of National Statistics

Sunak announced that self-employed aid will be a grant based on 80% of average monthly profits over the last three years with a maximum of £2,500/month. At least half their income needs to come from self-employment and is open to those earning less than £50,000/year and company owners that pay themselves dividends are not eligible.

Many self-employed were facing escalating problems in paying for housing, food, and utility bills. Many also had expenses that still had to be paid relating to their professions. 

Charlotte Ferguson, a self-employed driving instructor in Manchester with Purple Driving Training, lost her income when social distancing made it impossible to teach, and all driving and theory tests were cancelled by DVSA for three months.

When she inquired about claiming Universal Credit she was only offered £94 a week, which does not cover her car finance  and insurance payments that are necessary for her profession. Regarding the chancellor’s new aid package, Charlotte said:

“Although I’m happy that support is being offered it’s not great for driving instructors, as the entitlement is based on profit and not income. The money I will receive will be far less than I would normally earn.

“My car payments, insurance, road tax and petrol etc are already deducted from my income and are (currently) payments that I’m still expected to make under the scheme…. my outgoings will remain the same.

“In my case, it looks as though what I am entitled to will probably be less than my outgoings for the next three months and I imagine this to be the case for a lot of other driving instructors.”

self-employment
Purple Driving Training cars

Charlotte is worried that there will be no support until June as she has no other form of income. She will try to apply for Universal Credit but realises that this will take time and is going to have to rely on her parents for support. She added, “I’d be lost if I didn’t have them to help support me.  I know many that don’t have the support I do.” 

Louise Bolotin is a freelance journalist, editor and officer of the Manchester & Salford branch of the National Union of Journalists. She found herself getting worried when her work was being cancelled and by 20 March she was laid off with no work except for a few editing jobs that she was completing. She said:

“By the end of April all my outstanding invoices will have been settled, I hope, but I must assume some of my creditors may not be able to pay me. Then I will have zero income. Luckily my work overheads are low, but I have a mortgage and bills to pay, and I need to eat too.”

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Louise Bolotin

Louise feels, “slightly more buoyed by the chancellor’s package of financial support for the self-employed…it will be taxed, but so would any money we’d actually earned so I’m happy with that. For those with very low earnings they may not pay very much tax on that grant at all.”

Her main concern is with the timing, as  “it is likely to be early June before HMRC contacts self-employed people to fill in a form to claim the money – I may have just enough to scrape by until then, but many freelancers need cash right now.”

Overall, Bolotin believes. “This package will cover my bills and put food on my table. I won’t have any money for anything else but as everything is shut and I can’t shop or go to concerts that’s fine. I’m already using the downtime to find more work, but this will give me some basic financial security.”

Not all people are covered from any of the government’s aid plans. Robin Graham, Manchester humanitarian and director of Feelgood Communities CIC, runs workshops on Happiness, Laughter, and Meditation. Robin leads a simple life on a low income. Some of his income is from other sources, but in the current situation, these have dried up. He does not seem to fit into any category to seek financial help. He only started taking a small freelance fee last year from his business.

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Robin Graham

Robin takes most of the profit from his workshops and gives it away to help others. He volunteers for and supports many community groups in Manchester, such as The Rotary Club and #WeStandTogether and also supports projects helping people in Africa.

He is worried about some of those he supports. “I help people living in poverty and without this money, at least one will not survive.” Robin said.

Since he is self-employed and all income sources are gone and has given profits from his company away, he does not seem to fit into any aid scheme. He dedicates his life to helping others, but now finds that he needs help himself. Robin is trying to stay optimistic and is spending his time now learning new skills to see if he can continue his Laughter Workshops online and find new online opportunities. He added, “I still feel blessed for what I have.”

The money will be there for many of the self-employed, but June is still more than two months away. This is a very long time for many self-employed struggling to survive until then. The Labour’s shadow chancellor, John McDonnell, said that the money was coming “too late for millions.” For people like Robin, it may not be coming at all.

Dale Anne McAulay

More details on the governments Self-employment Income Support Scheme can be found here

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