As a freelance musician and actor, I have seen and spoken to a lot of self-employed colleagues and friends recently about their fears regarding Covid-19. Obviously the number one priority must be the health and well-being of the general public, but the government must also consider how best to protect its citizens and businesses from financial ruin.
The measures announced to protect small and medium-sized businesses will hopefully help to prevent firms from closing (though for many even this will be too late, and I know of several that have already folded), but protection for the self-employed – an estimated 6 million people – is still a glaring omission.
The introduction of ESA claims being made available to the self-employed who are advised to self-isolate is, on the face of it, very welcome. However, without wishing to look this particular gift horse in the mouth, it does not address the root of the problem. A one-off payment of less than £100 for a week of self-isolation will do very little to help those who have lost thousands of pounds worth of work and do not know when bookings and contracts will pick up again.
I have spoken to people who work as entertainers in care homes who now face cancelled bookings with no compensation; musicians who have had to abandon entire tours; actors who have had several months’ worth of work put on hold indefinitely, perhaps permanently. Even a dentist who, despite working for the NHS, counts as self-employed and is therefore not entitled to sick pay.
Covid-19 is likely to cause a significant number of deaths, but these could be outstripped by deaths caused by economic hardship, unemployment and increased levels of homelessness that we are bound to see in the coming months. As expected, it turns out the ‘flexible workforce’ that has long been advocated by conservatives (both small and large ‘c’) is a one-way street, proving resolutely inflexible for workers trapped in it. It seems likely that Britain’s patchwork, deunionised gig economy will soon be exposed in the harshest of ways.
We are told that these are unprecedented times which even the Health Secretary has compared to the Blitz. Yet this has not been reflected by the introduction of the kind of radical policies needed to get people through. A number of banks are now offering mortgage ‘holidays’, but we cannot rely on the benevolence of the free market to treat individuals with compassion and kindness. Besides, it doesn’t take into consideration the problems that private renters are likely to face. Rent and mortgage holidays should be made available to anyone who requests them, without conditions. While this may seem unfair on private landlords, losses incurred by the drop in rent would be offset by the mortgage holiday.
In addition to this, there is a strong argument for the introduction of a temporary universal basic income, perhaps for a 2 or 3 month period. Again, this should not be means-tested, which would no doubt be cumbersome, costly and ineffective. It is difficult for many self-employed people and small business owners to quantify the losses that they are incurring, so they should not be asked to prove it. Of course, a policy like this would be expensive, but the social and financial cost of dragging many thousands of people into poverty through government inaction makes it an option worthy of serious consideration.
I’m not an economist. I can’t say with any confidence that these policies would be economically viable. But the drip-feed of half-measures and placebos that we have seen so far has not reassured me that the current administration has any idea of the scale of the problems many are facing. It has meant that millions are scared for their future and wondering how they will be able to sustain themselves. Unprecedented times call for unprecedented and radical measures.
* David Gray is a musician, actor and writer based in Birmingham. He is a a co-director of Keep Streets Live
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11 Comments
There was wasn’t this kind of reaction when millions were thrown out of work in the early 1980s.
“it turns out the ‘flexible workforce’ that has long been advocated by conservatives (both small and large ‘c’) is a one-way street”
Perhaps also by liberals (both small and large ‘L’)?
David,
the SNP have put forward a five point plan along the lines you suggest https://www.scotsman.com/news/politics/snp-calls-five-point-plan-protect-peoples-incomes-2503117
It calls for introducing a guaranteed income for everyone, increasing Statutory Sick Pay, raising Universal Credit and Child Benefit payments, and providing support for businesses to prevent redundancies. Entitlement would be expanded to include the self-employed and those under the earnings threshold.
Here David, you are now,my kin, we are in many similar areas of expertise, and agree with all this article.
David, no real need to be an economist to talk sense. Experts are not what we do or don’t need. We need those with the expertise of experiences that relate. We see that as expressed herein.
@ Joe Bourke Glad you made that point just now, Joe. What’s happening now proves that devolution was the right thing to do. Where it goes next is for the future.
Here in Scotland, on the BBC Scotland channel , we’ve just watched Nicola Sturgeon hold her daily press conference with Dr Catherine Calderwood the Chief Medical Officer.
I make no party political point when I say that Nicola speaks with great authority, honesty and calm……… She is a most impressive capable leader. and we hope the UK government can work as closely as possible with her.
@ Joe Bourke
@scotgoveconomy
Economy Secretary @FionaHyslop has outlined the actions being taken by @scotgov to support Scottish businesses affected by #coronavirus ➡️https://www.gov.scot/news/gbp-2-2-billion-for-business/ …
In the short term, govn computer systems would melt down with the overload if everyone applied simultaneously, in normal times it would be a five year project to get UBI working so it probably can’t be done in the short term.
A three month rent holiday for those affected with the landlord able to claim the money back or to get the bank to give him a loan payment holiday, but you would need to have strong redress such as property confiscation to stop fraud.
Restaurants and pubs to be converted into food distribution centres due to their local nature with deliveries, basic food packs for a fiver? Plus they can do hot food deliveries. Gets everyone back into employment, possibly with some govn subsidies where necessary.
A loose form of paid national service for those in the least at age risk group, definitely going to need lots of strong young people on the farms, etc. They also do the grunt work in other areas.
Retirement age reduced to sixty with the full state pension (not NI contribution based) to get the most at risk working age group out of the way and fill in their jobs with younger people. Will mean higher taxes post-virus but possibly fuller employment in younger age groups might may for it.
Of course we need short term solutions. But we also need to find long term solutions to deal with the many crises, mostly made by ourselves that we face and will face.
We remember that after the war there was a period when there was a determination to ensure everyone had somewhere to live, support when they had problems – hence the NHS and so on.
Gradually all this was forgotten. Of course the country can afford better. We simply need a better means of running our country.
There is bound to be a certain amount of determination to do better as the crisis passes. We need people with the ideas to ensure that we actually plan for an uncertain future.
I am not at all optimistic. We have mismanaged the planet for thousands of years. Why break the habit of many lifetimes?
Tom, you are referring to the post-war Beveridge consensus, the social contract of the time which the perceptive UN Rapporteur on poverty, Philip Alston, said in his powerful statement after his November 2018 fact-finding visit to Britain had effectively vanished. He referred to the indifference of the government to mounting poverty, the rather cruel way in which Universal Credit was being rolled out, how people were being forced to take any job under threat of sanctions and told that was the only way out of poverty, and the decimation of local government services. He spoke of the poor prospects of youth in an almost ‘alienated’ society and in his April 2019 report called for reforms.
As Liberal Democrats, we don’t expect much of this present government, but at least the crisis of Coronavirus has obliged it to think for the whole country, as William Wallace writes in another thread, and drop its populist stance though not its authoritarianism. Our party can now plan for a new social contract when the crisis is over between government and people, and offer the hope which you yourself are not yet able to feel. Please join in with us in developing the plan, already foreshadowed in recent articles on this site.
I’ve just watched the news. I’m gobsmacked at the extent of the econmeasures put in place. I’d always suspected that the Tories teally know how the economy works but have pretended not to.
There’s no doubt about that now. But I’m sure many are totally convinced that we’re on our way to hyperinflation.
The difference between a Labour govn going on a mad spending spree in normal times and this tory govn, is that the G7 have all acted simultaneously so the relative effect on currencies is not that great (Sterling got a bit hammered but not to the huge extent if this was done in isolation). A huge chunk of the national debt is held by the BOE so is it really debt or just a circular transaction done by QE that in better times can be written off? That is a bit beyond my brain to get around in the whole but the UK definitely needs to move towards self-sufficiency in food as soon as possible, just to be on the safe side!
I wonder what the effect on the housing market will be? Lower mortgage rates perhaps – perhaps not if there are a lot of defaults – but how can you change house if you can’t even be sure you can physically move out of it? Also areas of high deaths such as London, who is going to want to move there or foreigners keeping a second home there? Taking down the London market would take a lot of easy money out of the system and have knock-on effects elsewhere.
So you may have the opposite of hyper-inflation, falling prices for most things.