UK govt under pressure to extend bailout terms to self-employed

The UK government was under increasing pressure to extend its wage guarantee to cover the self-employed hit by the Covid-19 crisis as a former central bank governor called for intervention and a union representing gig economy workers said it was taking legal action.

Mervyn King, Bank of England Governor during the 2008 financial crisis, said Finance Minister Rishi Sunak needed to offer the bailout on the same terms as those given to company employees.

Sunak pledged employees laid off during the crisis would get at least three months pay at 80% of wages up to £2,500 a month. However, the package for self-employed workers was far less generous at £94.25 a week in universal credit benefits and a deferral on tax payments until next January.

King urged Sunak to disregard the impact on public borrowing and spend what was needed to help the 5m workers in Britain classed as self-employed. The £94 benefit mirrors statutory sick pay, one of the lowest levels in Europe and an issue the government has sidestepped.

“It’s a good starting point because it would be equivalent to the support that’s being given for paying wages. Whether we will need to go higher than that is something that’s impossible to judge today,” he told the BBC.

The government encouraged an increase in people registered as self-employed after the 2008 crisis as it allowed it to classify them as employed regardless of what they were earning and keep them off the unemployed or benefit lists.

The Independent Workers Union of Great Britain (IWGB) said it was taking legal action against the government over the matter as well as its failure to ensure the health and safety of those still employed through proper sick pay.

The union argued that the bailout discriminated against “gig-economy” and other self-employed workers, who are not included in this scheme, and forced people to chose between no earnings or working while potentially ill.

“The current arrangements are not only discriminatory and risk driving millions of workers into deeper poverty, but are also a major threat to public health, since many workers are forced to continue working while sick or while they should be self-isolating in order to survive,” the IWGB said.

Greg Howard, a Deliveroo rider and Secretary of the IWGB’s Couriers and Logistics branch said he was being refused “even the most basic protections”.

“While the government expects workers such as myself to provide essential services during this crisis, if I am sick or if the company I work for has to downsize, I’ll be driven into deeper hardship. The law has to change so that it protects all workers.”

IWGB general-secretary Dr. Jason Moyer-Lee said: "Many low paid and precarious workers are on the front lines of this crisis distributing food, delivering medical samples, cleaning buildings and looking after children in need, yet they have the least protection.”

“Many who become sick or need to self-isolate will receive little or no sick pay. Others who are laid off will not receive wage subsidies from the government because they are not employees. No one wants to be litigating right now, but we also cannot stand by while our members are exposed to unnecessary risk or driven into destitution.”