Self-employed

(asked on 11th November 2020) - View Source

Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of the reasons for the reduction in the number of people who are self-employed; and what steps, if any, they are taking to reverse the downward trend.


Answered by
 Portrait
Lord Agnew of Oulton
This question was answered on 26th November 2020

The UK has one of the most generous self-employed coronavirus support schemes in the world. The SEISS Grant Extension continues this critical support to the self-employed. The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but are facing reduced demand due to COVID-19. The extension will be in the form of two taxable grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 80% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits for 1 November 2020 to 31 January 2020, and capped at £7,500 in total. The second grant will cover a three-month period from the start of February until the end of April. The Government will review the level of the second grant and set this in due course.

Nonetheless, ONS data suggests the number of self-employed people dropped by 502,000 (a 10.0% drop) between December-February and July-September 2020.

The Government continues to provide additional support to help people start their own business, or develop their business if they are already self-employed. The New Enterprise Allowance provides support including mentoring and an allowance. In order to be eligible, claimants must be aged over 18 and either they or their partner must receive Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance, or they must receive Income Support and be a lone parent, sick or disabled.

Those on the New Enterprise Allowance have a mentor who gives them advice and support to help them set up their business and start to trade. Once their mentor has approved their business plan they may get a weekly allowance worth up to £1,274 over 26 weeks and they can apply for a loan to help with start-up costs.

Those who are already self-employed but not earning enough to move off Universal Credit completely can also benefit from the scheme. They may be able to get a mentor to give them advice and support to help them develop their business and apply for a start-up loan if their business is less than two years old.

New Enterprise Allowance contracts are set to end in 2021. The Government is looking into a replacement offer, and hopes to announce more details in due course.

Reticulating Splines