Britain is addicted to business. In 2019, before Covid cast its long shadow on us all, a record 700,000 businesses launched in the UK – a 2.8 per cent increase over the previous year.
Nowadays, it’s much more common for young graduates to aspire to start their own company, or work in a start-up, rather than plump for a more predictable ‘investment banker’ or FTSE giant’ option. And I should know, being one of those very graduates.
Frankly, why wouldn’t they? Raised on a diet of Dragons’ Den and The Apprentice, why would they seek to spend most of their life doing a boring 9-5 job they might not even like? The world has changed.
The figures back this up: young people are more and more likely to set up their own businesses, with a recent survey showing that 83 per cent of 18 to 24-year-olds dream of being self-employed. That doesn’t mean they have lost sight of real-world challenges: 50 per cent of those in this age group believe becoming a business mogul will benefit them financially, a reassuringly old-fashioned viewpoint.
Credit where it’s due, the Government has been backing and promoting various schemes and loans to boost entrepreneurship in the UK. And here’s a positive little reality-check from continental Europe: ‘Entrepreneurship thrives in the UK’ is something I was always told, and is a well-known and accepted fact across the Channel. So you can imagine my surprise when I was told the Government’s financial support schemes, in the present context of a global pandemic, was leaving many businesses and self-employed people fending for themselves.
It really was extremely hard for me to believe when I realised that the £330billion package the Chancellor announced back in March had conditions, problematic conditions. Conditions which meant that, through no fault of their own, millions of self-employed people, groups and small businesses fell through the funding gaps, unable to access financial help from the Government.
By some estimates, 3million UK taxpayers have been left with no financial help since March, ineligible for the Government’s scheme. Other estimates put that figure at closer to 6million. For some, then, Chancellor Rishi Sunak’s ‘unprecedented measures for unprecedented times’ meant they weren’t working but still received a large proportion of their salaries.
For others, though, those unprecedented times meant they were unable to work, or told not to work, and received exactly no compensation, no support, no help, in return.
The list of reasons (well, excuses) for this was, and is, long: newly self-employed and took the plunge to start something new after 6 April 2019? Sorry, you don’t have the required three years of tax returns to qualify for help. New PAYE employee who started after the Government’s cut-off date for the scheme? Ah, too bad, what a difference a week or two makes, eh? New employee who started before the cut-off date but whose employer did not fill in the required paperwork in time to add them to payroll? Guess what mate, no help for you.
Individuals doing a mix of PAYE/self-employment with less than 50 per cent of income from self-employment were also deemed ineligible for Government support, as were individuals with a trading profit of £50,000 and above. Other categories of people unable to access financial support included directors of limited companies, PAYE freelancers on short-term contracts, employees denied furlough by their employers (specific examples include those on maternity leave, those shielding, and zero-hours contract workers), employees made redundant, as well as individuals on maternity/parental/adoption leave.
It’s quite a list, isn’t it, incorporating a wide range of jobs, responsibilities and pre-pandemic earning potential. Well, it is also far from exhaustive. Many people in many different situations and across many different employment statuses, professions and industries have been affected.
Back in July, the 97 MPs, members of the All Party Parliamentary Group on Gaps in Support wrote to the Chancellor, asking for a relaxation of the rules to allow more people to qualify for support. After all, the 3million people ineligible for the Chancellor’s scheme represent 10 per cent of the country’s workforce... and that’s without counting the number of people who have been denied furlough by their employer: 100,000 people across the country are estimated to have been denied furlough.
Many single parents had no choice but to take unpaid leave to look after their children while schools were closed. New mums and dads have been denied the maternity and paternity pay they need.
Four months later, however, the Treasury’s announcement shows Mr Sunak did not listen.
In 2019, the United Kingdom ranked number 2 overall in a study determining the best locations in Europe for a startup. Key factors included ‘Costs of doing business’ and ‘Business climate’, according to consumer research company NimbleFins.
When it comes to start-ups, the mantra ‘Location, location, location’ is just as valid as it is for house-buyers. While the UK Government has encouraged entrepreneurship in recent years, making the UK known for its entrepreneurial spirit worldwide, it has failed to help those it once encouraged, as they have fallen victim to one of the most unprecedented crises in recent history.
The start of November marked the end of the furlough scheme. As winter loomed and the pandemic showed every sign of returning in a bigger wave, the Chancellor announced that a new system of wage subsidies would start, to continue providing support through a difficult winter ahead. While those measures are welcome (but might already fall short for a lot of businesses) they again do not provide for millions of self-employed people across the UK, who have already been excluded from the previous schemes rolled out at the beginning of the pandemic.
To this day, 3million self-employed people are still unable to access any financial support from the Government, the same Government that rewarded and encouraged their entrepreneurial spirit in the past.
If the Government does not reassess its support scheme, this crisis might lay bare the fragility of self-employment, leaving hundreds of thousands of future graduates to choose a ‘safer’ career path over their entrepreneurial dreams.
That is likely to mean fewer start-ups, fewer jobs being created and, inevitably, a weaker Britain. As someone who grew up admiring Britain from afar, I cannot understand why this country’s entrepreneurial engine is being left to rust; it is one of the greatest business assets Britain has.
In the years ahead, as Britain struggles to recover from the double impact of Brexit and Covid, I do worry that politicians will realise too late that the agile, lean, enthusiasm of entrepreneurs was exactly what the country needed to grow its way out of recession.
And the thing about entrepreneurs is that, if Britain isn’t the right place, they will move somewhere better. And so the country loses not just many of the present generation of fledgling businesspeople, but the generation to come as well.
The Chancellor must realise that helping the forgotten workers and business people is a short-term cost with huge long-term implications – not least for future tax revenues, employment figures and general economic well-being.
It’s not just their futures that are at stake: it is all our futures.
If you or your loved ones are part of the millions of Britons unable to access financial support, please get in touch with us on www.gapsinsupportappg.org, and we will do our best to hold the government to account.
External Affairs Officer, Best for Britain
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