Freelance and self-employed workers in the theatre face bankruptcy within a year if further measures are not put in place to support them financially, it has been warned.
The caution comes as chancellor Rishi Sunak faces increased pressure from entertainment unions to offer pay assurances to the industry’s entire freelance and self-employed workforce, and provide “a real safety net for all workers”.
At the end of last week, Sunak said self-employed workers could access £94.25 a week in universal credit, while employees were offered 80% of salaries, capped at £2,500 per month.
Stage Directors UK executive director Thomas Hescott said he was “dismayed that the chancellor’s plans to offer economic support to the nation through the current worldwide crisis offers little protection for the self-employed”.
“There is a stark contrast between the government’s plan to protect 80% of an employee’s wages and the basic universal credit offering for the self-employed,” he said.
He described the means testing for universal credit as unfair, because anything the self-employed “have managed to save for their tax bill or their mortgages counts against them when applying for universal credit”.
And he warned that a decision to postpone the July tax bill until January 2021 was “a financial catastrophe waiting to happen”.
“It may offer some short-term relief for a few, but it is plunging the self-employed workforce into crippling debt. It will take considerably longer than six months for the self-employed to get back on their feet financially. By deferring payments without offering stronger and more comprehensive support alongside deferrals then we will see much of the self-employed workforce going bankrupt in 12 months’ time,” he said.
The Creative Industries Federation, meanwhile, is calling for a £15 billion fund to support the self-employed.
It said a recent survey had revealed that 60% of creative freelances predict their income will more than halve in 2020, and more than 50% of freelances who responded to a snap poll have already had 100% of their work cancelled.
It is calling for an emergency fund that “gives a time-limited and carefully targeted cash grant to the self-employed workers and freelances that need it most”.
In a letter, backed by more than 30 trade bodies, it states: “We propose that the government creates a Temporary Income Protection Fund of £15 billion to provide all self-employed workers with a monthly income matching their average existing earnings over the past three years, capped at average UK earnings after the basic rate of income tax and with a minimum monthly income of the Real Living Wage. There is now precedent for this across Europe.”
Equity previously criticised the suspension of the Universal Credit minimum income floor and tax deferrals as a “drop in the ocean compared to the losses experienced by our members”. It said they fell short of the support available to workers elsewhere in the economy.
Now, the union has penned an open letter to the chancellor, urging more action to be taken.
“We believe there are a number of performers and stage management currently engaged on conventional Equity contracts across the live and recorded media sectors, which should be included in the job retention scheme. Many of these workers were effectively furloughed in the last few days and share many of the characteristics of those who are included in the 80% salary scheme, but we need clarity on this,” it states, adding that “no one should be left behind just because their employment is insecure”.
“Creatives, freelancers and self-employed workers deserve the same support and respect as employees in secure jobs. £94 per week is not enough to live on. The creative industries alone are worth £117 billion to the economy and so much of this is because of our talented world-leading workforce,” the letter states.
It continues: “If we want the new economy to survive and thrive we need an income guarantee for the people who work hard in it”.
It describes a “more appropriate level of support” for members as one based on the London living wage and states that the government needs to talk to unions representing creative and freelance workers now “in order to safeguard creative skills and provide a safety net for all workers”.
The union has also begun a petition, calling for more support.