Self employment, though under huge pressure during Covid, is likely to experience a rise after the pandemic with unemployment high. Women in business often don’t get the support they need. This has to change.
The news this weekend of the national lockdown was followed by an announcement on the extension of the furlough scheme and an immediate response from self employment campaign group IPSE saying that unless the Government expands support to include all self-employed people, thousands will face “financial calamity” under the new restrictions.
The Government announced today that self-employed people who are eligible for the Government’s Self Employment Income Support Scheme can claim 80% of their earnings, the same as furloughed employees. However, many self employed people are excluded from the scheme, including limited company directors and the newly self-employed. IPSE says there has been a 341 per cent increase in the number of self-employed people on Universal Credit since 2019 because of the Covid pandemic.
The reports of people struggling and ONS figures showing a big drop in self-employment come as analysis of data from the past decade by recruitment and training business SHL show an additional 59,358 new companies were created in the UK between June and August compared with the same period last year. SHL said its findings suggested there were “tens of thousands of new entrepreneurs”. ONS figures show the overall number of new businesses registered fell in the first months of lockdown and rose as lockdown eased to reach similar levels to last year. Experts says this is likely to be because job loss has pushed people into solo self-employment. Others point to previous recessions and the fact that they have tended to be followed by a rise of entrepreneurship, often out of necessity, and this looks likely to be one of the long-term outcomes of Covid.
Reports so far show that women’s businesses have suffered disproportionately in the pandemic. A survey by small business lender iwoca in the summer found that female small business owners were more likely to have forgone a salary during the pandemic. Half of the women (50%) responding to the survey reported that they hadn’t taken a salary since the beginning of the lockdown, compared with 47% of men. They were also more likely to say they would not take a salary over the next 12 months, with 42% saying they expected to go without wages compared with 38% of men. Women were additionally less likely than men to report having returned to pre-Covid activity, with 14% of women reporting business was at normal levels compared with 21% of men.
A report by King’s Business School in October also found women-led businesses fared worse in lockdown than those led by men. Part of the reason is due to women’s primary role in childcare and childcare infrastructure, under enormous threat during Covid.
But there are other problems, such as lack of investment in female enterprise. The Federation of Small Businesses says its research shows Government must ensure that all enterprise development programmes are equality impact-assessed and should build and support loan schemes which are specifically targeted at women entrepreneurs. FSB analysis shows that women are more likely to use less conventional schemes such as crowd funding and angel financing.
With concerns that large numbers of women could be losing their jobs or dropping out of the workforce as a result of Covid, there is a need for Government and others to urgently look at all of these issues as we come out of the pandemic.