Treasury must think creatively to protect freelancers from COVID-19 disaster

Philippa Childs · 12 April 2020

When I took over as head of Bectu 18 months ago I couldn’t have imagined that the union would be at the heart of the fight for the soul of the creative industries.

I don’t write that lightly, but, that is truly where I believe things are.

COVID-19 has devastated nearly all of the industries Bectu has members in. There is no work for any of Bectu’s freelance members at the moment.

The theatres and the cinemas were the first to shut down, followed by TV and film productions, then art galleries and finally the complete cancellation of live events such as festivals and concerts.

The speed at which things developed was alarming, but inevitable.

Since then, Bectu officials have worked flat-out gathering information that reveal a troubling picture of people desperate for help and with nowhere to turn.

The statistics are stark, but the personal stories people have shared with us keep me awake at night. They have included potential bankruptcy after 20 years in the industry, families in rented accommodation with no financial support, pregnant mothers facing bankruptcy, carers for the disabled and elderly facing abject poverty.

Bectu’s role in lobbying government

Bectu has played a pivotal role feeding this information into the Creative Industries Federation, the British Film Council and to the BFI COVID-19 Taskforce so that this intelligence can be fed into the Department for Digital, Culture, Media and Sport, the Department for Business, Energy and Industrial Strategy and the Treasury.

Like many other parts of the economy, the employment structures used across Bectu’s industries are highly flexible, very complicated, and offer very few protections. As a result, the two Treasury schemes intended to support employees and the self-employed fail to cover thousands of Bectu members.

The government’s response to this crisis has been unprecedented and its ambition has to be applauded, but we know that it has exposed a lack of knowledge about how some parts of the economy operate in practice.

That’s why in our latest communication with the Treasury and MP’s we highlighted a list of problems with the current income support schemes and suggested solutions to ensure that no-one is left behind during the coronavirus pandemic.

Potential solutions

The gaps can be split into roughly two distinct groups: people who work on short term PAYE contracts and are not covered by the Coronavirus Job Retention Scheme (CJRS) and people who aren’t covered by the Self-Employed Income Support Scheme (SEISS).

Across the creative industries there are people who regularly work PAYE contracts as their main source of income but were not in a contract on 28 February and did not start another contract after that date. Our latest survey shows around half of all those who work in this way in the film and TV sector are in this predicament. With no employer able to furlough them, it is essential that the government steps in.

We think the Treasury should set up a new Freelance Worker Income Support Scheme using the PAYE data they have to calculate average earnings for people who declare as ‘PAYE freelancers’ and compensate them at the 80% rate directly without going through an employer’s payroll system. Where furloughing under the JRS is possible this would still be encouraged.

These freelancers aren’t the only group left out. Nearly two million workers in the UK are set up as Personal Service Companies (PSCs). This is often the only option in the industries they work in, and we know some have been forced into this position against their will by engagers, however it leaves them unable to fully access either the CJRS or the Self-employment Income Support Scheme because they will take most of their income in dividends from their own company.

The issue for the Treasury is the difficulty of distinguishing PSC dividend income from income from other dividends and designing a system that does not reward people for dividend income not derived from PSCs.

We have proposed two potential work-around solutions to the Treasury that could help this group and make sure they can access support that reflects their true income and helps the get through this crisis. One involves looking at dividend vouchers and the other looking at self-assessment returns combined with the balance sheet of a PSC.

We have also raised concerns about people who might lose out on support because they have been ill or taken maternity leave during the period used for calculating average income. Limiting access to the SEISS for those who have earned over £50,000 profit over three years is also a very sharp cliff-edge for a single income household who has made £51,000 profit, for example.

Bectu will continue to raise the plight of freelancers

These may seem like minor holes in what is a mammoth programme of support, but for every worker who falls foul of these technicalities it is the difference between economic survival and disaster.

The solutions we have put forward are realistic. Before the Treasury starts thinking about how we recover economically from the effects of coronavirus it must ensure that everyone has a safety net to fall back on.

Bectu members have already waited patiently for help. They can’t be forgotten just because they don’t fit into a neat box. The government has already delivered for the majority of the economy but it can’t stop now.

Our people are the backbone of the creative industries and we will not allow them to be financially ruined. To do so will irreparably damage a sector that contributes over £100 billion annually to the UK economy.