Sadiq Khan has written to chancellor Rishi Sunak to demand more financial help is given to the capital’s self-employed workers amidst findings that one-in-three self-employed Londoners will not receive any assistance.
The London mayor’s letter, written to Sunak and business secretary Alok Sharma, claims that up to 290,000 Londoners, 12 per cent of the capital’s total workforce, are not eligible to receive anything from the scheme.
The £9bn Self-employment Income Support Scheme (SEISS) sees the government paying 80 per cent of profits, up to £2,500-a-month, to self-employed workers affected by the coronavirus crisis.
The scheme is not open to people with annual profits of £50,000 or more, anyone that began as a self-employed worker after the end of the 2018-19 financial year or anyone who earns less than half of their income from self-employed work.
The first payments are expected in June.
Khan said the £50,000 threshold did not account for London’s higher cost of living and that the scheme needs to be altered to create a “sliding scale of support” for those earning over that amount.
He also called for newly self-employed people and those who earn less than half their pay from this type of work to be included in the package.
“Families in London with a household income of just over the £50,000 threshold will struggle without access to support,” he said.
He added: “We estimate that over 100,000 Londoners have become self-employed within the last 12 months, around 12 per cent of the total self-employed workforce in London. This includes new graduates and new entrants to various sectors.”
Khan also called for funds to go to applicants sooner than June and that he is “concerned that there is an immediate gap in support for self-employed people who will struggle to get by between now and June”.
Joel Harrison, who runs a drinks marketing business, told City A.M. that the steep £50,000 cut off was unfair for London business owners.
He said: “I’ve been self-employed for 12 years. In that time I’ve worked hard to grow my business and I now find myself earning over the £50,000 limit set by the government for claiming help during the current crisis, and I have lost all of my business from May onwards.
“The energy and entrepreneurial spirit of those who earn just a pound above £50,000-a-year threshold means Sunak has treated us like wide-eyed kittens, full of energy and hope that keeps us going on a daily basis.”
Sunak has said the scheme was designed to prevent fraud and to ensure all eligible workers could access it when it is open.
When announcing the package, Sunak said it was too difficult for the Treasury to pay out anyone who did not have a tax return for the 2018-19 financial year, which was due in January, and that 95 per cent of self-employed workers should be eligible.
He also said that the scheme won’t go live before June so that self-employed workers who had not given back their tax return had extra time to do so.
The Treasury was contacted for comment.