200,000 Londoners ‘fall through cracks’ of Rishi Sunak’s Covid bail-out schemes

Ross Lydall
·4-min read
<p>Rishi Sunak under pressure to help self-employed people hit by Covid</p> (PA)

Rishi Sunak under pressure to help self-employed people hit by Covid

(PA)

Chancellor Rishi Sunak today faced calls to help an estimated 200,000 self-employed Londoners who have “fallen through the cracks” of his Covid bail-out schemes.

Sadiq Khan joined forces with the mayors of Greater Manchester Andy Burnham and Liverpool city region Steve Rotheram to appeal for help for almost three million working-age people who have gone eight months without access to substantive Government aid.

People excluded from the Chancellor’s financial support include people who set up their business after April 6 last year – meaning they do not have sufficient tax returns to qualify.

Others who work for themselves for part of the week and earn less than 50 per cent of their income from self-employment also cannot apply for help.

Business people whose profits exceed £50,000 are also excluded – though those generating £49,999 in profits were receiving between £2,190 and £2,500 a month. Grass-roots campaign group Excluded UK says the majority of traders making more than £50,000 were not high earners.

Company directors who take a small salary and rely on dividend payments for their main take-home income have also lost out, as have freelancers who are required to go on company PAYE schemes.

People on maternity or paternity leave may not receive support equal to their pre-leave salary, while new employees or those made redundant by the scheme’s cut-off date may also lose out.

In London, there are an estimated 100,000 newly self-employed people missing out on Covid financial support, plus about 79,000 small traders whose profits exceed £50,000 and 21,000 directors who take the bulk of their income as dividends.

<p>Es are good: Mayor Sadiq Khan arrives at City Hall on his electric bike</p>PA

Es are good: Mayor Sadiq Khan arrives at City Hall on his electric bike

PA

In a letter to Mr Sunak, the mayors, who will attend an Excluded UK event today, called for “urgent” help to be provided in next week’s spending review.

They wrote: “We welcomed the emergency financial support the Government provided throughout this crisis, including the recent furlough extension and additional support for the self-employed. “Yet despite this there remain, according to the National Audit Office, a staggering 2.9 million people who are simply not eligible for the Covid-19 financial support schemes.

“This is an intolerable position for these businesses and individuals to still be in. After eight months without support many are facing continued financial hardship through no fault of their own and huge uncertainty ahead – their incomes have dried up but they can’t access the financial support they desperately need.”

Mr Khan yesterday unveiled a £10m “Green New Deal” scheme to support 1,000 “green collar” jobs across the capital.

He said the jobs installing solar panels on schools and community centres and making cold and damp homes more energy efficient would help to tackle air pollution and climate change.

New data shows that London’s £48 billion green economy is now bigger than the construction and housing sectors and has created more than 161,000 jobs in the last decade.

The Mayor wants to double the size of the green economy in London to £100 billion by 2030.

The three-part plan includes a strand to encourage walking, cycling and electric vehicles and improve access to green spaces.

Mr Khan said: “The funding will directly help those most likely to experience cold and damp homes, and also support Londoners with limited access to green space. We must rebuild our city post Covid so that it’s cleaner, greener and fairer.”

The Treasury said £200 billion had been provided in worker support schemes. It said that about 1.175m people who earned less that half of their income from self-employment would still be entitled to furlough payments, though not as much as full-time employees.

A Treasury spokesperson said: “Our Self Employment Income Support Scheme is one of the most generous in the world – and we’ve increased the value of the third grant, ensuring those who cannot trade or are facing decreased demand receive 80 per cent of their average trading profits from November to January.

“We’ve acknowledged that not everyone has been helped in the way they would have wanted, but overall the Government has provided a huge amount to help businesses and families through this crisis and the Self-Employment Income Support grant is just one part of our comprehensive package of support which also includes loans, tax deferrals, newly extended mortgage holidays and business support grants.

“The scheme’s eligibility criteria are designed to most effectively target support to low earners and prevent fraud.”

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