Chancellor faces calls to extend self-employment income support scheme

29 May 2020, 00:02

Chancellor Rishi Sunak is facing calls to extend the self-employment income support scheme
Chancellor Rishi Sunak is facing calls to extend the self-employment income support scheme. Picture: PA

By Megan White

Chancellor Rishi Sunak is facing calls to extend the self-employment income support scheme as the coronavirus crisis continues.

A cross-party group of 113 MPs has written to Mr Sunak warning many will not be able to return to work despite the Prime Minister's announcement on easing the lockdown.

The MPs said those workers, who include many plumbers, builders and hairdressers, "will be left without work and without support" if the scheme is not extended past Sunday.

Mr Sunak extended the furlough programme preventing permanent lay-offs by assisting with employees' wages until October, but he has not announced the future of the scheme for the self-employed.

The MPs, who include veteran Conservative Sir Peter Bottomley, wrote: "We are calling on you to ensure that this scheme is continued and to provide details of an extension as soon as possible."

Rishi Sunak extends job retention scheme until end of October

Siobhain McDonagh, the Labour MP who organised the letter, added: "This scheme is a lifeline for millions of locked-down workers right across the country.

“There are already significant holes in the support, but removing what is already in place would pull the safety net from under the feet of millions of self-employed workers.

“How can it be right for the furloughed scheme to continue but this scheme to not?”

The self-employment income support scheme (SEISS) offers grants worth up to 80% of average trading profits for the self-employed unable to work because of the lockdown.

It is paid in a single instalment, capped at £7,500, to cover three months of lost income.

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Federation of Small Businesses national chairman Mike Cherry said: "This cross-party intervention is a critical one.

“Our five million-strong self-employed community is facing a devastating income cliff-edge in only a few days' time.

“As the economy reopens, it will take time for demand pick up - it won't ramp up overnight. Employees have had the assurances they need.

"We must now have the same for the self-employed. Equally, we need to see policymakers mapping out how they intend to support the thousands of limited company directors that have been left with no targeted support at all."

The Treasury has said that more than £6.8 billion has been claimed through 2.3 million applications to SEISS.

And at least £15 billion has been claimed from the job retention scheme to cover the wages of workers placed on furlough.

Mr Sunak extended that scheme until the end of October, but said businesses will have to begin paying a percentage towards the salaries of furloughed staff from the beginning of August.

The Financial Times has reported that the Chancellor is set to ask employers to contribute 20 per cent of wages, as well as National Insurance and pensions contributions from then.