The government is being urged to fulfil a promise to “do whatever it takes” to protect workers from the impact of coronavirus disruption, as MPs say there are more than a million people not covered by its financial support schemes.
In an interim report examining the economic impact of COVID-19, the Treasury Select Committee said many freelance workers and recent employees had been “locked out” of receiving financial aid.
It praised the Chancellor Rishi Sunak for acting “at impressive scale and pace” in creating the packages of support for businesses to access cash and pay staff during the lockdown since March but said it was clear there were cracks.
“The Treasury’s interventions have been welcomed by many but rolling out financial support at pace and scale has inevitably resulted in some hard edges in policy design and some critical gaps in provision,” it said.
“The government must assist these people if it is to completely fulfil its promise to do whatever it takes to protect people from the economic impact of coronavirus.”
The study was released just 24 hours before the latest employment figures are due to be revealed.
They will cover jobless claims in May following a record spike in April despite the support schemes propping up the economy.
The chancellor’s emergency loan programmes have paid out almost £35bn to businesses so far, according to the latest Treasury data, while the so-called furlough scheme had cost the best part of £20bn.
But the MPs’ report stated that the Job Retention Scheme had left many newly-employed people behind – despite the initial 28 February cut-off date for eligibility being extended to 19 March.
MPs cited employer delays in submitting paperwork and also pointed to HM Revenue & Customs being unable, through time constraints, to process claims using employment contracts.
The committee said it was crucial that hundreds of thousands affected, and all new starters, could have access to support.
In addition it said those who had become self-employed within the last year, along with people whose companies have annual trading profits of more than £50,000, should get help too.
The report said company directors who take their salaries as dividends were among those to have been missed.
Committee chairman, Mel Stride, said: “The chancellor has said that he will do whatever it takes to support people and businesses from the economic impact of the pandemic.
“Overall, he has acted at impressive scale and pace.
“However, the committee has identified well over a million people who, through no fault of their own, have lost livelihoods while being locked down and locked out of the main support programmes.
“If it is to be fair and completely fulfil its promise of doing whatever it takes, the government should urgently enact our recommendations to help those who have fallen through the gaps.”
A Treasury spokesperson responded: “The swift and targeted action we’ve taken has protected millions of jobs and livelihoods and our interventions have been rightly welcomed by the select committee.
“Our wide-ranging support package is one of the most comprehensive in the world – with generous income support schemes, billions paid in loans and grants, tax deferrals and more than £6.5bn injected into the welfare safety net.
“All our support is targeted to make sure we use public funds responsibly, helping those who need it most as quickly as possible, while minimising fraud risk.”
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