The Chancellor should use next week’s Budget to address gaps in
financial support, affecting the self-employed, mothers who have
recently taken maternity leave, and those working in sectors such
as the creative industries, say the Business, Energy and
Industrial Strategy (BEIS) Committee in an interim
pre-budget report on The impact of Coronavirus on businesses
and workers, published today.
The report makes a series of recommendations to plug gaps in
support, review arbitrary exclusions, and refine the Government’s
support so it is targeted at those most in need. The report finds
the premature withdrawal of furlough or the Self-Employment
Income Support Scheme risks damaging sectors such as the creative
industries and hampering the UK’s ability to recover quickly with
a focus on good quality work.
The report commends the Government for moving quickly at the
start of the pandemic to implement wide-ranging and unprecedented
financial support schemes but also finds the Government has not
used the opportunity to identify long-term solutions, including
on the outstanding issue of commercial rent arrears.
, Chair of the Business, Energy and
Industrial Strategy (BEIS) Committee said: “The
Government deserves credit for moving quickly at the start of the
pandemic to help protect workers and businesses from the economic
fallout caused by the impact of Covid-19.
“However, because of eligibility criteria set by the
Government, alarming gaps in support have arisen. These have
unfairly affected certain workers and businesses, including women
who have recently taken parental leave. Most significantly, this
has had the effect of discriminating between self-employed
workers and employed workers. These issues have been raised
repeatedly with the Government over the past year but are yet to
be fixed. In what we will all hope is the last Budget under
lockdown, the Chancellor has a final opportunity to get this
right.
“This pandemic has highlighted several long-term trends
facing the country; with Covid, Brexit and the net zero
transition re-shaping the British economy. The Chancellor should
come forward with the long-term policies that can meet these
challenges. For example, a more comprehensive plan to develop the
education, skills and employment opportunities for workers across
the country; and targeted support for newly indebted businesses
who need to be supported to invest for growth, productivity, job
creation and decarbonisation in the decade ahead.”
The BEIS Committee’s report recommends the Government considers
further tailored support for sectors heavily affected by the
pandemic and expresses particular concern for 'bricks-and-mortar'
retail, unable to compensate for physical closure, and businesses
such as those in the 'live events' industry which, though not
legally forced to cease operations, have seen a collapse in
business due to health restrictions.
The report notes that businesses have taken extraordinary
measures to innovate and adjust to the economic restrictions and
welcomes the decision by many major supermarkets and other
businesses to return financial support they concluded was no
longer required. However, the report also expresses
disappointment in the behaviour of some corporations who have
accessed taxpayer-funded support in bad faith or have treated
workers poorly. The Committee reiterates its call for the
Government to attach conditions to the use of taxpayer- funded
support and recommends the Government reviews what enforcement
powers it has to 'claw back' support where appropriate.
