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MPs say economic impact of lockdown not shared evenly despite 'all in it together' claims

Image credit: PA images

MPs say economic impact of lockdown not shared evenly despite 'all in it together' claims

The economic impact of the coronavirus lockdown has not been shared evenly, despite the UK Government's claims "we are all in it together", a cross-party group of MPs has said.

Chancellor Rishi Sunak's claim was dismissed by the Business, Energy and Industrial Strategy (BEIS) select committee, which has accused ministers of repeatedly ignoring warnings that women, freelancers and agency workers were bearing the brunt of financial hardship as the UK struggled with the crisis. 

Chair Darren Jones has now written to Business Secretary Alok Sharma, highlighting gaps in the government's worker support schemes, the treatment of emoloyees during the pandemic and a string of health and safety issues.

The letter asks the government to review the success of its various emergency loan schemes and the behavior of banks - some of which have closed down the accounts of small businesses - as well as problems arising from unpaid business rents and for firms whose sectors will continue to be hit by pandemic restrictions.

Jones, a Labour MP, said that while the Treasury and business department deserved "signficant credit" for their efforts in protecting workers when the virus was reaching its peak, it was "inevitable that issues would emerge concerning the effectiveness of the government’s support package and its impact on workers and businesses".

He added: "However, it is also the case that the alarm over gaps in the government’s support, such as for women, and those affecting freelancers and agency workers, were being raised repeatedly by those affected and yet these warnings continued to go unheeded.

“Rishi Sunak echoed a previous Chancellor in suggesting that the coronavirus has seen us all in it together. However, it’s clear that the reality of the economic lockdown is that its impact has not been shared out evenly and that it is falling very heavily on some parts of our economy."

Jones, a former lawyer, said sectors including retail, the creative industries and manufacturing had raised fears over redundancies after the government announced the tapering off of its multi-billlion pound furlough scheme.

“It’s clear that some sectors of our economy will continue to face very challenging conditions. The shutdown of the aviation and aerospace sector will, for example, have a longer-term impact on these industries compared to others," he added.

"In some parts of hospitality and in other sectors too, difficult trading conditions and continuing restrictions threaten future revenue and their viability.

“It’s important the government quickly learns the lessons of recent months so that they can act in future with more policy sophistication and transparency and be able to step up and deliver the most effective support possible to workers and businesses."

The committee chair said it was essential to put in place sector-specific support, particularly given the likelihood of a potential second coronavirus wave and the possiblity of local lockdowns.

The letter also raises concerns over an increase in profiteering, customers unable to secure refunds for services they had paid including cancelled holidays, and late payments putting small businesses at risk of going to the wall.

The letter comes as Sunak considers a levy on internet shopping to help bricks-and-mortar stores compete with internet retailers. 

The Treasury highlighted concerns in a call for evidence last week that business rates were harming the high street because online rivals did not need to rent “high-value” properties.

The business department has been approached for comment.

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