News | Published July 24 2020

Treasury Committee criticises shortfalls in economic support

The Treasury Committee has said that chancellor Rishi Sunak has effectively abandoned over one million people who cannot access existing support measures, following his response to an interim report into gaps in Covid-19 related economic support for firms and workers.

Sunak has been staunch in defending the support measures he has introduced, but Treasury Committee chairman Melvyn Stride - Conservative MP for Central Devon and former Leader of the Commons - said that the chancellor had “effectively drawn a line under helping the million-plus people who have been excluded from support for four months”.

The Treasury Committee’s report indicated that over one million individuals had not received government support and urged the Treasury to do “whatever it takes” to safeguard people and firms, but a defiant Sunak defended the existing system of small business loans and the furlough scheme having reviewed the committee’s initial findings.

Writing to MPs on the committee, Sunak said that it was “correct” that some people have “not been eligible” for furlough or self-employment schemes, while there were no specific initiatives in place for people of other employments statuses such as PAYE freelancers.

Yet, Sunak insisted that his policies were “right for the first phase of the crisis”, adding that the Treasury could not allow returns for the 2019-20 tax year to be used by individuals to attain self-employment support since it would open the door for criminals to “file fake or misleading returns” to claim a support grant.

Calling on the government to “rethink its position” on the committee’s behalf, Stride said: "Despite stating that he will not pick winners and losers when it comes to sectors and businesses that need support, the chancellor has done this when it comes to households and individuals.

"The chancellor said that the schemes were designed to be open and accessible to as many people as possible, but the committee remains to be convinced that more people could not have been helped.

"While the government is clear that it is moving on to the next phase of its recovery plan, it cannot just turn its back on those who are suffering."

A spokesperson for HM Treasury said on Thursday that the sheer scale of support packages provided were unprecedented and had already succeeded in helping millions of firms and people.

The spokesperson said: "We have kept nine-and-a-half million people in work, supported the incomes of 2.6 million self-employed people and helped businesses across the UK get through the outbreak - acting quickly to deliver one of the most generous and comprehensive packages of support in the world worth an initial £160 billion.

"As part of the next phase of our economic plan to rebuild and recover the UK, we recent announced our Plan for Jobs. We have made up to £30 billion available to support, protect and create jobs, helping ensure people and businesses can come back from this crisis stronger."

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Authored by

Alexander Bridge-Wilkinson
Junior Editor
July 24 2020

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