Home / Sources / Select Committees / Business, Innovation, Science… / The impact of coronavirus on businesses…
Select committee: Business, Innovation, Science and Trade Committee

The impact of coronavirus on businesses and workers

Closed Opened 13 Mar 2020 Closed 19 May 2021 12 recommendations 8 conclusions

Business, Innovation, Science and Trade Committee Inquiry on parliament.uk ↗

Inquiry scope (the committee's words)
Read the call for evidence for more information about this inquiry .

Where it stands

The inquiry is closed, opened 13 March 2020.

The committee has published 1 report, most recently Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report on 26 February 2021.

The government's response

Published 19 May 2021. The deadline was 26 April 2021.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government's response sets out the further support announced since the report, including extended schemes and a new Recovery Loan Scheme, and declines some proposals on eligibility and loan debt.

  • On targeted support, it says the new Recovery Loan Scheme will keep an 80% guarantee while "not extending the 100% guarantee for longer than needed", so support is "more targeted going forwards, as recommended by the Committee".
  • On gaps in support, it extended the Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme until September, but says that proposals for Company Owner Directors have not been taken forward because they rely on self-certification and would risk fraud.
  • On commercial rent arrears, it says the best solution is "market led negotiations" between landlords and tenants, but it "is ready to intervene further as necessary" and has launched a Call for Evidence. Tenant protection measures are due to expire on 30 June 2021.
  • On Covid loan debt, it states that the loans "are to be repaid" and that the private sector "should be the first port of call" for refinancing, pointing instead to the "Pay As You Grow" repayment options.

Read the government's response ↗ Report an error

Recommendations and conclusions

All 20 recommendations and conclusions

Reports

All reports

Evidence

  • 8 oral evidence sessionsLatest 13 July 2021
  • 45 witnesses
All evidence

Recent activity

Recommendations and conclusions 20 shown

Conclusion 1

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
We commend the Government for moving quickly at the start of the pandemic to implement novel and wide-ranging financial support schemes. We welcome these measures, which have delivered unprecedented levels of financial support to individuals and have shielded vast numbers from the potentially devastating economic impact of the pandemic.

Link to this item · Read this item

Conclusion 2

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
Whilst we welcome the overall level of support offered, we are disappointed that the Government has repeatedly chosen not to adapt and refine its support to address identified gaps in coverage. It is unacceptable that 11 months into the pandemic approximately 3 million people have fallen through the cracks. Mothers being discriminated against by virtue of having taken parental leave in the last three years is a particularly egregious example of the failure to refine support. We agree with the Treasury Committee (in its Eleventh Report, Economic impact of coronavirus: gaps in support and economic analysis) that the Government’s approach to employees and self-employed people has in practice been inconsistent, unfair and discriminatory.

Link to this item · Read this item

Recommendation 3

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
The Committee accepts that there are some groups who have been at a comparative disadvantage, such as those remunerated by dividends. The Government has cited administrative difficulties and the risk of fraud. The Government should consider solutions put forward on how income from dividends can be distinguished from unearned income from dividends.

Link to this item · Read this item

Conclusion 4

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
We welcome that many individuals who have not been able to access furlough or SEISS will have had support through Universal Credit, discretionary grants from local authorities, and mortgage and consumer credit holidays. However, we are disappointed by the Government’s suggestion that these are a sufficient replacement for individuals unable to access furlough or SEISS support. The repeated use of the risk of fraud as an adequate justification for not addressing gaps in support for workers is also unconvincing.

Link to this item · Read this item

Recommendation 5

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We are also concerned that gaps in support appear to have fallen disproportionately on particular sectors, such as the creative industries. Further Government action is required to support those sectors of the economy.

Link to this item · Read this item

Recommendation 6

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We recommend that the Government reviews the coverage of current support to make sure that the greatest support is provided to those individuals facing most hardship, and that any gaps in provision are addressed. We expect the Chancellor to announce measures to this effect in his Budget statement next week.

Link to this item · Read this item

Conclusion 7

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
We appreciate that not every job can be saved as the Chancellor has set out, but are nonetheless concerned about rising unemployment, which is particularly affecting women, BAME workers and young people because they are more likely to be employed in insecure work. We are concerned that damage may be done to some sectors by the premature withdrawal of furlough and the Self-Employment Income Support Scheme, which would hamper the UK’s ability to recover quickly with a focus on good quality work.

Link to this item · Read this item

Recommendation 8

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We recommend the Government urgently produces an economic assessment which sets out the opportunities and risks posed by structural long-term changes to the economy from the combined impacts of COVID-19, Brexit, and the net zero transition. We welcome the publication of the Skills for Jobs White Paper, and the Government should continue to build a comprehensive, long-term cross-departmental plan on education, skills and jobs to create good quality employment opportunities for the future.

Link to this item · Read this item

Recommendation 9

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
This plan should form part of the Industrial Strategy to ensure our educational institutions, key business sectors, the workforce and broader economy are strategically geared towards achieving long-term goals such as the net zero transition, our aging society and the technological modernisation of our economy. We recommend that the Government provide a detailed outline of their approach in its response to this report.

Link to this item · Read this item

Recommendation 10

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We welcome the sheer scale of financial support the Government has provided to businesses since March 2020. For many businesses, this support has allowed them to stay afloat during the pandemic. We also welcome the Business Rates Review announced in the March 2020 Budget to help business in the coming years. Whilst some sectors have understandably received targeted support and not every individual circumstance can be catered to, we recommend that the Government considers further tailored support for sectors heavily affected by the pandemic.

Link to this item · Read this item

Conclusion 11

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
We are particularly concerned for ‘bricks-and-mortar’ retail which is unable to compensate for physical closure, as well as 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 lack of targeted support for these businesses is exacerbating the divide between those which have had to close, and those which have not. We are also concerned that the lack of a targeted approach may be resulting in the perverse situation of the taxpayer inadvertently propping up large businesses which have done well during the pandemic.

Link to this item · Read this item

Recommendation 12

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We recommend that if the Government returns to any form of tiered system or localised lockdowns, that financial support for business should reflect that.

Link to this item · Read this item

Recommendation 13

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We expect the Government to respond to the pandemic with more nuanced and targeted policies in future, and recommend that the Government uses the Budget to review the support it has offered to businesses and announce more targeted support aimed at the sectors most in need.

Link to this item · Read this item

Recommendation 14

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We have previously called on the Government to attach conditions to the use of taxpayer-funded support and are disappointed that, on each occasion measures have been extended, the Government has failed to do this. We recommend that the Government reviews what enforcement powers it has to ‘claw back’ support where appropriate, and what additional checks or conditions could be applied to support for businesses in order to reduce instances of fraud, and to sanction businesses which have accessed public funds in bad faith.

Link to this item · Read this item

Conclusion 15

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
With the moratorium on commercial rent obligations due to expire soon, the Government does not appear to be any closer to identifying or facilitating a long- term solution to the difficulties faced by landlords and commercial tenants. While many landlords and tenants have been able to come to an accommodation, we are unconvinced that landlords and businesses will be able to identify a solution on their own in every case.

Link to this item · Read this item

Recommendation 16

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
The Government should use the time afforded by current time-limited support measures wisely to identify long-term solutions. The Government should consider active measures to address the issue of growing commercial rent arrears, and proactively work with businesses, landlords, banks and other stakeholders to identify an appropriate long-term solution.

Link to this item · Read this item

Conclusion 17

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
Throughout the pandemic the Government has attached expiry dates to support measures, which have since been found to be premature. In most cases, the measures have ultimately ended up being extended, which is undoubtedly the correct decision. In the early months of the pandemic, it was difficult to know long health measures would need to last. This has been further complicated by the discovery of new variants of the disease which appear to be significantly more infectious. However, the situation we find ourselves in is no longer novel. By continually failing to take a long-view, particularly now that we understand that health restrictions (and therefore business support) will be necessary for as long as the virus is prevalent, needless long-term damage is done to the economy and workers through repeated ‘cliff edges’, which ultimately turn out to be artificial.

Link to this item · Read this item

Conclusion 18

Conclusion · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Concluded (the committee's words)
As of mid-February, with weeks to go before many support measures expire, the Government has not yet set out which measures will be extended. We understand that the specific course of the pandemic is inherently uncertain, and new restrictions may be introduced at short notice. We hope that the Government will provide businesses and workers with the broad assurances of ongoing support, particularly now that the Government has a range of established measures it can adapt quickly in response to changing circumstances.

Link to this item · Read this item

Recommendation 19

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
As more of the population is vaccinated, the Government must shift its policy- making approach from reacting to rapidly changing circumstances towards long-term considerations. In his Budget, the Chancellor must give businesses and workers the security and certainty they need by extending the existing package of measures and committing to phasing them out only when the easing of health restrictions allows. To address the issue of debt affordability for businesses, the Government should also consider whether converting certain existing businesses’ COVID loan debt into grants, could provide an appropriate long-term solution. We also recommend that the Government sets out a clear strategy for business recovery, which addresses the challenges faced by many sectors which will not be able to re-open as early as others.

Link to this item · Read this item

Recommendation 20

Recommendation · Second Report - The impact of Coronavirus on businesses and workers: interim pre-Budget report · Addressed to Department for Business and Trade

Recommended (the committee's words)
We welcome the strong level of engagement between the Government and business in the early months of the pandemic. The Government must be as open with the business sector as possible, particularly by providing reasonable notice and 24 The impact of Coronavirus on businesses and workers: interim pre-Budget report detail of impending changes to health and business restrictions, and working as constructively as it did in spring and summer 2020 to develop comprehensive and practical guidance on how businesses should adapt to changing health measures. We recommend that the Government proactively engages with businesses and trade union leaders on an on-going basis, to ensure feedback is built into Government policy-making as we recover from the economic consequences of the pandemic.

Link to this item · Read this item

Reports

1 report

Oral evidence sessions

8 sessions

On smaller screens, scroll horizontally to read every column. Keyboard users can focus the table region and use the arrow keys.

Date Session and witnesses Source
13 Jul 2021
Impact of Covid 19; Downstream Oil Resilience Bill
Ghislaine Halpenny · British Property Federation, Helen Dickinson OBE · British Retail Consortium, Kate Nicholls OBE · UKHospitality, Mark Prouse · Department for Business, Energy and Industrial Strategy, Paul Stevens · Chatham House, Peter Davidson · Tank Storage Association 		View ↗
2 Feb 2021
Oral evidence session; oral evidence session
Chris O'Shea · Centrica, Justin Bowden · GMB Union, Matthew Taylor · Good Work Review, Mike Brewer · Resolution Foundation, Rob Joyce · Institute for Fiscal Studies, Tim Sharp · Trades Union Congress (TUC) 		View ↗
17 Nov 2020
Impact on businesses; Impact on workers
Dr Sonali Joshi · ExcludedUK, Helen Dickinson OBE · British Retail Consortium, Henry Chango Lopez · Independent Workers Union of Great Britain, Humphrey Cobbold · PureGym, Kate Nicholls · UKHospitality, Mike Brewer · Resolution Foundation, Mike Cherry OBE · Federation of Small Businesses, Paul Fleming · Equity, Ralph Findlay · Marston's PLC, Tony Dale · Union of Shop, Distributive and Allied Workers 		View ↗
18 Jun 2020
Issues facing the workforce
Christine Payne · Equity, Gary Smith · GMB Scotland, Mike Clancy · Prospect, Steve Turner · Unite, Tony Dale · Union of Shop, Distributive and Allied Workers 		View ↗
4 Jun 2020
Manufacturing; Electricity and gas supply
Audrey Gallacher · Energy UK, Fintan Slye · National Grid ESO, Gareth Stace · UK Steel, Gillian Cooper · Citizens Advice, Jonathan Brearley · Ofgem, Mike Hawes · Society of Motor Manufacturers and Traders, Paul Everitt · ADS Group, Paul Everitt · ADS, Stephen Phipson CBE · Make UK 		View ↗
14 May 2020
Coming out of lockdown; Oral Evidence
Dr Adam Kucharski, Paul Nowak · Trades Union Congress, Professor David Heymann, Sue Davies · Which?, Tej Parikh · Institute of Directors 		View ↗
30 Apr 2020
The impact of Coronavirus on businesses and workers
Adam Marshall · British Chambers of Commerce, Andrew Goodacre · The British Independent Retailers Association, Helen Dickinson OBE · British Retail Consortium, Martin McTague · Federation of Small Businesses, Melanie Leech CBE · British Property Federation, Philip King · Department for Business, Energy and Industrial Strategy 		View ↗
17 Mar 2020
Oral evidence session
Alasdair Hutchison · Association of Independent Professionals and the Self-employed, Martin McTague · Federation of Small Businesses, Paul Nowak · Trades Union Congress, Rain Newton-Smith · Confederation of British Industry 		View ↗

Who gave evidence

45 witnesses

On smaller screens, scroll horizontally to read every column. Keyboard users can focus the table region and use the arrow keys.

WitnessOrganisationSessions
Helen Dickinson OBE · Chief Executive Officer British Retail Consortium 3
Martin McTague · National Vice Chair Federation of Small Businesses 2
Mike Brewer · Deputy Chief Executive Resolution Foundation 2
Paul Nowak · Deputy General Secretary Trades Union Congress 2
Tony Dale · Head of Research Union of Shop, Distributive and Allied Workers 2
Adam Marshall · Director General British Chambers of Commerce 1
Alasdair Hutchison · Policy Development Manager Association of Independent Professionals and the Self-employed 1
Andrew Goodacre · CEO The British Independent Retailers Association 1
Audrey Gallacher · Interim CEO and Director of Policy Energy UK 1
Chris O'Shea · Chief Executive Officer Centrica 1
Christine Payne · General Secretary Equity 1
Dr Adam Kucharski Not recorded 1
Dr Sonali Joshi · Founder and Director of Policy and Communications ExcludedUK 1
Fintan Slye · Executive Director National Grid ESO 1
Gareth Stace · Director General UK Steel 1
Gary Smith · Secretary GMB Scotland 1
Ghislaine Halpenny · Director of Strategy and External Affairs British Property Federation 1
Gillian Cooper · Head of Energy Policy Citizens Advice 1
Henry Chango Lopez · General Secretary Independent Workers Union of Great Britain 1
Humphrey Cobbold · Chief Executive PureGym 1
Jonathan Brearley · Chief Executive Ofgem 1
Justin Bowden · National Officer GMB Union 1
Kate Nicholls · Chief Executive UKHospitality 1
Kate Nicholls OBE · Chief Executive UKHospitality 1
Mark Prouse · Deputy Director Department for Business, Energy and Industrial Strategy 1
Matthew Taylor · Chair Good Work Review 1
Melanie Leech CBE · CEO British Property Federation 1
Mike Cherry OBE · National Chair Federation of Small Businesses 1
Mike Clancy · General Secretary Prospect 1
Mike Hawes · Chief Executive Society of Motor Manufacturers and Traders 1
Paul Everitt · Chief Executive ADS Group 1
Paul Everitt · Chief Executive ADS 1
Paul Fleming · General Secretary Equity 1
Paul Stevens · Distinguished Fellow Chatham House 1
Peter Davidson · Executive Director Tank Storage Association 1
Philip King · Interim Small Business Commissioner Department for Business, Energy and Industrial Strategy 1
Professor David Heymann Not recorded 1
Rain Newton-Smith · Chief Economist Confederation of British Industry 1
Ralph Findlay · Chief Executive Marston's PLC 1
Rob Joyce · Deputy Director Institute for Fiscal Studies 1
Stephen Phipson CBE · Chief Executive Officer Make UK 1
Steve Turner · Assistant General Secretary Unite 1
Sue Davies · Head of Consumer Rights and Food Policy Which? 1
Tej Parikh · Chief Economist Institute of Directors 1
Tim Sharp · Senior Employment Rights Officer Trades Union Congress (TUC) 1

Correspondence

58 letters

On smaller screens, scroll horizontally to read every column. Keyboard users can focus the table region and use the arrow keys.

PublishedDirectionLetter
9 Feb 2022 To committee Letter from the Secretary of State on estimates of fraud and error in Covid-19 Support Schemes
25 Jan 2022 To committee Letter from the Chair to the Secretary of State on Covid-19 support schemes
13 Jan 2022 To committee Letter from the Secretary of State on support for businesses impacted by the spread of Omicron varient
16 Dec 2021 To committee Letter from the Chair to the Secretary of State on financial support for businesses and workers
16 Mar 2021 To committee Letter from the Secretary of State to the Chair regarding Covid passports and employment
4 Mar 2021 To committee Letter from the Chair to the Secretary of State regarding COVID passports and employment
4 Feb 2021 To committee Letter from the Chair to the GMB Union regarding the evidence session on 2 February 2021
4 Feb 2021 To committee Letter from the Chair to Centrica regarding the evidence session on 2 February 2021
14 Jan 2021 To committee Letter from We Make Events to the Chair on businesses excluded from Government support
16 Dec 2020 To committee Letter from the Secretary of State to the Chair on the impact of tiered restrictions and nationwide lockdowns
20 Nov 2020 From committee Letter to the Secretary of State on impact of Covid on business workers
23 Oct 2020 To committee Letter from the Minister to the Chair on the publication of loan-level information for CBILS and CLBILS
25 Sep 2020 To committee Letter from the Secretary of State in response to the Chairs letter on the impact of coronavirus on businesses and workers
29 Jul 2020 Not recorded Chair to Secretary of State on impact of Covid-19 on workers and businesses
19 Jun 2020 To committee Letter from the Chair to the Minister on automotive support
18 Jun 2020 To committee Letter from the Hair and Beauty sector on the safe re-opening of hair and beauty salons
12 Jun 2020 To committee Letter from Chair to Secretary of State on manufacturing
19 May 2020 To committee Letter from the Small Business Commissioner on additional points to oral evidence given on 30 April
19 May 2020 To committee Letter from Chair to Secretary of State on exiting lockdown and the safety of employers, workers and consumers
1 May 2020 To committee Letter from British Marine on the impact of coronavirus on marine businesses
23 Apr 2020 To committee Letter from The Range on working practices
23 Apr 2020 To committee Letter from Secretary of State on coronavirus support for employers and workers
23 Apr 2020 To committee Letter from Secretary of State on CLBILS
16 Apr 2020 To committee Letter from DPD on supporting employees
16 Apr 2020 To committee Letter from Barclays on supporting employees
16 Apr 2020 To committee Letter from the Secretary of State for BEIS on reforms to help businesses
16 Apr 2020 To committee Letter from the Secretary of State for BEIS on CBILS
16 Apr 2020 To committee Letter from Grant Thornton dated 3 April 2020
16 Apr 2020 To committee Letter from Hermes dated 3 April 2020
9 Apr 2020 To committee Letter from Teleperformance
2 Apr 2020 To committee Letter from Wetherspoons dated 30 March
2 Apr 2020 To committee Letter from IWG
2 Apr 2020 To committee Letter from FCSA
2 Apr 2020 To committee Letter from Concentrix
2 Apr 2020 To committee Letter from Sky
2 Apr 2020 To committee Letter from Sainsbury's
2 Apr 2020 To committee Letter from John Lewis
2 Apr 2020 To committee Letter from Uber
2 Apr 2020 To committee Letter from BT
1 Apr 2020 To committee Letter from Chair to Grant Thornton (Brighthouse)
31 Mar 2020 To committee Letter from Chair to Chancellor on CBILS
31 Mar 2020 To committee Open letter from Chair on coronavirus - public responses
31 Mar 2020 To committee Letter from Wetherspoons dated 26 March
31 Mar 2020 From committee Letter to Wetherspoons on late payment
31 Mar 2020 To committee Letter from Newcastle United
31 Mar 2020 To committee Letter from Sky
31 Mar 2020 Not recorded Email from LV
31 Mar 2020 To committee Letter from Sports Direct
31 Mar 2020 Not recorded Selection of emails from the public on businesses during Covid-19
30 Mar 2020 Not recorded Submissions from workers and businesses
30 Mar 2020 To committee Open letter from Chair on coronavirus
30 Mar 2020 To committee Letter from Chair to Chancellor on Covid-19 and childcare
28 Mar 2020 To committee Letter from Dexter's on response to Covid-19 dated 27 March 2020
26 Mar 2020 Not recorded Emails from the public on businesses response to Covid19 dates 24-25 March 2020
25 Mar 2020 From committee Letter to Sports Direct
25 Mar 2020 From committee Letter to Wetherspoons
25 Mar 2020 From committee Letter to Secretary of State on workplace guidance
24 Mar 2020 To committee Letter from the Secretary of State on coronovirus business interruption loan scheme dated 23 March 2020