Covid inquiry hears impact on firms and staff

Workers and business leaders have told the Covid-19 inquiry about the devastation they faced during the pandemic and the difficulties they faced accessing support.

Business owners described breaking into tears as they were forced either to lay off staff or shut up shop entirely, while employees told how they feared for their jobs.

The comments were included in 8,000 submissions from the public, and come as the third stage of the inquiry focuses on the measures taken to support workers’ incomes and keep businesses afloat when the pandemic struck.

According to the Treasury, £140bn was spent on support for businesses, much of it going to pay people’s wages when they were forced to stay at home.

The inquiry heard how, on his first day as chancellor in 2020, Rishi Sunak was presented with a briefing on the impact of the Covid outbreak on growth and financial stability.

Two months later, the Treasury concluded the economy was “in hibernation”, with the sharpest fall in output for nearly 100 years.

Sunak is one of the people who will appear before the inquiry, and Bank of England governor Andrew Bailey will also give evidence in the coming weeks.

Monday’s session opened with emotional video testimony from business owners and freelancers whose livelihoods were upended when Covid lockdowns started.

In the video, Lowri, an events freelancer, explained how she had become desperate as her income stopped and her freelance work vanished. She fought back tears as she explained she qualified for no support. She had a mortgage and a child at home, with “no savings” for back up.

Last week the report on the second phase of the inquiry, into political decision-making, found the government had done “too little, too late”.

The current module, expected to last until just before Christmas, will examine the unprecedented economic intervention rolled out when the first lockdown was announced in March 2020.

The largest scheme, the Coronavirus Job Retention Scheme, known as furlough, covered 11.7 million jobs between March 2020 and September 2021, at a cost of £70bn.

It paid a portion of employees’ wages to ensure they still had an income even if they could not go to work, and to keep businesses going so that they could reopen later.

There was also a support scheme for self-employed people, loan schemes for businesses and business rates relief.

Questions were raised over the scale of the financial support, the strength of safeguards against fraud and error, and whether it delayed people taking up new work roles.

In submissions to the inquiry, employees told the inquiry how they were worried of losing their jobs and faced a scramble to pay bills through the pandemic, with some missing out on furlough payments after being made redundant.

However, others said their careers were rescued by the furlough programme, while some business owners said they were saved by government support schemes and spared having to make redundancies.

As part of the submissions, the owner of a small retailer told the inquiry: “One awful day, I had to call 80% of my staff and tell them that we had to make them redundant because there was no job for them anymore.

“And I cried, I didn’t sleep all night, I was so, so, upset. I had people that had worked for me for seven, eight years, that I had to say, ‘I’m so sorry, I literally can’t afford to pay you anymore because we’ve got no business’.”

Describing flaws in the furlough system, one Northern Irish contributor said her husband lost his job in the run-up to the scheme coming to an end. “It then got extended, but he’d already been let go,” she said.

The Eat Out to Help Out scheme, which was introduced by Sunak, split opinion among bosses.

“When we reopened, it helped to get people back into the pub and it helped us increase our profits,” the finance director of a large English food and drinks firm said.

But an operations manager at a travel and hospitality firm in Wales said: “When we look back, it probably wasn’t the right thing to do, given where we were with the pandemic.”

The Covid Inquiry, chaired by Baroness Hallett, is expected to look at 10 areas in total, and provide lessons for managing future pandemics.

This phase of the inquiry will also look at the additional funding provided for public services such as the railways to keep them running during lockdowns, and support for the voluntary and community sector.

It will examine decisions on benefits, sick pay and support for vulnerable people.

Also appearing before the inquiry are:

• Former Treasury officials James Benford and Dan York-Smith
• Representatives of the charities Child Poverty Action Group, Long Covid Support and Disability UK
• Former Downing Street special adviser Ben Warner
• Former director general for analysis of the Covid-19 Taskforce, Robert Harrison.

Last week, Sunak told the BBC the government and scientific community were “operating in a highly uncertain environment”.

“I think we do need to view the decisions taken through that lens.

“But it’s important that lessons [are] learned so that we can be better prepared if there’s ever another pandemic.”