Covid-19: Financial Support

I beg to move,

That this House has considered financial support for small businesses and individuals during the covid-19 pandemic.

I would like to thank the Backbench Business Committee for allowing us time to debate this important issue. I also thank colleagues across the House for their tremendous support when I applied for this debate and, in particular, my friend the hon. Member for Montgomeryshire and Glyndŵr (Steve Witherden), who is the chair of the all-party parliamentary group on gaps in covid-19 financial support, of which I am an officer.

I place on record my thanks to Excluded UK for its tireless and formidable campaigning. Without its work, many of these stories would never have been heard, and many people would have been left to suffer in silence. Its staff have shown persistence, compassion, and a commitment to justice.

This debate is about a national scandal during the covid-19 pandemic, which impacted millions of individuals and families, including mine; my spouse could only apply for a bounce back loan when everything stopped. I want to speak about three things today: first, why I am campaigning on this issue; secondly, the people behind the statistics, including my constituents in Stratford-on-Avon who contacted me in desperation, and who still feel the horrendous impact of a policy decision by the then Government to exclude them from any kind of financial support; and thirdly, what needs to change.

When covid struck, the message from the Government was clear: “Help will be there, and no one will be left behind.” The Chancellor at the time, the right hon. Member for Richmond and Northallerton (Rishi Sunak), vowed that

“no one will be left without hope.”

For many, that was true, but for millions of others, the promise rang hollow. They paid in, they followed the rules, and when they needed support, they were told that they did not qualify. People lost their income overnight. They lost their savings and their home, and some lost their life.

I have a genuine question, because I have followed this campaign from afar. What were the reasons given by the Government at the time for these people being excluded in this way?

I thank the hon. Member, and I will get to that point. In Stratford-on-Avon and up and down the country, business owners ask a simple question: why were they excluded when they had paid tax for years? These were people running events businesses, training services or consultancies, freelancers in the arts, music or creative sectors, and small companies that formed the backbone of our local economy. That is the injustice that this debate seeks to address.

It is important to say at the outset that we do not deny the scale or urgency of the Government’s response in March 2020. The coronavirus job retention scheme and the self-employment income support scheme were introduced at a speed and on a scale never seen before. According to the House of Commons Library, the overall cost of covid-19 business support ran into tens of billions of pounds, and for many people and businesses it prevented immediate hardship and business collapse. That context matters, because it shows that the Government were capable of acting decisively, and that the state was capable of dealing with a suite of diverse and complex scenarios. The question is why, alongside that intervention, millions of people were left with nothing at all and simply abandoned.

Around 3.8 million UK taxpayers were excluded from meaningful financial support during the pandemic—a figure supported by analysis from His Majesty’s Revenue and Customs, the National Audit Office and research cited by the Library. They included company directors paid through dividends, newly self-employed people, new businesses, pay-as-you-earn freelancers, new starters, and those on maternity, adoption or parental leave or on carer’s allowance, whose circumstances placed them just outside rigid eligibility rules. They were a substantial part of the British workforce. The Government support schemes worked well for many, but excluded millions by design.

A 2021 University of Bristol report stated that women in their 40s with dependent children were disproportionately represented among the excluded. That raises concerns about child poverty, mental ill health and compounding the effects of the gender pay gap. Does my hon. Friend agree that research is needed into those and other longer- term impacts, so that they can be addressed?

Absolutely; I fully agree with my hon. Friend. In fact, that is one of our asks, so that we do not make the same mistake again.

My constituent Victoria, who is in the Gallery, ran an events business hosting exhibitions and award ceremonies. She was ineligible for any scheme. A bounce back loan was taken out simply for the business to survive. Five years on, the debt remains, the recovery never fully came, and the business is now closing. Another constituent of mine moved roles, and was informed that he would not be furloughed by his new employer, as the cut-off for furlough through payroll had passed. There was little consideration of people in that position.

Another constituent was a director of a small education consultancy. They were told that income as dividends could not be distinguished from unearned income, despite verified accounts and professional oversight. The effects of that decision did not end when lockdowns lifted. The financial impact of exclusion was severe, but the human cost was greater still. Campaign groups have documented widespread mental distress across those excluded from support, including cases of suicide linked to financial hardship during the pandemic. There were people who felt hopeless, abandoned and unseen. The mental health consequences of exclusion are still being felt, and they should weigh heavily on this House.

The excluded have three requests of this Government: an apology to the nearly 4 million workers who were abandoned; parity of support; and an acknowledgment of the loss of earnings and consequential losses. I ask the Minister to meet the all-party parliamentary group on gaps in covid-19 financial support, so that he can hear directly from those affected.

At the same time when millions of taxpayers were excluded from support, vast sums of public money were spent on dodgy personal protective equipment. The National Audit Office has confirmed that billions were lost through error and fraud across covid-19 schemes. The PPE MedPro case starkly illustrates that imbalance: a company fast-tracked through the Government VIP lane was paid £122 million for surgical gowns that were later ruled unfit for use, and has since been ordered to repay £148 million to the public purse.

I worked in health and social care during the covid pandemic, so I did not experience furlough—in fact, we worked very hard indeed. Some of the excluded self-employed people that the hon. Member refers to are still suffering today. Does she agree that they are paying the price for the previous Government’s sheer incompetence in managing the process?

I fully agree with the hon. Member. I hope that the new Labour Government will reflect on what went on, and will engage with all those who were excluded, so I look forward to the response from the Minister.

Next time, inclusion must be the starting point, not an afterthought.

Preparing for the future is not only about better scheme design; it is also about restoring trust in how public money is handled. During the pandemic, many legitimate taxpayers were denied support on the grounds of fraud risk while vast sums of public money were lost through waste, error and contracts awarded through so-called VIP lanes. The PPE Medpro case raises serious questions about how decisions were made and who benefited from them. While hard-working families and small businesses were pushed into debt and hardship, those connected to questionable contracts were fast-tracked and rewarded. Huge sums were handed out with little scrutiny and, in some cases, for equipment that put our brave doctors and nurses at risk, that could not even be used, or that ended up being incinerated. That imbalance matters because it corrodes trust.

If we fail to learn these lessons, we fail the very people who kept paying in even when they were left out. If we succeed, future emergency support can be fast, fair and trusted. That is what those who were excluded deserve, and that is what this House should commit to delivering.

Order. In the region of 10 Members wish to speak. If they restrict themselves to about five minutes each, I will probably get everybody in.

I thank my friend the hon. Member for Stratford-on-Avon (Manuela Perteghella) for securing this incredibly important and long-overdue debate, and for being such a strong voice for those excluded from covid-19 financial support.

The gaps in covid-19 financial support all-party parliamentary group, which I chair, currently has 77 cross- party members, which demonstrates the strength of feeling across the House and the desire to represent constituents affected by this issue. We have just heard a powerful case for acknowledging that approximately 3.8 million people were wholly or partially excluded from meaningful covid-19 financial support. Years later, many remain burdened by unimaginable debt, some disgusting smears, declining mental health and the loss of homes, businesses and livelihoods.

I was an advocate for some of these under-represented people in my previous role as the NASUWT national executive member for the six counties of north Wales. Supply teachers, with no contracted hours at all and no guaranteed work from day to day, even before the pandemic, were placed in a terrible position. In four of the north Wales counties I represented, a furlough-type payment was arranged. In two, Gwynedd and Ynys Môn, a furlough payment was not arranged. That cohort of workers went through incredibly difficult times. In any capacity, professional or otherwise, when we speak with people who cannot pay their rent or are in mortgage arrears, or when we hear young, hungry children crying in the background over the phone, it leaves a deep and lasting impression.

During the run-up to the 2024 general election, I met campaigners for ExcludedUK and learned that this situation was far bigger than supply teachers in two counties in north-west Wales; it affected millions of people across the country and in many different industries. One of those campaigners was Ken, a small business owner and now a constituent of mine. He remembers the right hon. Member for Richmond and Northallerton (Rishi Sunak) promising to the nation that no one would be left behind, and then the shock of finding himself with no support. Not only was he left without support for day-to-day living, but he had to shoulder the ongoing costs of keeping a business afloat. The pandemic brought much to a halt, but software licences, professional fees and other essential overheads did not stop.

I thank the hon. Member for Stratford-on-Avon (Manuela Perteghella) for securing the debate and the Backbench Business Committee for granting it.

There is no doubt that the hardship affecting families, businesses and communities as a result of covid-19 policies is ongoing. The depth of suffering is hard to read about. People have been pushed to their limits, mentally and financially, and have had to endure indignity and injustice through no fault of their own. I hope that we can now all agree that it should never have happened. It is something that we never want to see happen again.

The various Government financial support schemes that were set up helped many people, but for the forgotten businesses and individuals who, for one bureaucratic reason or another, were deemed ineligible, the situation was patently unfair and unjust. Some 3.8 million UK taxpayers were excluded from support, while the rest of the working population were paid to stay at home. Why were they excluded? The reasons were arbitrary. Financial support was not forthcoming if a person was newly self-employed, a PAYE freelancer, a director paid in dividends, starting a new job—the list goes on. The rules were random and confusing, and they pushed so many people into desperate situations.

Sadly, we should not have been surprised that that happened. Although some marvelled at the speedy roll-out of the Government’s schemes, the reality was that they were patchy, poorly thought out and full of gaps—of course they were. How could we ever expect to shut down our society and economy and be able to cover the gigantic financial cost of doing so while ensuring that every person was properly looked after? It was unrealistic —an unprecedented state intervention that was doomed to fail.

I totally agree with Members present who are pushing for assurances that that will never happen again, but if we cannot look back with honesty and clarity about what was done, we are doomed to make the same mistakes again. Lockdown was the mistake from which all that injustice and suffering flowed. It was an unknown and unevidenced imposition that should never have been inflicted upon the British people. Many experts predicted from the start that it would cause misery and, horrifically, cost hundreds of thousands of lives through unintended but very real collateral damage.

I thank the right hon. Member for her powerful speech. Our opinions on lockdown may differ, but does she agree that, had we not gone into lockdown, many more thousands of people would have lost their lives?

I do not believe the evidence proves that. We can look to other parts of the world where that was not the case.

This policy had unwavering and enthusiastic support from across the House, with just a few of us in this House —too few—raising valid concerns, but we were shut down. It should be obvious that some people cannot be damaged in the name of protecting others with interventions such as lockdowns that we do not even know will work. The moral mathematics never added up.

And now we must live with the consequences of what we did. We spent in the region of £400 billion on the covid-19 response—a vast sum that will be clawed back through increased taxation and hardship for generations to come. Of course, the Conservative party had to put up taxes to pay for that £400 billion, and it was voted for by pretty much every Member in the House. For me, such a statist, socialist intervention would never work, and that is proving to be the case.

Those businesses that did manage to survive after everything that was thrown at them in the name of covid are now having to face more gloom and doom from this socialist Government in charge of our country, with their two tax-rising Budgets and their removal of business rates relief without understanding it—

Order. The subject of the debate is financial support specifically during the covid pandemic. The right hon. Lady might want to make sure she stays within scope of that.

Thank you, Madam Deputy Speaker. I added on that sentence because I felt it was very relevant that those who did manage to survive the pandemic are now not surviving, because of the extra taxes that are being put upon them and the removal of business rates relief that was introduced during covid, and it seems that the Chancellor does not even know how that works. Those businesses are suffering twofold, because some of that covid benefit is now being removed. It is no wonder Labour MPs are being banned from pubs, as we see mass closures of pubs.

I simply ask that we examine the bigger picture. Those 3.8 million people who were excluded from financial support suffered a terrible injustice, but so too did those who received support, because lockdown took from everyone: children denied education; mothers forced to give birth alone; people suffering heart attacks, strokes and sepsis but too frightened to burden the NHS; bereaved families unable to mourn the dead—the list of injustices goes on and on. None of it should ever have happened. The costs were always going to be too high, and worse, there appears to be no evidence that lockdown prevented covid infections.

The covid inquiry recently made two incredible assertions. One was that lockdowns were harmful but should have started earlier, and the other was that the modelling should not have been used to justify major policy but simultaneously proved that 23,000 lives could have been saved. Finally, lockdown was, as Professor Sunetra Gupta from the University of Oxford said—