Covid inquiry hears impact on firms and staff

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

Business owners said they were brought to tears when they were forced to either lay off staff or close the store entirely, and employees described how they feared for their jobs.

Comments were included in 8,000 public submissions. as the third phase of the investigation focuses on measures taken to support workers' incomes and keep businesses afloat during the pandemic.

According to the Treasury, £140 billion was spent on supporting businesses, much of which went towards paying people's wages while they were forced to stay at home.

The inquiry heard that on his first day as Chancellor in 2020, Rishi Sunak was given a briefing on the impact of the Covid outbreak on economic growth and financial stability.

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

Sunak is among those facing the inquiry, with Bank of England governor Andrew Bailey also giving evidence in the coming weeks.

Monday's session opened with emotional video testimonies from business owners and freelancers whose livelihoods were disrupted when Covid lockdowns began.

In the video, Lowry, a freelance event planner, explained how she fell into despair when her income dried up and her freelance work disappeared. She fought back tears, explaining that she had no right to support. She had a mortgage and a baby at home and “had no savings.”

Last week a report was published on the second phase of the investigation into policy making. found the government had done 'too little, too late'.

The current module, which is expected to run until Christmas, will focus on the unprecedented economic intervention deployed since 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 £70 billion.

It paid a portion of employees' wages to ensure they retained income even if they couldn't go to work and to keep businesses open so they could reopen later.

There was also a support scheme for self-employed people, business lending schemes and reduced business rates.

Questions have been raised about the extent of financial support, the strength of protections against fraud and error, and whether it is delaying people taking up new work roles.

In the investigation, employees told him how they feared they would lose their jobs and faced difficulties paying bills during the pandemic, with some not receiving holiday pay after being laid off.

However, others said their careers had been saved by the furlough scheme, while some business owners said they had been saved by government support schemes and saved from having to make redundancies.

As part of the materials, the owner of a small retail store told the investigation: “One terrible day I had to call 80% of my employees and tell them that we had to lay them off because there was no more work for them.

“And I cried, I didn’t sleep all night, I was so, so upset. I've had people who 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 don't have a business.”

Describing the failings of the furlough scheme, one Northern Ireland worker said her husband lost his job in the run-up to the end of the scheme. “Then he was extended, but he was already released,” she said.

Sunak's Eat Out to Help Out scheme has divided opinion among leaders.

“When we reopened, it helped bring people back to the pubs and helped us increase our profits,” said the finance director of a major English food and drink firm.

But an operations manager for a tourism and hospitality firm in Wales said: “In hindsight, we can see that was probably the wrong thing to do, given where we were with the pandemic.”

The Covid inquiry, chaired by Baroness Hallett, is expected to look at a total of 10 areas and provide lessons for the management of future pandemics.

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

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

Also facing investigation are:

• Former Treasury officials James Benford and Dan York-Smith
• Representatives of charities Child Poverty Action Group, Long Covid Support and Disability UK
• Former Downing Street special adviser Ben Warner
• Former Director General of Covid-19 Task Force Analysis Robert Harrison.

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

“I think we need to look at decisions made through that lens.

“But it is important that the lessons [are] learned so we can be better prepared if another pandemic ever happens.”