Covid Inquiry to probe furlough and business loans

The third stage of the Covid-19 Inquiry begins hearing evidence on Monday focusing on the measures taken to support workers’ incomes and keep businesses afloat when the pandemic struck.

It will focus on what action the UK government, devolved administrations in Scotland, Wales and Northern Ireland, and local authorities took, how well schemes were designed and what was done to minimise fraud and waste.

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.

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

This next 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, paying 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.

At the time there was widespread praise for the prompt roll-out of support, especially in the travel and hospitality sectors where businesses were shuttered overnight.

But questions were also raised over the scale of the programme, the strength of safeguards against fraud and error, and whether it delayed people taking up new work roles.

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.

However, this part of the inquiry will not look at how the pandemic affected the economy as a whole.

Baroness Coffey, the former work and pensions secretary, is due to appear on Wednesday, as well as Will Quince, the former welfare delivery minister.

The first item on Monday will be an impact film featuring personal testimony from people affected, and opening submissions from lawyers for the inquiry itself and core participants.

Labour market expert Mike Brewer, one of five experts commissioned to write reports on different aspects of the governments’ economic policy response, will be the first witness to give evidence on Tuesday morning.

Also appearing 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.

Rishi Sunak, who was chancellor of the exchequer during the pandemic, has confirmed that he will appear in a couple of weeks’ time.

On Friday, he told Matt Chorley’s programme on BBC Radio 5 Live that 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.”

Last week the inquiry published a highly critical report on core decision-making during the pandemic, which described a “toxic and chaotic” culture at the centre of the UK government.

Michael Gove, who was a cabinet minister at the time, told BBC Radio 4’s Today programme he wanted to “apologise to all those who lost loved ones during the pandemic – and to many others who made huge sacrifices”.

The public hearings for this section of the inquiry – known as Module 9 – are scheduled to run for four weeks, ending on 18 December.