The UK Covid-19 Inquiry has begun hearing from businesses, workers and the self-employed, as it turns to examining the government’s economic response to the pandemic.
The four week stage of the Covid inquiry will hear from witnesses including Rishi Sunak, who was chancellor at the time, and announced the many schemes the government created to support businesses, workers and freelancers.
The Treasury said around £140bn was spent on business support during the pandemic. That included £70bn on the Coronavirus Job Retention Scheme, known as furlough.
Alongside this stage of the Covid inquiry, which runs until just before Christmas, is the publication of the latest report from ‘Every Story Matters’, a large scale public engagement exercise which heard 58,000 stories.
The latest record draws on over 8,000 of them, including business owners who relate how the schemes helped, but also the stress of having to make staff redundant, struggling to fund their lives, losing savings and not being eligible for financial support.
The report says: “Incomes changed overnight, causing stress and uncertainty. Access to some goods and services stopped abruptly while, for others, new business opportunities opened up. Service providers working in charities had to pivot their model to ensure they could keep providing for people in need.
“Business owners with responsibility for employees were uncertain about what the next week would bring. People were put on furlough, which represented a safety net for some; for others it denied a sense of purpose. Some people are still feeling the impact of the economic response to this day.”
In a press statement, the UK Covid-19 Inquiry said:
The record reveals that for some, help felt inaccessible, like they were being passed “from pillar to post”. Others felt that the measures put in place “saved” their careers and provided peace of mind during an extremely stressful and deeply uncertain period. The record sets out a wide range of candid experiences including:
- Intense and sometimes prolonged feelings of shock, anxiety and uncertainty about work and finances at the beginning of the pandemic, due to business and organisations closing with very short-notice which caused immediate disruption to income.
- Financial hardship for those on Universal Credit but also those who were financially comfortable prior to the pandemic and saw their incomes heavily reduced due to insufficient support. Often individuals struggled to afford essentials and relied on food banks, charities, taking on debt or using personal savings.
- Challenges faced by business owners who were required to adapt quickly to remote working. Those who were unable to adapt faced the possibility of significant financial losses, the emotional toll of having to make staff redundant or having to close their business altogether.
- Delays in receiving financial support or difficulties in accessing support at all, especially for the self-employed or those on zero-hours contracts. This caused financial strain, increasing stress and anxiety for those waiting for support, particularly when contributors had no income while they waited to see if they were eligible.
- Positive stories of economic support easing anxiety and in some cases giving people the opportunity to adapt and upskill.
- Longer term economic impacts, including reduced hours, job losses and a competitive job market. This led to extended unemployment and severe financial hardship for many.
- Many younger people leaving full-time education found it difficult to find work, highlighting that this had long-term impacts on their career prospects.
A selection of quotes gathered by the UK Covid-19 Inquiry from business owners and freelancers on the impact of the Covid-19 pandemic
Self-employed person, England: “I literally had nothing. No income at all. As soon as we were locked in or locked down, whatever way you put it, my income stopped that day, literally. All the jobs I had booked in previously were literally cancelled by my customers. Suddenly had no income, but the same bills.”
Manager of a medium manufacturing business, England: “Covid has hit in more ways that we can maybe be able to recover from in two years. You know, the consumer’s buying differently, they’re buying lower cost items. We’ve now had to change, you know, our whole stance as to what price brackets we’re now selling to each customer at etc. So, everything has changed.”
Manager of a small consumer retail business, England: “We lost about £100,000 and that was even with making redundancies, and we are where we are now. It’s just never recovered.”
Owner of a small consumer retail business, England: “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.”
Leader of a charity, Scotland: “I remember seeing some funds and thinking, ‘Why aren’t we eligible for that?’ Just because we’ve got reserves we’re being penalised, and actually we’ve made an effort to make sure we’ve got reserves and all those kind of things. Some staff felt very strongly about the crisis grants, that we should have got it.
Sole trader running a consumer and retail business in Northern Ireland: “It gave me the opportunity to slow down and do some planning and I actually did renovations to my studio. I was able to get the Bounce Back Loan. It was something I never could have done whilst I had to be open every week doing shoots, so, it was actually quite a positive impact.”
Self-employed person, Wales: “I think anyone that was self-employed was absolutely, for a while, left very much to their own devices.”
Self-employed person, Wales: “I was, at the time, and still mostly am, a freelancer, self-employed performer, musician and technician…for live events and occasions. And I was on tour with [the] Circus. As both freelancers working in the live event industry, we both were unemployed, largely. In some circumstances people were just working from home and all that, there wasn’t really an option for us.”
Owner of a small travel and hospitality business in Wales: “It was nowhere near enough for what the businesses needed and I think it was a little bit unfair at the time when we were, sort of, a medium-sized business and we employed at the time [of the pandemic] nearly 60, 70 people and then you had a stallholder in the market who was self-employed and on their own, but they were getting exactly the same money as we were getting.”
Self-employed person, Scotland: “I’ve got a limited company and I just take a very small salary out of that. I try and keep most of the money in the company. So, really the furlough that I got was obviously based on the wages I took but wasn’t a reflection of my income.”
Every Story Matters contributor, England: “I do believe the furlough scheme saved my career.”
Every Story Matters contributor, England: I think a fairer system of self-employment support that was not a cliff edge would have dramatically reduced the worry and upset to me.”
Owner of a medium sized logistics business, England: “The Business Interruption Loan [CBILS], basically, that gave us access to money to maintain the cash flow to pay for contracts, to pay for maintenance. You know, we’re renting and leasing certain equipment as well, so that basically, that’s what really kept the business afloat from a financial perspective.”
Chief Financial Officer of a medium sized manufacturing business, England: “For the leadership team there was relief that we had some money to pay bills and could continue to operate.”
Every Story Matters contributor, England: “I run a company that employs 10+ people, some were put on furlough, others carried on working from home. It was a very stressful time as big orders got cancelled and dried up. Furlough was a life saver and probably the most proactive thing the government did. We also got a Bounce Back Loan and local government grant, also really helpful.”
Self-employed person who was also working part-time for an employer, England: “I clean in a council sports centre, so that was shut. Literally came home from work one day, got a phone call, ‘Don’t bother coming back in’. Suddenly, it became very, very serious … it was an incredibly lonely experience, and frightening.
Self-employed person who was also working part-time for an employer, England: “Literally within about 2 hours of getting home, I got a call from my manager to say, ‘Everything is going to go on lockdown. You can’t come in. I don’t know what’s happening, just wait for a call’. And that was it. It really hit me then. The minute I put the phone down, I just burst into tears.”