Treasury Committee publishes Government response to second economic impact of coronavirus report
20 November 2020
The Treasury Committee has published responses from the Government and the Bank of England to its report on the economic impact of coronavirus.
- Read the Government Response: Economic impact of coronavirus: the challenges of recovery: Government Response to the Committee’s Eighth Report of Session 2019–21
- Inquiry: Economic Impact of Coronavirus
- Treasury Committee
The Committee published the second report of its inquiry into the economic impact of coronavirus called Challenges of Recovery on 11 September 2020. Its conclusions included:
- Chancellor should carefully consider targeted extensions to Coronavirus Job Retention Scheme
- Government must outline plan for viable SMEs struggling with debt to recapitalise their balance sheets to prevent prolonging the recession
- Government should consider extending the current increased generosity and accessibility of Universal Credit beyond deadline
- Chancellor should set out roadmap for placing Government finances on sustainable footing
- Clear definition and objectives of “levelling up” agenda needed
Commenting on the response, Rt Hon. Mel Stride MP, Chair of the Treasury Committee, said:
“Whilst many things have changed since we published our report in September, including the development of vaccines, many of our recommendations remain.
“The end date for the Job Retention Scheme has been pushed back by up to five months, but the case remains that the Chancellor should carefully consider targeted support to sectors hardest hit by the restrictions put in place to combat coronavirus.
“The response states that accredited lenders, not Government, are best placed to support borrowers to repay Government-guaranteed loans. However, the Committee is concerned that there may be a lack of capacity and willingness on the part of the private sector to step in to provide solutions for corporate indebtedness.
“There remains a possibility of corporate indebtedness prolonging the downturn and causing economic scarring.
“We welcome the Government’s emphasis on ‘levelling up’ the economy. But the slogan is still yet to be defined. The Government should publish a strategy underpinning it, including clear objectives and indicators.
“The Committee has consistently called for HM Treasury to publish the full analysis it has carried out on the Government’s coronavirus interventions, including the second lockdown, and is disappointed that this has not been provided.
“To ensure that MPs have all the information possible available to them to allow them to carry out their duty of effectively scrutinising Government measures, we again urge HM Treasury to publish both previous and future economic analysis.
“The Committee’s disappointment that the Government did not implement the recommendations from our first report to help those who have fallen through the gaps of support, including limited company directors, freelancers and the newly self-employed, persists. The Government must act to mitigate these significant gaps in support.”
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