Covid-19: Financial Support

Manuela Perteghella Excerpts

Thursday 15th January 2026 Commons Chamber

[[R] Manuela Perteghella (Stratford-on-Avon) (LD)]

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.

[Chris Vince (Harlow) (Lab/Co-op)]

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?

[Manuela Perteghella]

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.

The problem was not the absence of data, but the choice made about how that data would be used. Company directors paid through dividends were told that their income could not be verified, despite their submitting annual self-assessments, corporation tax returns and company accounts to Companies House. New businesses were excluded simply because they had not traded for long enough. Mixed-income workers were penalised for having diversified their earnings. These people were not invisible to the tax system, but they were invisible to the support schemes. The decision to exclude them was not an administrative necessity; it was a policy decision, and for that alone, the 3.8 million people left out must have an apology.

These decisions are now rightly being examined by the UK covid-19 inquiry. Module 9, which focuses on the economic response, is considering how eligibility criteria were set, how fraud risk was assessed and how trade-offs were made between speed and fairness. That scrutiny is essential, because the consequences of exclusion were not abstract; they were human, financial and, in many cases, long-lasting. The inquiry must not simply catalogue what happened, but confront what it meant for those left outside the system.

[Claire Young (Thornbury and Yate) (LD)]

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?

[Manuela Perteghella]

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.

This debate is not just about reflecting on what went wrong; it is about recognising and acknowledging the injustice, starting with an apology to the nearly 4 million workers who were abandoned under the Conservative Government. We also must prepare properly for the future. Public health experts have been clear that we should be talking about not if, but when, there is a future pandemic or national emergency. When the moment comes, this House will have a responsibility to ensure that no one slips through the gaps again.

Emergency support schemes must be designed around the reality of how people work in this country. Millions of people do not fit neatly into a single employment category. They combine PAYE work with self-employment, run a small limited company, take time out for caring responsibilities or build new businesses from scratch. That diversity is a strength of our economy, not a problem to be designed out of eligibility. The state already holds vast amounts of information through His Majesty’s Revenue and Customs, Companies House and other bodies. The lesson of covid is that the issue was not a lack of data, but a lack of willingness to use it flexibly and fairly.

[Matt Turmaine (Watford) (Lab)]

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?

--- Later in debate ---

[Manuela Perteghella]

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.

[Several hon. Members rose—]

--- Later in debate ---

[Manuela Perteghella (Stratford-on-Avon) (LD)]

I am grateful to all hon. Members who attended today’s debate to support their constituents. The people we have talked about today ask not for special treatment, but for fair and equitable treatment. They paid in and followed the rules, but when the crisis came, they were left behind, with heartbreaking consequences. I hope that the Minister will meet the APPG in the near future.

In conclusion, if we are serious about learning the lessons of the pandemic, recognition, redress, accountability and change must follow. Otherwise, the next time a crisis strikes, we risk repeating the same injustice.

Question put and agreed to.

Resolved,

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

Business of the House

Ordered,

That notices of Amendments, new Clauses and new Schedules to be moved in Committee in respect of the Medical Training (Prioritisation) Bill may be accepted by the Clerks at the Table before it has been read a second time.—(Nesil Caliskan.)