Furlough support should be extended to help firms likely to survive the Covid-19 crisis as viable businesses.
MPs have urged Rishi Sunak to target companies that are still viable when the existing scheme ends in October.
The Treasury committee called for the chancellor to “carefully consider” targeted extensions to the Coronavirus Job Retention Scheme (CJRS).
“Effectively targeted assistance to those who need it is important,” the committee recommended.
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“The chancellor should carefully consider whether a targeted extension of the Coronavirus Job Retention Scheme and/or other targeted support measures might be required and explain his conclusions.”
The furlough scheme has protected 9.6 million jobs at a cost of £35 billion.
The committee added: “The Eat Out to Help Out Scheme has ended, and the continued VAT cut on hospitality and leisure may not be enough to encourage consumers to continue to spend.
“The chancellor needs to consider whether additional measures to stimulate consumption are warranted.”
Mel Stride MP, chair of the Treasury committee, said: “The committee’s disappointment that the government did not implement our recommendations to help those who have fallen through the gaps in support persists. Our second report of the inquiry focuses on emerging challenges as lockdown measures are lifted.
“One such challenge is to target assistance effectively at those businesses and individuals who need it. The chancellor should carefully consider targeted extensions to the Coronavirus Job Retention Scheme and explain his conclusions.
“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy.
“This requires a very difficult set of judgements; it is where careful analysis and creative thinking will be critical.
“As the committee has said throughout the crisis, the chancellor must continue to show flexibility in his approach.
“We hope that the Treasury’s unwillingness to implement the recommendations from our first report is not a sign of how it will respond to this one.”
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