Boris Johnson's coronavirus response will help banks and landlords more than families, think tank warns

IPPR calls for ministers to consider measures including rent freezes

Boris Johnson’s response to the coronavirus crisis will help banks and landlords more than families, according to a think tank.

​The measures include a furlough scheme which pays workers 80 per cent of their wages, in a bid to prevent redundancies.

But almost half that money will be spent on rent and debt repayments, an analysis by the Institute for Public Policy Research (IPPR) found.

The support amounts to an “implicit bail-out” of landlords and banks in the middle of the global pandemic, the organisation claims.

IPPR also warns that overall the government's package of policies, designed to prevent an economic as well as a public health crisis, will increase inequality across the country.

Well-off families still able to work are likely to be spending less and saving more during the pandemic, while furloughed low-income families build up further debt.

Mr Johnson has faced criticism this week that changes to the UK’s lockdown rules to encourage more people back to work will put the poorest in society most at risk.

Lower paid workers will be under more pressure to return to jobs in which they are more likely to risk coming into contact with coronavirus, critics claim.

According to the IPPR report, up to 45 per cent of the furlough scheme's funds, an estimated £10billion over three months, will be spent on rent and debt repayments to landlords, banks and other lenders.

At the same time households in the second highest income tier could be saving an extra £189 per week on average, it estimates.

The report also warns it will take longer for the economy to recover if many families emerge from the crisis with large debts and less money to spend.

The report warns: “Without steps to actively redress these inequalities and to ensure the risks of the crisis are fairly shared, the UK’s economic recovery is likely to be slow, uneven and unfair, worsening existing structural imbalances.”

The IPPR today calls for a series of measures to ensure banks, landlords and the more affluent take a larger share of the burden.

These include exploring the possibility of a freeze on rent, debts and bills for some badly affected households.

The report also calls on the government to consider a ban on dividends, to prevent ministers indirectly subsidising company shareholders.

Carys Roberts, IPPR’s executive director, said: “IPPR’s research finds that while millions of people across the country are seeing a hit to their incomes, the government is under-writing the income of banks and landlords without any obligation to take a similar hit. That amounts to an implicit bailout.

“We mustn’t repeat the mistakes of previous crises, by asking those least able to weather the crisis to make the greatest sacrifices. The economic risks and costs of the shutdown should be shared fairly across society.

“The government must urgently ensure that its programme of support is protecting those who need it. And as we emerge from this crisis, it will be critically important to rebuild a fairer economy, with those whose incomes have been protected contributing more.”