MPs have said the Chancellor has “effectively drawn a line” under helping more than a million people excluded by Government support packages in the face of the coronavirus pandemic.

The chair of the Treasury Committee, Mel Stride, issued the warning after Rishi Sunak defended the parameters of the current financial support.

Last week, the committee published its interim report into gaps in state support to firms and workers affected by the virus.

It stressed that more than a million people have not received support from the Government and called on it to “do whatever it takes” to protect people and businesses.

However, the Chancellor has now defended the current system of business loans and job retention schemes after reading the committee’s initial findings.

Despite stating that he will not pick winners and losers when it comes to sectors and businesses that need support, the Chancellor has done this when it comes to households and individuals

In a letter, Mr Sunak admitted to MPs on the committee that it “is correct that some people have not been eligible” for furlough or self-employment scheme funding, while others, such as PAYE freelancers, do not have a specific scheme.

However, he said that these “were the right policies for the first phase of the crisis”.

Mr Sunak also stressed that the Treasury was unable to allow returns for the 2019-20 tax year to be used by people to secure self-employment support (SEISS) as that would create an opportunity for an “organised criminal gang to file fake or misleading returns to claim the grant”.

In response, Mel Stride said: “The Chancellor has effectively drawn a line under helping the million-plus people who have been excluded from support for four months.

“Despite stating that he will not pick winners and losers when it comes to sectors and businesses that need support, the Chancellor has done this when it comes to households and individuals.

“The Chancellor said that the schemes were designed to be open and accessible to as many people as possible, but the committee remains to be convinced that more people could not have been helped.

“The Chancellor initially told those at risk of losing their livelihoods that they would not be forgotten.

“While the Government is clear that it is moving on to the next phase of its recovery plan, it cannot just turn its back on those who are suffering.

“The committee urges the Government to re-think its position.”

Andy Chamberlain, director of policy at IPSE (the Association of Independent Professionals and the Self-Employed), said: “It is deeply disappointing that the Government has not seen fit to do more in response to the Treasury Select Committee report.

“Although we appreciate the Government ‘carefully considering’ our proposal to support directors of limited companies with a pay now, claw back later policy, we do not think its response is enough.

“The response claims this approach would be too ‘resource intensive’ and that including the newly self-employed in SEISS would involve too much of a risk of ‘fraudulent activity’.

“To this we would say that limited company freelancers, the newly self-employed and other excluded groups have suffered enough that the Government should commit those resources and take those risks to protect these people.”