Writing off billions of pounds of government loans to help struggling small businesses during the coronavirus downturn would be “sub-optimal”, an economics expert has told MPs, as it could encourage others to take out further loans that they think they will not have to repay.

Speaking before the a parliamentary panel on 9 June, Torsten Bell, the chief executive of the Resolution Foundation economic think-tank, said the “danger” was a “lack of clarity” over what the government expects from businesses in terms of paying the loans back.