The Government is being urged to tackle a huge “class divide” exposed by the pandemic, with low paid workers bearing the brunt of the impact of the virus crisis, according to a new report.

The TUC called for urgent action after its research suggested “a tale of two pandemics.”

Low-income workers have had little or no option to work from home, no or low sick pay and reduced living standards, while better-off workers have enjoyed greater flexibility, financial stability and increased spending power, said the union organisation.

TUC general secretary, Frances O’Grady, told the PA news agency that the Government had been talking about its levelling up agenda, but asked: “Where’s the action?”

She said: “It is nothing if we don’t tackle living standards, increase sick pay and improve working conditions.

“People have had enough of clapping – they want action. If the Government really wants to improve local economies, it should do something about ending low pay.”

The TUC is calling for a permanent short-time, working scheme to replace furlough when it ends on September 30, amid fears of an increase in unemployment in sectors such as the arts and culture, food and hospitality.

Research by the TUC suggested that low-paid workers (those earning less than £15,000) are almost twice as likely as high-paid workers (those earning more than £50,000) to say they have cut back on spending since the pandemic began.

High earners are more than three times more likely than low-paid workers to expect to receive a pay rise in the next 12 months, said the report.

The TUC stepped up its call for an increase to the £96.35 a week statutory sick pay, from which more than two million low-paid workers – mostly women – are excluded because they do not earn enough to qualify.

The end of the furlough scheme poses a serious threat to low-paid jobs, and combined with the Universal Credit cut will be a “hammer blow” for low-paid workers, pushing many further into hardship, ministers were warned.

Ms O’Grady added: “It has been a tale of two pandemics. This Covid class divide has seen low-paid workers bear the brunt of the pandemic, while the better off have enjoyed greater financial security, often getting richer.

“This should be a wake up call – we need an economic reset. It’s time for a new age of dignity and security at work.

“Without fundamental change, the Government’s own levelling up agenda will be doomed to failure, and we risk repeating the same old mistakes of the past decade, allowing insecure work to spiral even further.

“Ministers must start by banning zero-hours contracts, raising the minimum wage with immediate effect and increasing statutory sick pay to a real Living Wage, making it available to all.”

Ms O’Grady also called on Labour leader Sir Keir Starmer to take inspiration from US President Joe Biden and make better pay and conditions for workers a central part of the party’s pitch to voters.

She told the BBC: “He’s got another opportunity to set out in primary colours what his agenda for working people in this country is.

“I hope he will take some inspiration from what we’ve seen from President Biden and in New Zealand and a number of other countries, with that whole issue of dignity at work becoming absolutely central to the public policy agenda and that recognition that there has to be a major reset on workers’ rights.”

Ms O’Grady was speaking ahead of the annual TUC Congress which is being held from Sunday.