Britain risks entrenching deep class, ethnic, gender, educational, generational and geographical divides unless the government acts to tackle inequality, a leading thinktank has said.

A report by the Institute for Fiscal Studies said the Covid-19 pandemic threatened to make life worse for the most vulnerable groups and urged ministers to seize the opportunity to forge an inclusive recovery.

The IFS said it was not inevitable the crisis would exacerbate inequality but said that would be the outcome in the absence of better education and training, moves to ensure the survival of small businesses and the provision of catch-up lessons for children from poorer households.

The Covid-19 report – part of a five-year IFS project on inequality – found that:

• Low earners were most likely to work in shut-down sectors, to have been furloughed or be at risk of unemployment. 

• A gap in death rates between better-off and less affluent neighbourhoods, as well as between some ethnic minorities and the white majority, had widened further.

• Some minority ethnic groups, especially those of Pakistani or Bangladeshi origin, were much more likely to work in shut-down sectors. Black groups were disproportionately represented in key worker occupations and had been contracting Covid-19 at far higher rates than the white majority.

• Workers under 25 were twice as likely as those over 25 to work in a locked-down sector.

• Mothers were more likely than fathers to take on the additional childcare and housework duties caused by the lockdown.

• Private schools were almost twice as likely to be providing online teaching as the state schools attended by children from the fifth most deprived families. 

Robert Joyce, the deputy director at IFS, and an author of the report, said: “The crisis has laid bare existing inequalities and risks exacerbating them, but some of its legacies might also provide opportunities.”

Ministers should be laying the foundations for a strong and inclusive recovery as well as dealing with the immediate crisis, Joyce added.

“If, for example, we can limit now the severity of career disruption, the widening of health and educational inequalities, or the extent to which small firms that had a productive future are squeezed out by larger established competitors, policy’s job in years to come will be much less difficult than if it is trying to limit or undo the damage.”

In a separate development, the head of an employers’ organisation has called on the government to prioritise jobs and training for the young to aid recovery.

In a letter to the chancellor, Rishi Sunak, the director general of the CBI, Carolyn Fairbairn, said: “Redundancies will rise fast over the autumn as support schemes, especially the job retention scheme, wind down. Past recessions show the impact of joblessness is deeply uneven.”

“Without immediate intervention, pre-crisis inequalities across regions, gender and race will worsen. Long-term unemployment will leave generational scars,” Fairbairn added. “Time is of the essence. Smart, fast policy is needed now to accelerate the process to minimise the human cost and in particular, protect the futures of our young people.”