A Conservative MP has urged UK Business Secretary Jonathan Reynolds to refer Vodafone to the Covid corruption commissioner, amid claims the telco took advantage of the government's pandemic support that was set out for small businesses.

A report by The Guardian earlier this week said that John Hayes, a Conservative MP and former minister wrote a letter to Reynolds asking for an inquiry into the matter.

“Given the allegations about potential misuse of government Covid financial assistance, will your department refer these allegations to the ongoing inquiry into potential misappropriation of public funds during the pandemic, and the Covid corruption commissioner?" asked Hayes.

Last month, the Labour Party's Chancellor of the Exchequer, Rachel Reeves, appointed Tom Hayhoe as Covid Counter-Fraud Commissioner.

The one-year role has been created as an effort to "recoup public money lost in pandemic-related fraud and contracts that have not been delivered."

Hayes' questioning of Vodafone follows a separate report by The Guardian last month that 61 current and former Vodafone franchisees in the UK filed a legal claim against the carrier over alleged cuts to their commission payments and remuneration.

The claimants filed the lawsuit seeking more than £120 million ($151m) against the company, which was given regulatory approval to complete its £15 billion ($19bn) merger with Three last month.

The lawsuit alleges that Vodafone gathered information on state relief that had been awarded to some of the claimants, and "used its knowledge of the small business grants to reduce the commission payments it was making to franchisees."

Vodafone denied the allegations, saying that it strongly "refuted" the claims, while noting that it had not received government funds at any point.

DCD has contacted Vodafone for additional comment.

Some of the claimants detailed how the actions of Vodafone had caused them and their families severe financial and personal distress, including reaching the edge of bankruptcy.

The program was set up in 2017 by Vodafone before it was expanded a year later.

However, it was during 2020, that some of the franchisees pinpoint the downfall of the program.

On July 17, 2020, Vodafone invited its 150 franchisees, who operated about 400 stores, to join a video call to tell them that their commissions were being cut. Those on the call noted that Vodafone gave little to no notice and no other explanation beyond the company deciding to take its stores in “a different direction."