Hindsight is a wonderful thing. It is always easy to spot the schoolboy error and be an expert on what should have been done. The inquiry into Covid-19 has been open season for those skilled at being wise after the event.
Despite the fact that nationwide lockdowns were untried and untested before Italy became the first country to implement one in early March 2020, the message coming out of the hearing is that Boris Johnson’s government should have shut down the country sooner and been more circumspect when lifting restrictions.
This week, Rishi Sunak’s “eat out to help out” scheme has come in for the full “with the benefit of hindsight” treatment. Did the then chancellor go ahead in the face of scientific advice? Was the Treasury, in the words of Johnson, the pro-death squad?
Clearly it is right that the case for speedier, longer and tougher lockdowns is made, but there is also a danger of groupthink here. The fuss over eat out to help out is part of a wider debate that needs airing.
Hard though it is to recall, there was a time when Sunak was the most admired politician in Britain. That’s hardly surprising given that back then, the former chancellor was handing out what appeared to be free money. Millions of Britons were furloughed and grateful to be living off the Treasury’s tab.
It was then, in the summer of 2020 and at the height of his popularity, that Sunak announced eat out to help out – a government-subsidised scheme to encourage the public to support the stricken hospitality sector. The scheme was seen at the time as something of an expensive gimmick, which was indeed the case. The Treasury set aside £500m, but eventually had to fork out £849m for 160m discounted meals on Mondays to Wednesdays that August. The argument against the idea at the time was that it was a waste of money that could be better spent elsewhere.
But eat out to help out was only one strand of a bigger package designed to boost hospitality and tourism: two of the sectors most affected by the lockdown. A more significant measure was the cut in VAT from 20% to 5%, which lasted until September 2021, before rising to 12.5% until March 2022. The Treasury was keen to reopen the economy and thought the risks of doing so needed to be balanced against the risks of not doing so. In other words, it was conducting a bog-standard cost-benefit analysis.
This really shouldn’t be seen as controversial. All radical ideas deserve to be challenged, and you don’t get much more radical than responding to a global pandemic by shuttering much of the economy and putting the population under house arrest.
Obviously there were going to be costs involved from implementing such draconian measures. Shutting schools, cancelling operations, discouraging people from visiting their GPs, confining people to their homes for weeks on end: all were bound to have consequences. Wiping out more than a decade of improvement in pupil attainment was one of them. Increased truancy rates was another. Record NHS waiting lists and delayed cancer treatment a third.
That’s even apart from the massive hit to the economy: the £400bn of borrowing, the 25% peak to trough fall in output, the shrinking of the labour force due to ill health and early retirement. The reason taxes are at their highest level since the second world war and public spending is being squeezed is that as a country, we are paying for the cost of lockdowns.
There is also a political dimension to the debate, which tends not to be aired. Lockdowns were less onerous for the rich than the poor, and easier on white-collar professionals than on blue-collar workers. They were particularly tough for the less well-off, those who couldn’t do their jobs from home, and those suffering from mental illness or at risk of domestic abuse.
The Treasury is not always right and often merits the criticism it gets. But it was right to challenge the lockdown orthodoxy and to be concerned about the damage being done to the economy and society more generally. As Sunak pointed out when announcing eat out to help out, those employed in hospitality are disproportionately women, the young and people from Black, Asian and minority ethnic communities. The bottom line is that lockdowns had catastrophic effects, especially on the most vulnerable, and the scale of the catastrophe becomes ever more apparent over time.
Maybe there was no alternative to lockdown in March 2020. Given the risk of the NHS being overwhelmed, perhaps lockdown was the least-worst option while vaccines were being developed. Perhaps the milder form of lockdown imposed in Sweden would not have worked here.
But it was valid to test those hypotheses then and the Covid inquiry should be testing them now. There is still a long way to go and it may be that Heather Hallett’s report will eventually weigh up the costs and benefits of lockdown, and emerge with a balanced judgment. So far, the signs have not been promising. There is a sense that the hearings are designed to produce evidence for a conclusion that has already been reached. If so, then that’s a great pity, because when the next pandemic arrives – as it surely will – it would be helpful for the UK to have learned the lessons of Covid-19 and be better prepared than it was last time.
Larry Elliott is the Guardian’s economics editor
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