Covid-19: Economic Impact of Lockdowns

Abena Oppong-Asare Excerpts

Tuesday 29th November 2022 Westminster Hall

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairship, Mrs Murray. I congratulate the right hon. Member for Tatton (Esther McVey) on securing the debate, and thank hon. Members for their contributions. I am glad we have the opportunity to discuss this issue; I agree with the right hon. Lady that we need to have these frank and difficult discussions. The pandemic had a deep financial, economic impact. It is important to think about the future, and how we can grow our economy and improve living standards.

I was elected in December 2019, before the pandemic hit. I then saw at close hand the impact on people’s livelihoods and wellbeing, and I know that people are still struggling. A lot has happened since covid-19 first reached the UK: not one, but two toppled Governments; two Prime Ministers; the scandal of Downing Street Christmas parties; and more than 50 people issued with fixed penalty notices, including the current Prime Minister.

I want to take us back to 2020. On 23 January, the Foreign Office advised against all but essential travel to Wuhan, China, the epicentre of the outbreak. The first case of covid-19 in the UK was confirmed on 30 January, with cases steadily rising over the following weeks. On 6 March, the then Prime Minister said, during a visit to a lab in Bedfordshire,

“It looks to me as though there will be a substantial period of disruption when we have to deal with this outbreak.”

It was not until 23 March that the Prime Minister announced a lockdown—the introduction of new restrictions on everyday life and travel. We know that the delay in taking that decision risked many lives, harmed our economy and prolonged the pain. For the next 16 months, the Government yo-yoed in and out of lockdowns and new restrictions, with much dither and delay.

Some members of the Government thought it might be best to let the virus rip. The result was unclear messaging, decisions taken too late, and a death rate that was too high. The Government were too slow to lock down in March 2020, too slow to protect our care homes, too slow to save jobs and businesses, and too slow to get protective equipment to the frontline.

In the summer of 2020, the Government ignored warnings about the second wave. In September, a circuit breaker was introduced, against scientific advice, followed by a longer lockdown a month later. As my hon. Friend the Member for Blackley and Broughton (Graham Stringer) mentioned, in December, when the scientific advice was that national lockdown was necessary, the Government dithered for nearly two weeks and ended up cancelling Christmas at the last minute.

The current Prime Minister, who was then Chancellor, was not even in the country at that point. The Government shut down the economy at the height of the festive period, and was nowhere to be seen. He had to fly back from his California home after business leaders demanded that he plan a financial support package, following the mixed messages from Government. That indecision cost lives and livelihoods.

I pay tribute to our fantastic NHS and social care workers, without whom we would have really struggled. Many put themselves in harm’s way to slow the speed of the virus. I also pay tribute to the British people, who rose to the challenge and came together as communities to protect the most vulnerable. It was a time of national solidarity—a shared effort to face a challenge that most of us had never experienced before.

The right hon. Member for Tatton referred to the Labour party. Throughout that period, the Labour party called for quicker decision making and measures to protect jobs and businesses. The Government could have been provided targeted support for the hardest-hit sectors, fixed sick pay and eased the burden of business rates, whether that was on high street businesses, arts venues, café or hairdressers. So many businesses suffered from the lack of clear communication and decisive action.

We know that we were not all in it together. When much of the country was struggling, No. 10 was hosting parties. Sue Gray’s independent report said that senior leadership in No. 10

“must bear responsibility for this culture.”

It continued:

“At least some of the gatherings in question represent a serious failure to observe not just the high standards expected of those working at the heart”—

[Mrs Sheryll Murray (in the Chair)]

Order. I gently remind the shadow Minister that we are supposed to be debating the economic impact of the covid-19 lockdowns.

[Abena Oppong-Asare]

Thank you, Mrs Murray, but I do think this is important because, while we were going through the economic crisis, this is what was happening. This is what we need to look into when we learn lessons for the future.

[Mrs Sheryll Murray (in the Chair)]

Order. We are debating the economic impact of the covid-19 lockdowns.

[Abena Oppong-Asare]

I will take your comments on board, Mrs Murray.

We know that the impacts of covid-19—particularly the economic impacts—run deeper. Just this month, new information has been revealed detailing how some people, including a Tory peer, sought to use covid-19 and lockdowns for their own benefit. PPE Medpro was given £230 million in Government contracts after a referral to the VIP fast lane by a Tory peer. The extent of her involvement in PPE Medpro has now come to light, and tens of millions of pounds of taxpayers’ money ended up in offshore accounts. The protective equipment produced by PPE Medpro was substandard: 25 million surgical gowns, which cost the taxpayer £122 million, were rejected by the Department of Health and Social Care after technical inspection because they were completely unusable. We also know that £6.7 billion was wasted on covid payments to businesses and individuals fraudulently or by mistake.

The economic impact of covid-19 lockdowns was immense, and was exacerbated by dither and delay in Downing Street, and hard-working businesses, families and individuals suffered as a result. It has left us with an economy that lags behind the pack. Wages are lower in 2022 in real terms than when the Tories came to power in 2010, and business investment is 8% below its pre-pandemic peak. The mini Budget from the short-lived Prime Minister and Chancellor crashed our economy.

The economic facts speak for themselves. We are now the only G7 economy that is smaller than it was before the pandemic. Other countries are still dealing with the economic impacts of covid-19, but we are doing worse. We are at the back of the pack, lagging far behind. The Chancellor said he wants to address the impacts, but again the economic facts speak for themselves.

Perhaps I am being a bit unfair to the current Chancellor and Government. They have quite a task on their hands. After all, for the 12 years in which their party has been in Government, low growth and low ambition have held our country back. What would Labour do fix the mess and grow our economy in the aftermath of covid? Back in January, we proposed a windfall tax on oil and gas giants—on the profits of rising prices and war. The Government ignored our calls and instead pressed ahead with their own windfall tax, which amounts to a huge giveaway of public money to the very oil and gas companies that are making record profits. Under the scheme, some oil and gas companies will pay zero tax this year, despite record global profits.

[Ian Paisley]

I have listened carefully to the hon. Lady. Some of us who turned up to Parliament during that terrible time voted against the Government’s proposals. I think I voted against every single Government restriction except one. The hon. Lady and her party, I think, voted for them all. There is a bit of complicity here: if somebody’s hands are on the steering wheel and they keep driving in one direction, it is hard for them to say in hindsight, “Something different should have been done.” This grates on me just a little because there were opportunities all along the road to say, “There’s a different course of action that can be taken here.”

[Abena Oppong-Asare]

I want to be clear that the Labour party did raise concerns throughout the pandemic that the Government were not looking at the scientific advice, and they took late action to address and deal with it.

To conclude, as we look to recover from the pandemic, we need an ambitious plan for growth. That is what Labour has presented and that is what we will champion.

[The Economic Secretary to the Treasury (Andrew Griffith)]

It is a pleasure to serve under your chairmanship, Mrs Murray, and it is always a pleasure to follow the hon. Member for Erith and Thamesmead (Abena Oppong-Asare).

I congratulate my right hon. Friend the Member for Tatton (Esther McVey) on securing this debate and on her ongoing work in this domain. We have had a wide-ranging debate. I will not respond to every point as many of them are for the inquiry chairman, Baroness Hallett, to answer. Members should be reassured that, within scope, she will look at the points they raised about the scientific and public health advice and the impact on health outcomes, education and civil liberties.

My right hon. Friend was quite right to lament the fact that we in Parliament did not have the opportunity to ask questions at the time. It is to her credit that she continues to bring back this issue so we can learn the lessons of lockdown, which she rightly referred to as a blunt instrument. I am sure that no Member would wish it to be repeated. She was also right to remind us that under Labour lockdowns would have been longer and more costly.

[Abena Oppong-Asare]

Will the Minister give way?

[Andrew Griffith]

I will not, because I would like to respond to as many points as possible. We have had a long debate about a wide-ranging set of consequences. We heard the hon. Lady’s perspective and, indeed, to the extent that it had a critique and a narrative it was that we did not lock down deeper, harder and for longer.

[Abena Oppong-Asare]

Will the Minister give way on that point?

[Andrew Griffith]

No, I have made it clear that I will not be giving way.

My hon. Friend the Member for North Wiltshire (James Gray) mentioned the impact on the hospitality sector. I represent a constituency with a significant hospitality sector, and we know that the sector was affected disproportionately during the lockdown. He and other Members understandably raised the ongoing impact of covid. One or two Members, although perhaps not enough, also mentioned the impact of the war in Ukraine, and I thank those who did for putting it in the right context. My hon. Friend raised the issue of one hospitality business in his constituency the energy bills of which have gone from £16,000 to £60,000 per month. Clearly, he is looking at the issues that people are facing, and we hear that.

The economic priority during the pandemic was to stave off an economic depression, mass unemployment and the potential for rapidly deteriorating living standards. My right hon. Friend the Member for Tatton talked about GDP falling to its lowest level since 1709. We are fortunate that the economy is now growing, thanks not only to the productive and entrepreneurial nature of the British people but to the unprecedented level of support provided. Ours was one of the fastest growing economies in recent years and that continues to be the case, and we came out of lockdown earlier than many other countries.

As all Members recognise, the attempt to limit the spread of the virus did mean the implementation of restrictions. Alongside those restrictions, the Government provided support for individuals, families and businesses throughout the country that were impacted by the virus. The two things went hand in hand. The Government could not manage that unprecedented situation. It is easy with hindsight—we have talked a lot about hindsight —and many Members have empathised with that.

I am grateful for the support from the hon. Member for North Ayrshire and Arran (Patricia Gibson), who made some fair points about the uncertainty that was faced and the difficultly of the decisions. It is my belief that they were made in good faith and tried to do the best to protect people and the economy. We cannot know, but there is at least the possibility, which the hon. Lady raised, that the impacts could have been worse if it was not for the financial support in particular that was provided, along with the other measures.

For all too short a time I served alongside the hon. Member for Blackley and Broughton (Graham Stringer) on the Science and Technology Committee. He was a ferocious interrogator and—if I may say so—very wise in the early, almost contemporaneous analysis of the scientific advice. His contribution was largely about the scientific advice, so I hope he will forgive me if I do not respond more fully to him.

My hon. Friend the Member for Bolton West (Chris Green) reiterated how vital it is that we do not lock down Parliament again, and I support him in that. Lessons will be learned and must have been learned. We here all have a voice. The reason why we are here today is because we have a voice to protect our constituents and to protect the economy from the ravages of things such as the pandemic.

My hon. Friend the Member for Bolton West also talked about the compounding effect, not just of the pandemic. I am the first to acknowledge that the pandemic has an ongoing impact on the economy. The right hon. Member for East Antrim (Sammy Wilson) talked about “economic long covid”, which is certainly part of the context in which we sit today.

My hon. Friend the Member for Bolton West reminded us that at that time nobody anticipated—as I think he put it—Europe’s biggest oil producer invading Europe’s biggest food producer. That is one reason why the Government have once again come forward with an unprecedented level of support to get people through the winter and the energy crisis that we now face, with the same objectives as the generous support that was provided during the pandemic.

Along with other major economies, the UK is in the midst of a cost of living challenge that has been caused by global inflation as a result of the disruption of supply chains, as well as the increase in energy prices. This is a global challenge and we still see higher inflation in Germany, the Netherlands and Italy. We are acutely aware of the pressures that households and businesses face. Several Members said that having been so successful in protecting the economy, jobs and businesses, it is clearly vital—this is a shared objective of Government—that we continue to do so again this winter.

Going forward, we will continue to place our people and our businesses at the heart of our policies. We are happy to make interventions, and as we debate the economic consequences of covid that is something we can all take forward.