Covid-19: Economic Impact of Lockdowns

Sheryll Murray Excerpts

Tuesday 29th November 2022 Westminster Hall

[Mrs Sheryll Murray (in the Chair)]

The debate may continue until 4.9 pm.

[Esther McVey (Tatton) (Con)]

I beg to move,

That this House has considered the economic impact of covid-19 lockdowns.

It is a pleasure to serve under your chairmanship, Mrs Murray, and to be able to debate the economic impact of covid-19 lockdowns, because so often during the pandemic we did not have the opportunity to question key decisions that were taken. In those early days of covid, much was done in a rush. Although it was understandable then, with the passing of time analysis needs to be done of the measures and decisions taken. No matter how painful and difficult the conversations will be, we need to have them. Open and frank conversations are made more difficult by the fact that the vast majority of MPs voted for continued lockdowns and most of the media was reluctant to question them.

Although everyone supported the first lockdown—March to June 2020—no one knew what we were confronting. As knowledge of covid and medical treatments grew, so should the debate have grown, particularly about subsequent lockdowns, but that was not the case. Prior to March 2020, how many of us had heard of the concept of lockdown? Blanket, stay-at-home policies were an unknown and unevidenced method of trying to control the virus.

Although lockdowns will have saved lives from the virus, many experts predicted from the start that they would also cost lives, through the unintended collateral damage they inflict. A Government report in July 2020 found that more than 200,000 lives could be lost due to lockdown. Well-rehearsed pandemic protocols, including those endorsed by the World Health Organisation and the Department of Health and Social Care had not previously recommended lockdowns because, quite simply, they are a blunt instrument.

In addition, it was felt that such drastic restrictions would not be tolerated by western democracies. As Professor Neil Ferguson infamously put it, after observing entire communities in China in lockdown,

“We couldn’t get away with it in Europe, we thought. And then Italy did it. And we realised we could.”

That poses a question. If people assumed that the UK population would not tolerate lockdowns, was messaging hardened and questions against lockdown not tolerated, in order to force compliance? We might never know the answer. Ongoing lockdowns were achieved, but at what price? Interestingly, only the other week, Andrew Gilligan, a former No. 10 adviser said on GB News that, looking back, the ongoing lockdowns were wrong, but politically we could not have got away with not doing them.

Why was that? How was an environment created in which even asking questions and providing alternative suggestions could get someone demonised? And those people were. I wrote an article for The Daily Telegraph in November 2020 saying, regretfully, that politicians had been guilty of a dereliction of duty. Instead of just listening to the one-dimensional approach of Public Health England and the scientists, they should have factored in all competing consequences. They did not and ploughed on, without questioning those other factors.

--- Later in debate ---

[Esther McVey]

I am a massive fan of small businesses, enterprise and those people creating wealth in their communities, and we will have to support them. Also, I will pause for a moment to reflect on all those small businesses that did not get support during the pandemic, which are known as Forgotten Ltd, and they also need support going forward. We again have to create a dynamic world and a dynamic UK for these private enterprises.

Vacancies are now at a record high as people elect to resign from the labour market, which is known as “the great resignation”, and because there are those other people who are now classed as being economically inactive. This is something that we could not have foreseen as we furloughed and closed the country down, but again it is a consequence of the lack of debate, probing and questioning at the time.

It is finally time to publish the much talked-about but still missing cost-benefit analysis that led to the nation being locked down, and to have full disclosure about the facts that were available. Let us review the list of experts on the Scientific Advisory Group for Emergencies, or SAGE, and on other advisory committees. Going forward, let us ensure that there is transparency about the members of these groups, as we have for MPs, such as their political affiliation and the financial support they receive.

All eyes are on the covid-19 inquiry for impartiality and a diverse range of experts to give evidence. We need integrity and clarity, and the policy of lockdown needs to be assessed honestly and fully. However, today I call on the Minister—the Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith)—to release the much-awaited cost-benefit analysis of lockdown.

[Mrs Sheryll Murray (in the Chair)]

Before I call the next speaker, may I just apologise for the background hum? I understand that staff are trying to resolve it. In the meantime, however, if Members could speak very clearly, I think we can continue with the debate.

--- Later in debate ---

[Mrs Sheryll Murray (in the Chair)]

Order. The hon. Gentleman might want to keep within the confines of the motion that we are debating. This is about the economic impact of covid-19 lockdowns.

[Chris Green]

Absolutely, and the place I worked at, AstraZeneca, is a huge contributor to the British economy, not just through its manufacture of drugs, but through its research and development effort. The pharmaceutical sector is a vital part of the British economy. This goes broader than the big pharmaceutical companies, however. Smaller organisations, especially medical research charities, are an important part of the British life science sector. What did the disruption to their research effort mean? There are many rare medical conditions that need treatment. That research contributes to the economy, and the landscape in which the sector operates is a significant factor in our economy. If a lockdown disrupts medical research at an early stage, when the charity is raising money for research—perhaps recruiting a researcher and getting people on to clinical trials—it takes a long time for that medical research charity to regain those funds. Perhaps funds were raised through sporting events and other activities; that money has to be got back. They then have to recruit a researcher, or even a team of researchers, to look into getting the clinical trial started. There are many other aspects to it, too. The process takes a very long time.

The life expectancy lost due to the economic disruption has been mentioned. We should also think of the pharmaceutical and other products that would have been produced in that time. People’s life chances have been hindered because the medical progress that we would have made during that period was not achieved. If we look at all the different parts of our society, including the high streets and medical research, the disruption has been profound. This is partly about jobs when people leave school, but also about jobs in businesses and industries. We should also consider the life opportunities for people receiving medical treatment, and their ability to maintain their position in the workplace, which might be taken away if they do not get medical support.

At the beginning of covid and the lockdown, people did not realise or appreciate their impact. I think of what happened as a pulling on the thread of society, and the breaking of the bonds that bind us. Knitting them back together is challenging and difficult. It is expensive and takes a long time. In the meantime, the problems are difficult. I hope that my hon. Friend the Minister will reflect on that. In future such situations, whether the issue is covid or something else that has come along, I hope the Government will do a cost-benefit analysis, and will ask: if we need restrictions, what will that mean for all sectors of society?

--- Later in debate ---

[Chris Green]

The hon. Lady is making a powerful argument. One of the points that has been raised, which is part of the broader debate, is that we saw what was happening in China and Italy. People in Britain were already voluntarily choosing to restrict their activities and restrict going into work—

[Mrs Sheryll Murray (in the Chair)]

Order. I gently remind both speakers that we are talking about the economic impact of covid lockdowns. I also remind the hon. Lady that the shadow Minister and Minister have yet to speak, and I would like to allow at least a couple of minutes for the right hon. Member for Tatton (Esther McVey) to sum up. Please bear that in mind.

[Patricia Gibson]

Thank you, Mrs Murray; I will curtail my comments. The hon. Member for Bolton West (Chris Green) has made his point, but we need to move on in the light of the comments from the Chair.

I do not think the hon. Gentleman used the name of the country, but Sweden took a different approach to lockdown. However, the House of Commons Library has done some work on the issue and has pointed out that, although there was reduced economic activity as a result of lockdown, as we would all expect, it is likely that had lockdown not been implemented—a number of Members have been critical of lockdown—people would probably have reduced their social contacts voluntarily anyway, as they did in Sweden.

We will never to what extent that may or may not have happened, and we cannot know how the virus would have evolved had we not had lockdown. We could have found ourselves in a different situation all together. People can say, “At the time, I knew this and I knew that,” but the reality is that we do not know what the outcome would have been if the Governments across the UK had taken an entirely different approach. The impact could have been even greater than that which we suffered.

Everybody understands the effect of lockdown on education, on social contact and—it has not been mentioned—on mental health, but we were faced with an unprecedented situation in which we had to act at speed and try to take the pressure off the NHS. The right hon. Member for East Antrim said that people who supported lockdown want to forget it and act like it did not happen, but we cannot forget the context in which we were living. It was a time of great uncertainty, great fear and lots of unknowables, and we had to respond. I know that a number of Members are attacking the Government, and it is not often that I defend them, but this is not about the Government. This is about public safety and public health.

Businesses have struggled through lockdown, which was considered necessary at the time, and many have managed to survive and cling on to their livelihoods. They are now going through another wave of unprecedented difficulties. If the Government do not offer additional long-term support to businesses on energy costs, the initial money they invested to keep businesses afloat will have been wasted, because the very idea of that investment was to save businesses and jobs—that is what the investment was for. If the energy support is not sufficient, those jobs will disappear anyway, so the initial funding during covid will have been to no purpose. I want the Minister to think about that and comment on it when summing up.

[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.

--- Later in debate ---

[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.

[Mrs Sheryll Murray (in the Chair)]

I call Esther McVey, with one minute to wind up.

[Esther McVey]

I thank everybody for such a constructive debate, which was the start of our being able to look at the cost of lockdown in an open-minded way—being able to take challenge, being able to take rebuttals and answering things as honestly as possible—because when £400 billion is spent, we know that cannot be done without having long-term impacts.

We see the impact in the vulnerability of our country now—in the cost of living, the cost of jobs, the cost of inflation and the cost of poverty. We heard about the cost in terms of our health and our mental health. We should think before we ever introduce such profound policies again, particularly when the World Health Organisation and the Department of Health and Social Care have conceded that we should not use lockdowns because they are such a blunt instrument. We can never live in an atmosphere where just to ask questions is condemned. I thank everybody for participating in the debate.

[Mrs Sheryll Murray (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).