MPs call on Sunak to reveal economic impact assessment of Covid-19 measures

Treasury Select Committee seeks data briefed to SAGE as Labour demands end to last-minute policy scrambles
RIshi Sunak PA

By Jim Dunton

03 Nov 2020

MPs have asked the Treasury to release an economic-impact assessment on the effects of measures to stop the spread of Covid-19 and for the data to be made available ahead of tomorrow’s lockdown vote.

Treasury Select Committee chair Mel Stride today wrote to chancellor Rishi Sunak calling on him to publish analysis work discussed with the government’s Scientific Advisory Group for Emergencies (SAGE) in September. Stride said the meeting minutes referred to work led by the chief economist to “analyse the economic impacts and associated harms of all interventions, alongside the epidemiological assessment”.

He said the minutes of the 21 September meeting clearly stated that work on the economic impact assessment was “underway [sic] under the auspices of the chief economist” and would need to be considered by policy makers.

Stride’s letter to Sunak says: “I would be most grateful if the Treasury could provide the Treasury Committee with its analysis of the economic impacts and the associated harms of the interventions, referred to in the SAGE minutes, including analysis of the specific lockdown that the government intends to introduce on 5 November.”

It concludes: “It would be helpful if this analysis could be provided prior to the vote in the House of Commons on the new lockdown measures on 4 November.”

Last month Treasury perm sec Sir Tom Scholar was highly guarded on the topic of  the economic analysis that officials had produced in relation to the differing impacts of the government’s three-tier approach to localised restrictions designed to stop the spread of Covid.

While he did not deny the existence of analysis on the differing consequences for businesses of being in a tier 1, tier 2 or tier 3 area, Scholar gave only very generalised answers – stating that areas subjected to the most severe restrictions would “inevitably” face higher impacts.

Two days after Scholar’s Public Accounts Committee grilling, Sunak unveiled a boosted package of job-support measures tailored to different local tiers. The announcement came a week after the Treasury sent a strong message that no new funding would be found for areas moving into tier 2.

In a further change of tack, at the weekend the government announced that the job-protecting furlough scheme would be extended for the duration of the new England-wide lockdown set to come into force on 5 November, overriding the tier system.

The furlough scheme had been due to end just a few hours later on 1 November,  to be replaced by the Job Support Scheme first announced in September but tweaked by Sunak last month.

Shadow chancellor Anneliese Dodds said Saturday's decision to keep the furlough scheme in place was the fifth change of government policy on coronavirus-related economic support in four months and evidence of a continuing “last-minute scramble” in policy terms. 

Last night, she wrote to Sunak calling on him to set out a strategic, six-month plan that would give workers and businesses “much-needed certainty” and suggested the chancellor meet with the Labour Party, trade unions and businesses to work out the details.

Dodds said Saturday’s lockdown announcement was “sadly symptomatic” evidence of  “the lack of any strategic planning by the government to support jobs and businesses”. 

“We have had a succession of ‘plans’ based on core economic assumptions that have proved to be overly optimistic given the government’s inability to get a grip on the health crisis – each one having to be dropped and replaced with something else as the evidence that it was not going to work became undeniable,” she said.

“I fully appreciate that none of us can foresee the exact trajectory of Covid-19 but this short-sighted approach is making a bad situation worse. I urge you to use this moment to work with others to set out a proper, strategic plan for the future that can adapt to changing circumstances and give businesses and workers the certainty they desperately need.”

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