Treasury perm sec Scholar tight-lipped on impact analysis for Covid-19 tiers

Treasury perm sec grilled by MPs demanding figures for effect on businesses of new localised restrictions
Tom Scholar appears before the Public Accounts Committee on 19 October 2020

By Jim Dunton

21 Oct 2020

HM Treasury perm sec Sir Tom Scholar has insisted his staff are “very closely” analysing the effect on businesses of the government’s localised tier system of restrictions for stopping the spread of Covid-19, but he refused to provide MPs with anything more than a generalised insight on the work.

Scholar was grilled by members of the Public Accounts Committee about his department’s understanding of the different impact businesses would face if the area in which they arebased moved between tier 1, tier 2 and tier 3.

Committee members showed a particular interest in the ability of pubs and clubs in local areas to stay afloat when restrictions – particularly the move from tier 2 to tier 3 – would require them to close altogether.

North West Durham MP Richard Holden asked Scholar what impact assessment HM Treasury had conducted on the effect on local  business of their area moving from tier 1 to tier 2. Holden's constituency is in tier 2, along with the rest of County Durham.

Scholar said the tiering system “does inevitably involve” a higher restriction on economic activity in higher-tier areas.

“The impact will be greater,” he said. “I can’t give you a percentage figure as to how much greater.”

Holden asked Scholar whether he was saying the Treasury had done no analysis of the difference those restrictions would make on the different areas.

“That’s not what I’m saying. We do analyse this very carefully,” Scholar replied. “What is extremely difficult is to make a precise forecast or analysis.”

Holden said that on the grounds that the government was providing support to at least some businesses in tier 3, there must be analysis underpinning the effect of being in any of the tiers.

“What is the suggested impact on tier 2 versus tier 1?” he asked. “There must be some differential between those tiers, otherwise you wouldn’t have provided support to tier 3.”

Holden also asked what support the government was looking to give to businesses in areas that moved from tier 1 to tier 2.

“I can’t give an answer to that question,” Scholar replied. “These are policy questions for ministers. Our job as officials is to provide the advice and analysis that ministers need to weigh up the different options. It’s not really for me to anticipate what that might be.”

The session came before it was announced that talks between the government and local leaders in Greater Manchester had been unable to agree a support package to accompany the region’s move into tier 3 restrictions. In the talks, local leaders reportedly wanted a £65m support package, while the government offered £60m, deeming this to be more in line with the money made available to areas that had already subject to the highest restrictions.

PAC chair Meg Hillier asked Scholar if he expected that ministers would introduce a standard support package to help businesses in different tiers, or whether there would just be a “bidding war”.

Scholar replied: “You’re asking me about policy decisions that are currently under active consideration.”

Hillier subsequently sought an assurance that staff in HM Treasury were doing a cost-benefit analysis of  support that businesses would need if they were to keep afloat that reflected the effect of being in different tiers.

“We are absolutely doing that kind of analysis and have been doing for many months and that’s also guided  previous policy decisions on the interventions,” Scholar replied.

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