‘Stay home, save lives’ lockdown message hurt economy, Sunak tells Covid inquiry

The Government’s message to the public to “stay at home, save lives” during the first lockdown did lasting damage to the economy, Rishi Sunak has told the Covid inquiry.

The Prime Minister said there was an “over-compliance” with Boris Johnson’s instruction to remain at home in spring 2020, meaning fewer people went to work than Treasury officials had forecast.

And despite the children of key workers and vulnerable students being eligible to go to school during lockdown, just 2 per cent of pupils attended class compared to the 20 per cent that had been expected.

This led to a collapse in economic activity in April 2020 which was far worse than officials and ministers had anticipated.

Mr Sunak presented evidence to the then PM and senior Cabinet ministers in May 2020 showing that 56 per cent of the construction industry, and 38 per cent of the manufacturing sector, were not working.

The Prime Minister has used his 170-page written statement to Baroness Hallett’s inquiry to chart the efforts he made as chancellor to warn Mr Johnson of the risks to the economy from Covid restrictions.

He listed the long-term societal effects from Covid restrictions, including the NHS backlog, courts backlog, impact on children’s mental health and educational attainment, and criticised what he said was too much of a focus on following Sage advice on lockdowns rather than taking other expert opinion on board.

He added: “Obviously there were very severe immediate and longer-term impacts on the economy [from Covid restrictions]. These included, but were not limited to job losses, lower incomes, business failures, economic scarring, higher public borrowing and debt levels, and a higher tax burden.”

While he supported each lockdown due to the public health situation in the country at the time, Mr Sunak warned Mr Johnson in meetings throughout the pandemic over the long-term damage the restrictions would do to the UK economy.

In his oral evidence to the inquiry on Monday, Mr Sunak defended his controversial Eat Out To Help Out scheme and other measures he took as chancellor during the pandemic. His written statement goes further, by explaining how he had feared from the start of the crisis that the albeit necessary restrictions would take their toll.

At the time of the first lockdown, people were advised to go to work if they were unable to do so from home. Yet following early data on economic activity collapsing after just a week of lockdown, Mr Sunak warned Mr Johnson in a meeting in early April 2020 that this guidance was “being obscured by the headline message” to “stay at home save lives”.

The Prime Minister told the inquiry: “The issue of overcompliance with the stay at home messaging was something that I had been interested in and it had been analysed by HMT officials in briefings I had received during the first lockdown.”

He cited Treasury analysis showing the collapse in economic activity in April 2020 “is being significantly exacerbated by overcompliance. There is growing evidence of businesses and individuals going beyond government guidelines, making the economic impact worse… There’s also evidence that non-key workers who should still go to work if they cannot work from home are not… Although detailed guidance sets out that people who cannot work from home can continue going to work, this message sits behind a headline narrative that people should stay at home wherever possible”.

Mr Sunak also reveals that he told Mr Johnson during the second lockdown in November 2020 that the billions of pounds being spent supporting restrictions, including the Government’s furlough scheme for workers, was “costing a fortune and [is] not sustainable for the country’s finances”.