New Covid restrictions ‘could cost UK economy £4bn a month’

The Institute of Economic Affairs said ‘Plan B’ measures being considered by the Government could knock 2% off the country’s economic output.

Holly Williams
Wednesday 08 December 2021 12:02
New Covid restrictions to clamp down on the spread of the Omicron variant could cost the UK economy £4 billion a month and see taxpayers foot the bill for more emergency support, a think tank has warned.
New Covid restrictions to clamp down on the spread of the Omicron variant could cost the UK economy £4 billion a month and see taxpayers foot the bill for more emergency support, a think tank has warned.

New Covid restrictions to clamp down on the spread of the Omicron variant could cost the UK economy £4 billion a month and see taxpayers foot the bill for more emergency support, a think tank has warned.

The right-wing Institute of Economic Affairs (IEA) said Plan B measures being considered by the Government could “easily knock” 2% off the country’s economic output.

It also cautioned the Chancellor may need to launch more support schemes to help hard-hit sectors and firms, adding further to the UK debt pile.

The additional Covid restrictions apparently being considered in Whitehall could easily knock 2% off GDP – costing the UK economy £4 billion a month – and force the taxpayer to stump up billions more to prevent a new wave of bankruptcies and job losses

Julian Jessop, Institute of Economic Affairs

The IEA called for “much stronger evidence” that the new variant sweeping across the UK is more deadly and not just more infectious before putting in place further measures.

Julian Jessop, economics fellow at the IEA, said: “Even without a full national lockdown, the additional Covid restrictions apparently being considered in Whitehall could easily knock 2% off GDP (gross domestic product) – costing the UK economy £4 billion a month – and force the taxpayer to stump up billions more to prevent a new wave of bankruptcies and job losses.

“This is on top of all the social costs and harms to people’s wellbeing and liberties, as well as the risk of further disruption to children’s education.”

Under the Government’s Plan B, people could be told to work from home to limit the spread of the virus.

Covid vaccine passports may also be needed for events with crowds, such as football matches.

Professor Neil Ferguson a member of the Scientific Advisory Group for Emergencies (Sage), has suggested people may be told to work from home imminently as Omicron spreads fast, with the variant set to take over from the Delta strain before Christmas.

He added that a UK-wide lockdown to deal with the threat of Omicron cannot be ruled out, although the current threat is unclear.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in