The cost of living crisis and runaway inflation are a result of imposing ruinous lockdowns on society, experts have told MPs and Peers.
The comments came in the latest meeting of the the Pandemic Response and Recovery All-Party Parliamentary Group (APPG).
Chaired by the Rt Hon Esther McVey MP, the group heard from experts about the societal consequences of closing businesses and schools, prohibiting healthcare, ordering the public to stay at home and unchecked money printing. One businessman told the group how government COVID-19 policies personally affected him, costing him £120,000, destroying his previously thriving business and leaving him in debt.
Professor of Industrial Economics at the University of Nottingham Business School, David Paton, explained why lockdowns are at the root of the current crisis:
Eye-watering sums of money were spent during lockdowns, on furlough and business support schemes which helped mask the inevitable economic consequences we are now seeing. Many of our current problems could have been avoided had the government carried out an effective cost-benefit analysis of lockdowns and other restrictions.
Quite simply, the lack of spending opportunities during lockdown contributed to a build up of personal and corporate savings. As restrictions eased, people began to spend these savings and, combined with the supply chain issues that built up in the meantime, sustained inflation became the inevitable result. Even worse, having spent about £70 billion, paying healthy people not to work and some £150 billion in total on support measures, the ability of governments to respond to this cost-of-living crisis via either tax cuts or increased benefits is limited due to the hit to public finances caused by lockdown-induced government spending.
Looking at the latest evidence on the observable economic harms, Professor of Health Economics at Nottingham University, Marilyn James said:
The Imperial College March 2020 report which recommended lockdowns knew the “economic effects of the measures which are needed to achieve this policy goal will be profound”. And indeed we have seen inflation rise dramatically in 2022 in part due to the Ukraine war although the trend starts in 2020, which will have largely been due to lockdown policies.