The UK government must implement "short but deep circuit breaker lockdowns" to bring the COVID-19 under control, according to a group of leading economists.
In an open letter published at openDemocracy, the group – which includes the University of Oxford's Professor Simon Wren-Lewis and the former Cabinet Office chief economist, Professor Jonathan Portes – say that the government’s approach to suppressing COVID-19 "risks becoming the worst of all possible worlds."
Partial measures to close the hospitality and other sectors without providing sufficient financial support will not suppress the rate of infection sufficiently to cut the death rate and protect the NHS, but will "almost certainly lead many businesses to close and workers to lose their jobs."
The letter comes as households and businesses across the UK face tighter restrictions in light of surging COVID-19 infection rates.
"As both SAGE and The Lancet have said, short but deep ‘circuit breaker’ lockdowns are the only way to rapidly reduce the R rate to a level which can then allow the economy and social life to open up again", the group note.
This will require "sufficient Treasury support", including extending the furlough and business support schemes introduced by the chancellor in the spring, and increasing support to the self-employed and those on Universal Credit.
as in times of war, there is no effective economic limit on crisis spending
The group acknowledge that this will come with a price tag. "But, as in times of war, there is no effective economic limit on crisis spending: debt can be absorbed now by the Bank of England and paid back over 25 years or more.
"Over the medium term there is no real trade-off between public health and the economy."
Exiting this cycle ultimately requires "a functioning test and trace system, with local health teams, rather than private and centralised companies, in charge."
The full list of signatories to the letter are:
Professor Simon Wren-Lewis, Emeritus Professor of Economics, University of Oxford
Professor Jonathan Portes, Professor of Economics and Public Policy, King's College London
Professor Daniela Gabor, Professor of Economics and Macro-Finance, UWE Bristol
Professor Michael Jacobs, Professor of Political Economy, University of Sheffield
Dr Jo Michell, Associate Professor of Economics, UWE Bristol