The government is risking both lives and the economy with its approach to easing the lockdown

New economic data shows sharp contraction in output, but government’s muddled response to such predictable numbers risks making things worse, writes Ben Chapman

Construction workers and others who cannot work from home have been encouraged to return to their jobs (Getty/iStock)

The economy contracted sharply in March, as we knew it would. All previous indicators, not to mention common sense, had pointed to a fall in the amount of goods and services produced after lockdown was called on 23 March.

Official data released on Wednesday shows that most sectors were affected, with those that have been forcibly closed, such as restaurants, seeing the most significant drop.

This was expected when parts of the economy have been deliberately and temporarily shut down. Just about the only positive number in the Gross Domestic Product (GDP) data was a record surge in sales of “paper and paper products” as Britain stocked up on loo roll.

But there are signs that the government’s economic response to the predictable reduction in output is beginning to waiver. Up until now, that response has been clearly aimed at preserving the economy in the long term, no matter how deep the temporary downturn is.

This week, however, the government has begun to open up parts of the economy without first being clear about how it can do so while keeping the spread of infection under control. That puts both lives and GDP at greater risk.

In the latest example, the government last night announced plans to reopen the housing market so that sales and lettings could go ahead with immediate effect.

“From today anyone in England can move home if they follow new guidance published by housing secretary Robert Jenrick,” the press release stated.

But the guidance, published three weeks ago, leaves questions about safety unanswered. Even the estate agents’ trade body said on Wednesday that it needed further instructions “as soon as possible” from the government on how to conduct business safely.

Tenants and homeowners may have questions too. According to one survey carried out last year, it takes 19 viewings, on average, to sell a home.

The government wants people to conduct virtual viewings “where possible” but inevitably many will not be. If each viewing is attended by a couple, plus an estate agent, then dozens of strangers could have entered someone’s property to look around before it is sold.

They’ve been advised not to touch things, if they can, yet we know the virus remains airborne for hours. Are potential viewers to be forced to wear masks when we don’t have enough protective equipment for nurses and care workers?

People who have symptoms are told not to attend home viewings, but we know that a significant proportion of those infected with the coronavirus show no symptoms, or are asymptomatic for days.

For those who are privately renting, a situation of dozens of strangers entering their home could be imposed upon them by a landlord and managing agent.

How can this be considered safe while at the same time a visit from the tenant’s parents would be considered an unacceptable danger? With no publicly available scientific basis for the government’s decision, no one can answer this question.

Construction and manufacturing workers were also told on Sunday to go back to work before detailed guidance had been issued on how to do so safely. Many have been at work throughout the pandemic in any case, as no explicit instructions had been given by the government to down tools.

Some guidance has now been published but the Trades Union Congress has been among voices stressing that this guidance needs weeks to implement.

There has been a trend among some commentators to pit the economy and the lives of citizens in opposition to one another; as if there is a direct inverse relationship between the two.

Ten thousand lives for 10 per cent of GDP, say.

It is easy to see the logic behind this morbid calculation: the virus cannot be contained without significantly curtailing economic activity so there must be a simple trade-off between the two.

But this oversimplifies the issue. As has been pointed out, with the right policy measures in place, such as the furlough scheme, and training workers to build the skills more in need in a post-pandemic world, the economic damage can be curtailed and the recovery made more swift.

Scientific evidence indicates that pulling parts of the economy out of hibernation prematurely risks increasing the infection rate as all those workers interact en masse in workplaces, and prospective buyers poke round people’s homes.

A group of scientists convened by Sir David King, a former chief scientific adviser, said on Tuesday that further outbreaks are inevitable under the government’s plans to reopen parts of the economy. First we must limit the number of infections drastically so that cases can be tracked and isolated, Sir David said. This is the only way we currently have to contain Covid-19’s impact.

We are not close to that level yet, in part because sectors of the economy have remained too active, and interactions between people have been too frequent and not conducted in a way that lessens the virus’s spread.

The result of a rise in case numbers would be having to shut down parts of the economy again. The government has itself admitted it will do this if the R number – the rate of the virus’s transmission – increases. This would prolong the economic pain rather than alleviate it.

The economic fallout cannot be mitigated without first tackling the public health crisis by lowering case numbers and ensuring work can be done safely.

The current approach risks leaving the UK with the worst of both worlds: an unnecessarily high death toll and a deep, long-lasting economic hit. More than 600 people lost their lives to Covid-19 on Monday. Efforts to revive gross domestic product are important but they cannot come before tackling that most crucial number of all.