Rishi Sunak yesterday refused Mel Stride’s third request for the Treasury’s analysis of the economic impacts of the pandemic.
Stride, who chairs the Treasury Select Committee, suggests in this interview that the Chancellor misunderstands what is being asked for.
Others, Stride adds, might draw the “unfortunate conclusion” that providing the information would be “unhelpful in the context of persuading Members of Parliament to support a lockdown”.
“Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment. This work is underway under the auspices of the Chief Economist.”
“Now you’ve asked Rishi Sunak on three occasions to show you this analysis. What did you make of the answer he gave you in the Commons yesterday?”
Stride: “I can only imagine there’s a misunderstanding about what’s being asked for here.
“Because I think his response, which was really in line with his written response to me, was, well, we don’t produce official forecasts from the Treasury, that’s the job of the OBR and others, and these are the various forecasts which are out there – which of course are all in the public domain and we know about those.
“But that wasn’t actually what I was asking for.
“What I’m asking for is precisely the output relating to that section of the minutes of that Sage meeting on 21st September. If the minutes are accurate, there is work that has been going on at the Treasury, looking at the impacts of the lockdown measures, under the auspices of the Chief Economist [Clare Lombardelli].
“So we think, in terms of good decision-making, Parliament having access to all the information it needs to take these decisions, and the wider public, that that should be made public.”
ConHome: “You asked for something that Sage suggests exists. The letter gave you an answer to something you hadn’t really asked. It said it didn’t seek to disaggregate these economic outcomes, which it referred to in some detail, from their causes, whether they be lockdowns or other restrictions or the virus itself.
“What do you think is going on? You said a moment ago this seems to be a misunderstanding. What do you think is up? Has the Treasury just got the wrong end of the stick? Or is there some reason why it’s reluctant to engage in this way?”
Stride: “I think that’s a very good question. My feeling at the moment is that perhaps it’s got the wrong end of the stick.
“If it were not me answering this question, and I were to be a little more cynical about it, I might think, well, maybe this kind of information is unhelpful in the context of persuading Members of Parliament to support a lockdown.
“Because inevitably it’s likely to at the very least throw into sharper relief the kind of economic costs associated with these measures.
“And I’m not for a moment – I think this is very important for this interview – suggesting that.
“Let me put it this way. I think that would be an unfortunate conclusion that some might draw, and I think that’s unnecessary, because if we can clear up the misunderstanding we can see the information.”
ConHome: “Your committee wanted the information before the vote yesterday, and didn’t get it. With all that in mind, how did you feel about voting yesterday, and what’s your general view of the lockdown proposal?”
Stride: “OK. I don’t think we have enough information to make the best, most informed decision on this, and I don’t just point my finger at the lack of economic information, though there’s certainly a complete dearth of that, but equally at the health aspects of this.
“But at the end of the day you have to take a decision based on the information you have – you can’t just lament the fact that there’s a hole in it.
“You have to look at it, and it’s a matter of judgment. And my judgment, which was personally fairly finely balanced, so I supported it with a bit of a heavy heart, was that on this occasion I would trust that the Government’s judgment was more likely to be right than wrong.
“Now critical to all of this of course is what is the likely outcome in the counterfactual example of no lockdown, in terms of the over-running of the National Health Service.
“It seems to me that there are at least two strands within the health data that are problematic. One is some projections which I think have been to a degree debunked, like the projection of 4,000 deaths per day, which I think has been unhelpful.
“But the second thing, to be fair to the Government, is the very nature of responding to this pandemic, and the lags involved for example between infection, hospitalisation and ultimately sadly death, lead you to a situation where it’s very difficult to answer a number of the critical questions that you need to answer.
“Because you don’t actually have the data in real time. An example of that would be what is the average time that somebody infected with Covid spends in a bed within the NHS at the moment compared to the first wave?
“Now purely speculatively suppose that that figure is much lower than in the first wave, because you’ve got better treatments and we understand how to make people better faster.
“If it was, for the sake of argument, half the amount of time, that would be an effective doubling of the capacity of the National Health Service at a stroke in order to handle these particular problems.
“But we don’t know the answer to that critical question. And if we did, and it was half the time, we might be able to avoid the lockdown altogether, who knows.”
ConHome: “You’ve said it’s a misunderstanding. That’s a very charitable term. The Chancellor is a staggeringly acute and quick-in-the-uptake individual. Even if he were momentarily to misunderstand what you want, he wouldn’t misunderstand when you put the question to him again.”
Stride: “Of course he has a lot on his plate, and let’s hope that fairly shortly he has another look at it and perhaps we end up in a position where the information is made available.
“Or indeed it’s categorically stated that the information referred to in the Sage minute is not actually available, because it never existed.
“If it never existed, the question then becomes, given the magnitude of the decisions being taken around lockdown, why would you take a decision like that without that kind of information?
“So I think it’s difficult both ways, whether it exists or not, for the Treasury. But my hunch is that it does exist and we should have it.”
ConHome: “How significant do you think it is that a growing number of your colleagues – Theresa May, Graham Brady, Bob Neill, Nus Ghani and so forth – are calling for this analysis which you’ve been trying to extract from the Government?”
Stride: “Well I think that’s just reflective of two things. One is that the economy has been downplayed in the elements of the discussion so far.
“And secondly, through time it’s becoming more and more relatively underplayed, because the economic situation is getting that much tougher.
“So it’s more relevant today, when we looked at another £20 billion of support, and huge stress on the public finances going forward – we have a close look at this stuff, perhaps compared to on day one back in mid-March.
“And I think there’s one other important thing, which very few commentators have picked up on.
“It’s not just about what are the economic impacts of these measures, it’s about what are the consequential health impacts of those economic impacts.
“And there are at least two things that one thinks of here. One is that if you go into lockdown then you have an increase as we know in mental health problems, potentially suicides, and that needs to be quantified.
“And the second thing is that if you damage the economy, if you scar it, i.e. you end up with structural long-term contraction of the economy, you’re less able to fund the kind of health and social care services that we want to fund going forward, and that has a cost in lives.
“Now that’s not as dramatic as saying that next month we may be overrun in the NHS and there may be people very sick in NHS beds etcetera, but nonetheless it’s not something that can be avoided.
“And the problem is that not only is the economic analysis there in my opinion, but the consequent health analysis is not there either.
“We had a very interesting committee meeting that I organised about a week ago, where we looked at how you convert economic damage via something called the QALY, the Quality Adjusted Life Year, and tried to flesh out how you could make comparisons between economic damage – smaller economy, less public spending – and the consequence for lives.
“And that analysis can be done. It all sounds a bit esoteric, but at the end of the day, if you’re to take rational decisions about actions that are there primarily to save lives over the medium to long term, you can’t ignore those issues.
“Politically, of course, it’s very difficult to be entirely rational over the long term, because the immediate political expediencies tend to lead to shorter-term decision-making.”
ConHome: “What happens next to your committee’s inquiry into this whole question?”
Stride: “Well we will be publishing a report. We have called for the Government’s Chief Economic Adviser to appear before our committee next Wednesday.
“I’m hopeful that she will appear, alongside the Permanent Secretary to the Treasury, and we’ll be able to put further questions to her at that point.”
ConHome: “And how soon will we get your report? Because as you say there’s this great tension between immediate actions, including flinging a lot of liquidity into the economy, and the long term, when Keynes said we’re all dead, but some of us won’t be dead at least in the medium term.
“You might produce a perfect report which was far too late.”
Stride: “If it was a report it will vest within the ongoing inquiry we have into the economic impacts of coronavirus, and that probably wouldn’t be for some time.
“But we don’t need to rely on a report in order to get out the conclusions of a particular session.
“One of the things I’m acutely aware of, and I know the committee is, is just the point you’ve made, that everything is moving frighteningly quickly, and if you’re going to add value to the decision-making then you need to be as nimble as the Chancellor, if not even more nimble, in getting in and out with your commentary and your suggestions.”
ConHome: “Just following up what you said about the QALYs – isn’t there a natural reluctance of Government, and of MPs, to get into all this? Because it is extremely difficult to have a public debate about the value of a life lost to the coronavirus, to the value of a life that isn’t lost to it.
“It invites the charge of the Conservative Government, ‘the heartless Tories’, not putting enough value on some of the lives lost.”
Stride: “Well it depends. Politics as Bismarck said is the art of the possible. The QALY argument I think is the bridge between the economic and the effect on life and death and so on.
“It’s not a debate that we’re not already having. QALY is used by NICE in order to decide which drugs it will invest in and which it won’t.
“I don’t think you end up being heartless about anything. It’s a way of moving into a space where we look at the impacts of what’s happening far more holistically, and are therefore likely to take better decisions for the medium and longer term.”
ConHome: “What are the prospects for the economy, broadly speaking, do you think?”
Stride: “Not as good as they were a few months ago, unfortunately, because of the advent of the second lockdown and what appears to be a rather difficult second wave.
“Any idea of a V-shaped bounce back has completely gone, and it’s now a question of trying to avoid the W shape, and try to have a kind of Nike tick.
“One of the biggest elements to look at is going to be unemployment. To what degree can we avoid going back to where we were in the 1980s or worse?
“What the Government’s trying to do now is just to hold down that unemployment figure, in the expectation that a vaccine, better treatments and so on will be a game changer.”
ConHome: “Quite recently you were a very senior gamekeeper, Leader of the House, at the tail end of Theresa May’s Government. You’re now a very senior poacher, the Chair of a Select Committee, trying to get answers out of the Government. What’s the change like and are you enjoying this new role?”
Stride: “It feels quite liberating in many ways. It was a wonderful privilege to be Leader of the House of Commons, as it was to be Financial Secretary to the Treasury and Paymaster General and so on.
“But to be able to have the freedom now to try and be fair and balanced in our appraisal of what’s going on, I’ve been very complimentary of the Chancellor and the Treasury in many areas of what they’ve done, but to be able to point at things you really don’t think are right, and where you think you can add value, you can do that without restraint, and that’s been the most positive element I think of the experience for me.”