You can’t save the economy without protecting the people

In a week’s time, we will finally emerge from our 16-month mask-wearing lockdown. It is hardly surprising that many people are determined to celebrate as if it were the end of a war — VC (Victory over Covid) Day perhaps, instead of the VE Day and VJ Day of 1945.

But in this case, the war is not over. More than 150,000 people have died, and as many as 1 million people are suffering from long Covid. On top of that, about 30,000 people are catching Covid-19 every day — a figure that the health secretary, Sajid Javid, has said could rise to 100,000 over the summer.

In fact, since Javid moved into the hot seat at the Department of Health and Social Care on 26 June, some 410,000 new cases of Covid-19 have been recorded, and 336 people have died within 28 days of testing positive for the virus. Are we really celebrating victory while only two-thirds of Britons have been vaccinated twice, and almost none who are under 18?

Of course, the lockdowns required to curb the spread of the disease have delivered a huge negative impact on the economy, with billions of pounds wiped off growth and millions of people made redundant or furloughed – with those support schemes now being wound down. The Organisation for Economic Cooperation and Development has warned that unemployment will rise over the second half of the year as furlough is withdrawn, and will not return to pre-pandemic levels until 2023. Bank of America says its surveys point to 15 per cent of furloughed workers expecting to lose their jobs, up from about 10 per cent in early June. There is already evidence that economic activity is slowing. The UK economy grew 0.8 per cent in May, undershooting forecasts of 1.5 per cent. Of course, there are some one-off factors here, but the economy is still 3.1 per cent below its pre-pandemic peak.

Google mobility data for June showed that the number of visits to retail outlets dropped by 17 per cent compared with the long-term baseline, maintaining a long run of hesitant activity. Supermarkets were almost back on an even keel, with a 2 per cent fall, but public transport was down 28 per cent.

This was echoed by a 25 per cent decline in footfall to shopping centres in June compared with 2019 levels, according to the retail consultancy Springboard.

Given that this data captures the impact of the reopening of non-essential retail in April and the partial reopening of indoor hospitality in May – which should be a much bigger deal than next Monday’s loosening – it points to the danger of an underwhelming bounce-back.

As Shreyas Gopal, a strategist at Deutsche Bank in London points out, this may be offset by what he calls “indirect ripple effects” of the exit wave. One of these is on the demand side of the economy if rising numbers of new cases – 31,772 on Sunday – impact consumers’ confidence.

He points to a fall in consumer confidence last month for those aged 50-64, despite the vast majority of this group being double-vaccinated and cases not having risen anywhere near as much as in younger age groups.

The question that ministers might want to ask themselves is: how likely will the average person be to get on a bus, tube or train or to enter an indoor shopping centre on Monday knowing that no one will be wearing a mask – 24 hours after they were legally required to wear one?

On the supply side, sectors that rely heavily on younger workers, such as hospitality and leisure, may have to close down again temporarily if a large share of their workforce is asked to isolate. The services sector, which includes those two businesses, reported this month that staff shortages were already causing problems.

At the heart of the government’s thinking seems to be a false trade-off between economic recovery and public health – because the imposition of restrictions hits the economy, the idea is that unlocking must therefore revive it. However, an unlocking that leads to a further rise in infections, hospitalisations and deaths – and an ensuing slump in confidence – will not do the economy any favours.

If unlocking is the route we are going down, there are measures we can take. Trish Greenhalgh, professor of primary care health sciences at Oxford University and a longstanding advocate of mask-wearing and other restrictions, says the government must invest both in preventing disease by making buildings safe and strengthening the health service.

To save the economy, we first need to save people.