NIESR Press Release: “Ministers must end ‘widespread cost’ of blanket lockdown”

Published: 29th July 2020

National Institute of Economic and Social Research

NIESR Press Release:  “Ministers must end ‘widespread cost’ of blanket lockdown”

New research published by NIESR

 

Blanket restrictions on economic activity should be lifted and replaced with measures targeted specifically at groups most at risk, according to new findings to be published by the National Institute of Economic and Social Research (NIESR) next week. 

 

Detailed analysis of the costs and benefits suggests that the losses from continuing severe restrictions in the UK are large relative to the likely gains, according to analysts and medical experts, including a former member of the Bank of England’s monetary policy committee.

 

The research published in NIESR’s latest quarterly National Institute Economic Review on 29 July comes amid an intense political debate over whether the Government should move faster to loosen the lockdown measures to contain the Covid-19 virus that has seen the economy contract by a quarter this year.  The paper reflects the views of the authors and not necessarily those of NIESR and throws up the question of the difficult trade-offs involved in picking the stringency and duration of any lockdown between concerns on the nation’s health and the consequences for the economy.

 

In their paper, David Miles of Imperial College London and ex-MPC member, Mike Stedman of the RES Consortium and Adrian Heald at the University of Manchester’s School of Medicine, analyse the costs and benefits of lockdown policies in the face of Covid-19.

 

They argue that while the extent to which the lockdown contributed to a subsequent slowing in the rate of new infections and deaths is not easy to estimate precisely, it seems clear that it did bring it down significantly.

 

However, they say it is “very far from clear” whether keeping such tight restrictions in place for three months until the end of June when they began to be lifted was warranted, given the large economic costs. They say that the costs of carrying on with such a lockdown are likely to become greater — perhaps far greater — than its benefits.

 

Their analysis was based on an attempt to place a value on possible lives saved, by focusing on quality-adjusted life years (QALY) that may have been saved. The NHS has established guidelines about how much should be spent on medical treatments that on average yield benefits in life years saved. This effectively values a QALY at £30,000.

 

On the most favourable (though far from likely) set of assumptions about its effectiveness, the widespread lockdown could have saved as many as 440,0000 lives. That is based on scenarios made by the team at Imperial College led by Professor Neil Ferguson on outcomes had there been no change at all in behaviour, scenarios that influenced the Government decision to impose the lockdown. Using the £30,000 figure that is the NHS guideline then generates a maximum value of potential years of life saved of £132 billion.

 

They say that lowest plausible estimate of the cost of the lockdown - which ignores all lost GDP beyond 2020, excludes all medical side effects, and ignores the future damage of huge disruption to education - is around £200 billion. So, on the most favourable assumptions on its effectiveness, and the most optimistic assessment on its cost, the lockdown generates costs that are still high relative to benefits. On more plausible assumptions a lockdown kept in place for over three months generates costs that are likely to be significantly in excess of benefits.

 

We find that the costs of the three-month lockdown in the UK are likely to have been high relative to benefits, so that a continuation of severe restrictions is unlikely to be warranted,” they write. “Treating possible future COVID-19 deaths as if little else matters is going to lead to bad outcomes.”

 

They urge policymakers to “normalise” how they view COVID-19 because its costs and risks are comparable to other health problems, such as cancer, heart problems, and diabetes where governments have made resource decisions for decades.

 

Weighing up costs and benefits of maintaining general and severe restrictions is necessary. That is how decisions over a wide range of public policy issues are made. Movement away from blanket restrictions that bring large, lasting and widespread costs, and towards measures targeted specifically at groups most at risk is now prudent. Such a policy should probably have been started before the end of June 2020.” said Professor David Miles

 

This paper presents a trial calculation on the costs and benefits arising from the lockdown and allows us to think more carefully about the difficult issues so raised.  On the one hand lockdowns limit and smooth the spread of this new virus but on the other they inflect economic and social costs.  Depending on who these costs and benefits fall and our attitude to the risk these sections of the population face, we can start to consider in what form lockdowns are worthwhile.”  said Jagjit Chadha, Director of NIESR.

 

 

ENDS

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Notes for editors:

The research reflects the authors’ views and does not necessarily reflect the views of the institutions that they may represent.

For queries for the authors  and full copy of the paper please contact the NIESR Press Office: press [at] niesr.ac.uk  / 07930 544631 / l.pieri [at] niesr.ac.uk

The National Institute Economic Review is a quarterly journal of NIESR. From 2020 the NIER is published by Cambridge University Press (CUP). Founded in 1534, CUP is the world's oldest publishing house and the second-largest university press in the world.

The Review is published in February, May, August and November, and it is available from Cambridge University Press at journals [at] cambridge.org    

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