This scenario alone produces a £66bn “loss” from the lockdown, but under more realistic outcomes for fatalities, the costs outweigh benefits even more heavily. If there were an extra 50,000 lives saved under the scenario for a 9pc growth hit, then the weighing scales show an £185bn reverse.
In more pessimistic but plausible growth scenarios, such as a 15pc decline this year – that cost of 50,000 lives saved soars to £315bn. As Miles puts it, the cost is “far in excess (generally by a factor of at least three and often by a factor of 10 or more)” of that considered acceptable for health treatments in the UK”.
It follows that the clear path ahead for ministers is the rapid reopening of as much of the economy as possible. Under the paper’s proposals for reopening, even the most pessimistic scenarios for the renewed spread of the disease where the R-rate moves above one and stays there, the excess deaths – judged by the Nice criteria – add up to £14bn over three months, against a £100bn benefit from the reopening of the economy.
He is far from alone among economists in worrying about the highly disproportionate costs of lockdown. The University of Texas’s Oliver Coibion compared households in the US under such restrictions against those without, and found those under lockdown are, unsurprisingly, more likely to be unemployed, and less likely to be spending on big ticket items over the next 12 months.
His results show a “persistent drop in future aggregate demand, possibly due to a mix of lower expected income, heightened uncertainty, and supply restrictions” as well as higher precautionary savings. “Our estimates suggest that this economic catastrophe can be largely accounted for by lockdowns,” he writes.