Recommendations & Conclusions
21 items
1
Conclusion
Eighth Report: Economic impact of coron…
Accepted
In the first half of this year the UK suffered its worst recession in modern history. The latest GDP figures suggest a bounce back has begun. But the path of the economy does not only depend on the course of the virus and Government restrictions or lockdowns, but on how …
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In the first half of this year the UK suffered its worst recession in modern history. The latest GDP figures suggest a bounce back has begun. But the path of the economy does not only depend on the course of the virus and Government restrictions or lockdowns, but on how the population views the risk from the virus and their job security, and how that in turn impacts on consumer and business confidence. Combatting the virus is an economic as well as a health priority.
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Government response AI summary
The government acknowledges the committee's observation by outlining the extensive ongoing support packages, including extending the Coronavirus Job Retention Scheme and various loan schemes, stating that protecting jobs and livelihoods has been its economic priority.
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HM Treasury
2
Conclusion
Eighth Report: Economic impact of coron…
Accepted
Consumption is returning following the lifting of Government restrictions. However, continued consumer caution around re-engaging with the economy, the prospect of more localised outbreaks and a second wave are dampening a full recovery to pre- pandemic levels of consumer spending. The Government has to contain the virus as best it …
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Consumption is returning following the lifting of Government restrictions. However, continued consumer caution around re-engaging with the economy, the prospect of more localised outbreaks and a second wave are dampening a full recovery to pre- pandemic levels of consumer spending. The Government has to contain the virus as best it can, but at the same time it has to boost consumer confidence and job security without causing the virus to spread—this is a difficult balancing act. The outlook for the economy remains exceptionally uncertain. Some level of economic scarring is now almost certain.
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Government response AI summary
The government acknowledges the report and details its ongoing economic priority to protect jobs and livelihoods through over £200 billion in support. It outlines extensions to schemes like the Coronavirus Job Retention Scheme until March 2021 and various loan schemes until January 2021, along with …
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HM Treasury
4
Conclusion
Eighth Report: Economic impact of coron…
Accepted
We believe the Chancellor was right to start measures to combat long term unemployment in July. Rising unemployment becoming structural and permanent is a critical risk arising from the crisis.
Government response AI summary
The government highlighted the successful implementation of the Kickstart scheme, detailing the vital role of almost 500 registered gateway organisations in assisting smaller employers. They committed to continuing to respond and adapt the scheme to ensure maximum impact for employers and young people.
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HM Treasury
6
Recommendation
Eighth Report: Economic impact of coron…
Accepted
A large proportion of businesses in sectors such as hospitality and leisure that are suffering most from social distancing may still have a viable long-term future at the end of October. It is not clear to us that the Job Retention Bonus, which all businesses are eligible for, is value …
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A large proportion of businesses in sectors such as hospitality and leisure that are suffering most from social distancing may still have a viable long-term future at the end of October. It is not clear to us that the Job Retention Bonus, which all businesses are eligible for, is value for money, given that most of the funds will be spent on workers who would be retained anyway. The Chancellor needs to carefully consider whether a targeted extension of the CJRS and/or other targeted support measures might be required and to explain his conclusion. (Paragraph 60) Economic impact of coronavirus: the challenges of recovery 55
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Government response AI summary
The government extended the Coronavirus Job Retention Scheme until March 2021 and introduced new targeted grants of up to £3,000 per month for businesses forced to close due to new restrictions. They also provided backdated grants for hospitality/leisure sectors and £1.1 billion funding to local …
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HM Treasury
7
Recommendation
Eighth Report: Economic impact of coron…
Accepted
It is vital that workers made redundant have the opportunity to reskill. We heard evidence that the poor reputation of schemes in the 1980s actually reduced participants’ employment prospects. Even though the Treasury is unlikely to be responsible for delivering vocational or reskilling schemes, given the role of these schemes …
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It is vital that workers made redundant have the opportunity to reskill. We heard evidence that the poor reputation of schemes in the 1980s actually reduced participants’ employment prospects. Even though the Treasury is unlikely to be responsible for delivering vocational or reskilling schemes, given the role of these schemes in reducing long term unemployment, we recommend that the Treasury ensures that their quality and reputation is monitored. We recommend an evaluation of these schemes every six months afterwards to assess whether they genuinely increase job prospects.
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Government response AI summary
The government agreed with the recommendation to monitor and evaluate reskilling schemes, committing to establish a framework for gathering evidence and evaluating programmes as part of the Spending Review process.
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HM Treasury
8
Conclusion
Eighth Report: Economic impact of coron…
Accepted
The Government also needs to make sure that the requirement for employers interested in offering fewer than 30 Kickstart roles to apply through a representative organisation does not make the scheme inaccessible to SMEs and charities.
Government response AI summary
The government highlights that gateway organisations are already in place and play a vital role in making the Kickstart scheme accessible to smaller employers, with DWP having implemented a new registration system. They state a commitment to continue adapting the scheme for maximum impact.
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HM Treasury
11
Conclusion
Eighth Report: Economic impact of coron…
Accepted
It remains unclear how the Government expects businesses to pay back loans in the future. The crisis and the lockdown of the economy meant that businesses have largely forgone revenue which many are unlikely to make up in the future and revenue is also likely to be suppressed in some …
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It remains unclear how the Government expects businesses to pay back loans in the future. The crisis and the lockdown of the economy meant that businesses have largely forgone revenue which many are unlikely to make up in the future and revenue is also likely to be suppressed in some sectors for some time.
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Government response AI summary
The government responded by detailing the Pay as you Grow initiative, which offers businesses flexibility in repaying Bounce Back Loans, including extended repayment terms up to 10 years, interest-only options, or payment pauses.
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HM Treasury
16
Recommendation
Eighth Report: Economic impact of coron…
Accepted
In order to prevent “levelling up” becoming an empty slogan, the Government should produce a strategy underpinning it that defines clear objectives and includes the indicators it will use to gauge success at the next fiscal event. The Government needs to clarify whether it is planning to close the productivity …
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In order to prevent “levelling up” becoming an empty slogan, the Government should produce a strategy underpinning it that defines clear objectives and includes the indicators it will use to gauge success at the next fiscal event. The Government needs to clarify whether it is planning to close the productivity gap, the income gap, the gap in health outcomes, the gap in educational outcomes or all of these. It also needs to define the strategies it will use to close different imbalances: strategies to close productivity gaps may well be different to those aimed to close income gaps or those gaps in health outcomes.
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Government response AI summary
The government is committed to levelling up and is currently developing a new Public Value Framework to link departmental spending to outcomes, defining medium- to long-term priority outcomes and metrics for success, as announced at Budget 2020. They are also reviewing the Green Book and …
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HM Treasury
19
Recommendation
Eighth Report: Economic impact of coron…
Accepted
We call on the Government to throw its diplomatic weight behind the global community in investing in public health systems in developing countries; ensuring that testing, treatment and a vaccine when developed is made as widely available Economic impact of coronavirus: the challenges of recovery 57 as possible to emerging …
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We call on the Government to throw its diplomatic weight behind the global community in investing in public health systems in developing countries; ensuring that testing, treatment and a vaccine when developed is made as widely available Economic impact of coronavirus: the challenges of recovery 57 as possible to emerging economies. The Government should also consider increasing the resources available to the International Monetary Fund, should it be needed to maintain countries’ international financing in the event of renewed market turbulence or further waves of the virus. (Paragraph 153) Overall approach
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Government response AI summary
The government confirms support for vulnerable countries with over £1 billion aid, championed the Debt Service Suspension Initiative, committed £150 million to the IMF's CCRT, pledged a £2.2 billion loan to the PRGT, and committed £1 billion for global COVID-19 vaccine access for low and …
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HM Treasury
28
Recommendation
Eighth Report: Economic impact of coron…
Accepted
The Treasury should consider whether Government intervention is required to support the insurance industry in finding a solution for pandemic insurance cover; and whether such support would be an effective use of public money. We also recommend that the Treasury investigates whether it needs to mitigate the risk of insolvencies …
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The Treasury should consider whether Government intervention is required to support the insurance industry in finding a solution for pandemic insurance cover; and whether such support would be an effective use of public money. We also recommend that the Treasury investigates whether it needs to mitigate the risk of insolvencies in the insurance sector, should the Court’s ruling find in favour of policyholders.
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Government response AI summary
The Treasury is actively working with insurers and regulators to understand future pandemic insurance needs and to learn lessons. It also remains in close contact with the Prudential Regulation Authority to monitor the solvency of the insurance sector and will take all necessary steps to …
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HM Treasury
2
Recommendation
Eleventh Report - Economic impact of co…
Accepted
We recommend that the Treasury and the Office for Budget Responsibility provide a commentary at the time of the Budget on GDP measurement issues and the implications that these measurement issues have for comparisons between the UK and other countries. (Paragraph 17) Gaps in support
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We recommend that the Treasury and the Office for Budget Responsibility provide a commentary at the time of the Budget on GDP measurement issues and the implications that these measurement issues have for comparisons between the UK and other countries. (Paragraph 17) Gaps in support
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Government response AI summary
The government accepted the recommendation, stating that it had already provided a commentary on GDP measurement issues and international comparisons in pages 11 and 12 of the Budget document.
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HM Treasury
3
Conclusion
Eleventh Report - Economic impact of co…
Accepted
Given the economic outlook, we believe that the Government was right to extend both the Coronavirus Job Retention Scheme and the Self-employment Income Support Scheme to the end of April 2021. However, given the extended duration of restrictions, we believe the Government was wrong not to address gaps in support.
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Given the economic outlook, we believe that the Government was right to extend both the Coronavirus Job Retention Scheme and the Self-employment Income Support Scheme to the end of April 2021. However, given the extended duration of restrictions, we believe the Government was wrong not to address gaps in support.
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Government response AI summary
The government stated it had already extended the CJRS and SEISS until September, beyond the April 2021 date mentioned, to address the ongoing economic challenges, highlighting the schemes' success and reach.
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HM Treasury
4
Recommendation
Eleventh Report - Economic impact of co…
Accepted
The 2019–20 self-assessment income tax returns will provide the Government with additional information that could allow it to provide support to those who need it but have so far not received it. We therefore strongly urge the Treasury to use the data from 2019–20 tax returns to help the newly …
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The 2019–20 self-assessment income tax returns will provide the Government with additional information that could allow it to provide support to those who need it but have so far not received it. We therefore strongly urge the Treasury to use the data from 2019–20 tax returns to help the newly self-employed who missed out on previous support. In order to ensure that this group is helped as quickly as possible, we recommend that HMRC prioritises work on analysing the 2019–20 tax returns.
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Government response AI summary
The government accepted the recommendation, announcing that HMRC will use 2019-20 tax returns for the fourth and fifth SEISS grants, potentially allowing over 600,000 newly self-employed individuals to claim support.
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HM Treasury
6
Recommendation
Eleventh Report - Economic impact of co…
Accepted
When responding to this report, the Treasury should provide an assessment of the level of fraud which it believes would arise from the implementation of the DISS scheme.
Government response AI summary
The government provided a draft assessment indicating that the DISS scheme could have a wide error and fraud range, potentially as high as 20%.
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HM Treasury
15
Conclusion
Eleventh Report - Economic impact of co…
Accepted
We are disappointed at the lack of analysis provided by the Treasury, despite such analysis being referenced in the SAGE minutes. Without it, the impression is that the Government is making important decisions without proper regard to all their impacts, both on health and the economy. The lack of such …
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We are disappointed at the lack of analysis provided by the Treasury, despite such analysis being referenced in the SAGE minutes. Without it, the impression is that the Government is making important decisions without proper regard to all their impacts, both on health and the economy. The lack of such analysis also prevents the public from understanding in full the basis for, and impact of, the restrictions imposed upon them.
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Government response AI summary
The government acknowledges the concern about economic analysis and asserts that it has published a significant amount of analysis on the health, economic, and social impacts of COVID-19, including analysis underpinning the Roadmap out of lockdown, and has commissioned advice from SAGE.
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HM Treasury
16
Recommendation
Eleventh Report - Economic impact of co…
Accepted
We call on the Treasury to be more transparent about the economic analysis which it undertakes to inform Government decisions in the fight against coronavirus and to publish any such analysis in a timely manner. The House should not be asked to take a view on proposals which have far-reaching …
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We call on the Treasury to be more transparent about the economic analysis which it undertakes to inform Government decisions in the fight against coronavirus and to publish any such analysis in a timely manner. The House should not be asked to take a view on proposals which have far-reaching consequences for the general population, such as those involving restrictions on social interaction, education, movement and work, without the support of appropriate and comprehensive economic analysis.
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Government response AI summary
The government claims it has already published a significant amount of analysis on the health, economic, and social impacts of COVID-19 and public health measures, including for the Roadmap, and commissioned advice from SAGE.
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HM Treasury
19
Recommendation
Eleventh Report - Economic impact of co…
Accepted
We strongly urge the Treasury to provide rigorous analysis of future policy choices which quantifies the harms and benefits of each of the plausible range of alternative policies. It has always been considered a good practice to publish an impact assessment for every measure that the Government proposes.
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We strongly urge the Treasury to provide rigorous analysis of future policy choices which quantifies the harms and benefits of each of the plausible range of alternative policies. It has always been considered a good practice to publish an impact assessment for every measure that the Government proposes.
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Government response AI summary
The government states it has already taken decisions based on health, economic, and social impacts, studied academic literature, and published significant analysis throughout the pandemic, including for the Roadmap.
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HM Treasury
20
Conclusion
Eleventh Report - Economic impact of co…
Accepted
While death rates from coronavirus are high, the rationale for Government decisions on social restrictions is well understood by the public. As the vaccines roll-out proceeds and death rates fall, Government decisions on whether or not to lift restrictions will become more finely balanced. We believe that economic analysis and …
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While death rates from coronavirus are high, the rationale for Government decisions on social restrictions is well understood by the public. As the vaccines roll-out proceeds and death rates fall, Government decisions on whether or not to lift restrictions will become more finely balanced. We believe that economic analysis and modelling is essential to inform those decisions, alongside evidence of the other necessary infrastructure such as test, trace and isolate, and responses to new variants, being comprehensive and in place to mitigate against the need for a further lockdown. (Paragraph 105) 36 Economic impact of coronavirus: gaps in support and economic analysis
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Government response AI summary
The government asserts that it already makes decisions based on the health, economic, and social impacts of COVID-19, utilizing academic literature and SAGE advice to inform its policies and the Roadmap out of lockdown.
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HM Treasury
21
Conclusion
Eleventh Report - Economic impact of co…
Accepted
After almost a year of restrictions on social and economic activity, the general public and the business sector need confidence that the Government has as clear and as certain a route out of the crisis as possible.
Government response AI summary
The government states that since the report, it has published its roadmap for the economy's cautious reopening and announced the Budget, which together aim to provide the necessary security and certainty to the public and businesses.
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HM Treasury
22
Recommendation
Eleventh Report - Economic impact of co…
Accepted
We recommend that in order to provide some certainty to businesses, as well as to the general public, the forthcoming Government plan for taking the country out of lockdown should set out criteria of how and when it will lift restrictions— this could be in terms of the prevalence and …
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We recommend that in order to provide some certainty to businesses, as well as to the general public, the forthcoming Government plan for taking the country out of lockdown should set out criteria of how and when it will lift restrictions— this could be in terms of the prevalence and R rate of the virus. We recognise that this would be a contingent plan, based on the stages only being activated after milestones are met, with the Government providing the maximum possible certainty. Alongside this plan, the Treasury should also provide the combined economic and epidemiological modelling to support it, and show how it would best optimise health and economic outcomes.
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Government response AI summary
The government states that since the report, it has published its roadmap for reopening the economy, fulfilling the recommendation to provide a plan for lifting restrictions, and also announced the Budget for economic support.
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HM Treasury
23
Recommendation
Eleventh Report - Economic impact of co…
Accepted
It is vital that economists work together with epidemiologists and health experts to make decisions on social restrictions, and that the output of their work should be made public. We propose that the Government use a more multi-disciplinary approach to examine the health and economic costs of social restrictions without …
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It is vital that economists work together with epidemiologists and health experts to make decisions on social restrictions, and that the output of their work should be made public. We propose that the Government use a more multi-disciplinary approach to examine the health and economic costs of social restrictions without delay, and we recommend that the Government should put more information in the public domain as to how economic and health factors have been taken into consideration regarding Government decisions on social restrictions. How the Government made decisions on social restrictions is an area that might be expected to come under further review in any future public inquiry into the Government’s effectiveness in combating coronavirus.
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Government response AI summary
The government states it has already taken decisions based on multi-disciplinary factors (health, economic, social) and published significant analysis, including commissioning SAGE advice, to inform its COVID-19 response.
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HM Treasury