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Keir Starmer 'right' to call for lockdown exit plan, says free market think thank

Keir Starmer 'right' to call for lockdown exit plan, says free market think thank

Keir Starmer has called on ministers to set out their lockdown strategy

3 min read

Keir Starmer is "right" to call on ministers to urgently publish their lockdown exit strategy, a free market think tank has said.

The Adam Smith Institute (ASI) accused ministers of being "too optimistic" about the financial impact of the pandemic as they called for a plan to "unwind the mess".

It comes after Mr Starmer, the Labour leader, said the Government should this week publish its "principles and approach" for ending the lockdown so people could "see light at the end of the tunnel".

In a new report, the think tank compared the spread of the economic impact to the virus, saying each business that was allowed to fail increased the risk for other firms.

"The impact of the lockdown grows deeper and faster over time, with each business that closes causing knock-on issues for their staff, suppliers and customers, shareholders and creditors," the institute said.

"The more businesses that fail, the more in turn come at risk and pass their risk onto others — just like how a virus can multiply through a population."

The ASI added: "Keir Starmer is right, Britain needs to know the plan for how the government will reopen the economy at the end of this crisis."

Meanwhile, the group warned that analysis carried out by the Office for Budget Responsbility, which "assumed no lasting economic hit" from the pandemic, had "significantly understimated" the potential impact on businesses.

Dr Eamonn Butler, director of the ASI, said: "The dislocation that is ripping through the economy because of lockdown is like the virus ripping through the population.

"Each business failure produces many more, just as each infected person infects many more.

"Unless you get to grips with it fast, things soon escalate out of control. Business failures, bankruptcies and unemployment rocket. So we have to lay plans for how we are going to unwind the lockdown, and do it now.”

Ministers have insisted that any plan for exiting the lockdown would be directed by the government's top medical advisers, but said discussing the plans before reaching the peak of the outbreak risked confusing the public.

But the group urged the government to set out the clinical evidence "not only so that people know why the economic pain must be endured, but to allow debate on how much economic pain should be endured in return for the clinical benefits."

Matthew Lesh, Head of Research at the ASI, added: "The limbo must come to an end. The closure of one-third of the economy has been necessary to slow the spread and protect the health service - but it cannot last forever.

"We need a route out of this mess: a strategy to protect from this virus while allowing life to progressively return to normal."

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