The advice from the Resolution Foundation comes after the chancellor confirmed that the government scheme would continue for a further 4 months - as lockdown restrictions in England begin to ease.
Peter Robertson from the University of Western Australia looks at the costs of lockdown.
Sputnik: How long can a lockdown and elements of a lockdown realistically go on for?
Peter Robertson: In Australia, the costs have been calculated around about 1% of GDP per month and so each month of lockdown you're accumulating that. After 12 months you would have spent 12% of GDP or lost 12% in GDP. So, then you got to compare that kind of accumulative risk with the costs, potential costs of deaths or fatalities from COVID-19, which are unknown but you can put a range of value on those sorts of costs as well. When you do that kind of calculus it quickly becomes clear that lockdowns for seven or eight months or so are very expensive in terms of the unemployment costs, the IO capital, but also accumulating social pressure, social costs, mental health and so forth.
Sputnik: What impact would a further 6 months of lockdown have on the UK economy?
Peter Robertson: People are going to be out of work for a long time - you're going to have those border controls for a long time. Economic unemployment is associated with increased suicide and mental health issues as well, so you've got to be aware of the kind of strains that you're putting on society for a long time like that. It would depend on what the kind of promises and guarantees were about an outcome. People would respond better if they have some certainty or plan so they know what the government's aims are. Right now, of course, what you are doing with lockdown is buying some time because there's a lot we don't understand about the virus and the way it spreads, and also infection fatality rates, and also the number of people who might have had it who had no symptoms. There's a lot we can learn about just dealing with the practical issues of life support and also buying time to build up capacity and health systems deal to all those things. There's a lot of good reasons to maintain the sort of social distancing measures and lockdowns for some time but it will depend on how much information is forthcoming over the next few months. Going out for six months I think that'd be a huge economic cost on the UK economy as well as the Australian economy.
Sputnik: What kind of exit strategy and additional policy should be introduced alongside lockdown measures and furloughing?
Peter Robertson: It may be different in the UK compared to Australia. In Australia, the caseload is very, very low and it's nothing like the sort of numbers of infections you have in the UK, and so probably sooner rather than later here, I think it's possible to start experimenting a little bit with going back to work and letting some sports competitions run, which gives some people something to do on weekend. In the workplace themselves, you can have shift work, you can extend hours, you can still enforce social distancing in the workplace. There's a lot of practical things you could do to allow people to get back into the workforce while still maintaining a high level of an overview about the sort of potential for coronavirus spread. The other important thing is protecting the elderly. Making sure you've got good systems around entry and exit into old people's homes, making sure that people living by themselves have got access and don't have to come out along with co-morbidities so that you're looking after people who are cancer victims, people who are other diabetes problems and so forth, it will have to be sort of factored into the equation behaviour to keep them safe in society than having a more regular work kind of schedule.
