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Will the economy suffer a ‘lockdown by stealth’?

Written by: Emma Lunn
The Confederation of British Industry (CBI) has warned the government about ‘unintended consequences of restrictions to the economy’ as infections from the Omicron variant continue to rise.

The CBI is urging the government to promote mask wearing and daily testing, as well as the booster, vaccine, to ensure the UK doesn’t oscillate towards a lockdown by stealth. The trade body has raised concerns that while working from home advice is the right action to take at this point, it should end immediately when deemed safe to do so.

Tony Danker, CBI director-general, said: “The economy should remain as open as is feasibly safe to do so in the coming weeks. The bar should be high when it comes to any new restrictions on economic activity beyond Plan B. More effort must go into promoting actions that can build confidence and protect public health, like daily contact testing and mask wearing.

“The government rightly must act when new data comes to light. But we are concerned that the rhetoric from some in government risks instilling a lockdown mentality when in actual fact the proposed measures are far short of that. The result is a double whammy to firms who see demand fall without any commensurate support. We must beware unintended consequences to the economy from new restrictions.”

Danker urged the government to make it clearer what is aiming for in terms of economic activity and how it will enable that to happen, adding that the current communication is causing ‘confusion and anxiety’. It also suggested the government review border restrictions, given the evidence of significant community transmission of Omicron.

The CBI said that hybrid and flexible working bring many benefits but having working from home as a go-to Covid secure measure brings significant economic cost with it.

Danker said: “Some economic activity is displaced to local areas, but it also leaves our town and city centres under real strain for retailers and hospitality. WFH in practice meaningfully restricts trade for some businesses and impacts mental health too.

“With the push for a booster rollout by the end of the year, the government should use the 5th January review to identify a new regime drawing on testing, covid secure workplaces and antivirals, to outline its intention for ending the push to work from home.”

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