Treasury ignored Oxford study warning that Eat Out ‘did not make economic sense’

Rishi Sunak’s team at His Majesty’s Treasury ignored a study from Oxford University warning that opening up restaurants like they did with Eat Out to Help Out in 2020 “did not make economic sense”, The Daily Telegraph can reveal.

The study found that opening customer-facing industries like hospitality would see deaths rise and have minimal impact on unemployment.

The better option, the data show, would be to focus on reopening non-customer-facing sectors such as construction and manufacturing while restaurants stay shut.

A first-of-its-kind model built at Oxford weighed up the impact on both the economy and the epidemic of various Covid reopening measures and the findings were shared with the Treasury and No 10 in May 2020.

Data showed that opening restaurants would see the number of infections rise and it would also be a worse option for the economy than opening factories and manufacturing.

Prof Doyne Farmer, Director of Complexity Economics at the Institute for New Economic Thinking at the University of Oxford, sent the study to Mike Webb, Special Adviser to Chancellor of the Exchequer and the Prime Minister, and Dominic Cummings, Boris Johnson’s Chief Adviser.

Economic output can be recovered

In emails between Mr Webb And Prof Farmer, seen by The Daily Telegraph, the academic says the model shows that keeping restaurants closed but opening factories achieves “a sweet spot” where the epidemic is not growing yet most of the economic output can be recovered.

He told The Daily Telegraph: “I had a correspondence with Dominic Cummings, who said he was very interested in what we are doing, and I sent our paper to him (and Michael Webb) before the first lockdown was relaxed.

“So when the Eat Out programme was announced, Cummings should have been well aware of our conclusion that this didn’t make economic sense. But of course we can’t say whether this was communicated to Boris Johnson or Rishi Sunak.”

Mr Cummings and Mr Webb both received the findings on May 8, 2020, with the full paper released that day as a pre-print. The findings were this week published in a peer-review journal.

The study, in the online scientific journal Nature Human Behaviour, found that opening manufacturing and construction would have caused just a 4 per cent increase in the death rate. However, it would reduce unemployment by more than a third (36 per cent).

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