Embargoed: 22:30, Thursday 18th July, 2024
Three years on from the lifting of the final lockdown measures in the United Kingdom on 19th July 2021, a landmark study by a campaign group of covid spending among comparable OECD nations has found that the UK was one of the worst performing out of the group, which includes the UK, Norway, Sweden, Japan, France, Germany and the United States.
This comes after the first report published by the covid-19 inquiry criticised the UK’s preparations for a pandemic in the build-up to March 2020. The TPA have estimated previously that this inquiry could cost over £196 million, making it the most expensive statutory inquiry ever.
The report, by the TaxPayers’ Alliance (TPA), found that the UK was one of the highest spenders as a percentage of GDP, was the highest spender on health measures and was above average in both “above the line” and “below the line” measures. Including off balance sheet costs, the UK spent over one third of its 2020 GDP on coronavirus measures. Yet the UK also had the third highest excess death rate, making it one of the least effective spenders in terms of limiting excess deaths.
UK government debt now stands at £2.7 trillion, which is greater than the size of the economy. The new chancellor, Rachel Reeves, has requested from civil servants an “assessment of the state of our spending inheritance” after warning that the new government were inheriting “the worst set of circumstances since the second world war.” This includes a tax burden which is now forecast to reach an 80 year high by 2028-29. Speaking to the Treasury committee in March, the former chancellor, Jeremy Hunt, said that the increase in the tax burden has been necessary “to pay down covid debt.” As the TPA’s report argues, however, when compared with other countries it can now be argued that the UK was landed “with far higher debt than was necessary.”
At the start of the pandemic, the TaxPayers’ Alliance called the initial extraordinary measures “justifiable” but warned that “given the government will be borrowing enormous sums on our behalf, the need for careful, prudent and well-targeted implementation is greater than ever. This money will eventually need to be paid back, and will be another legacy of this terrible crisis.”
CLICK HERE TO READ THE FULL REPORT
Key findings:
- As a percentage of GDP, the UK spent more than the United States, France, Norway and Sweden in response to the coronavirus pandemic.
- Including off balance sheet costs, the UK spent over one third of its 2020 GDP on coronavirus measures.
- Among the comparator countries, only the United States spent more as a percentage of GDP than the UK on above the line measures, which are direct spending measures such as health spending, with the UK spending almost ten percentage points more than France and over five percentage points more than the average in this spending area.
- The UK spent over two percentage points more of GDP than the average among the sample on below the line measures – these measures include equity injections, loans, asset purchases or debt assumptions. Only Japan and Germany spent more as a percentage of GDP in this area.
- While Germany, Japan and the UK spent similar amounts on non-health measures as a percentage of GDP, the UK spent over twice as much as these countries and more than all the other comparator countries on health sector measures.
- Sweden spent almost four times less as a percentage of GDP than the UK on their coronavirus response and saw around half as many excess deaths.
- The UK was one of the least efficient spenders on coronavirus when compared with excess deaths, with an average 109 excess deaths per 100,000, the third highest excess death rate in the sample.
- It is estimated that £4.5 billion will have been lost to error and fraud through the coronavirus support schemes, of which £3.5 billion was lost through the coronavirus job retention scheme, £1 billion on the self employed income support scheme and £71 million on the eat out to help out scheme.
CLICK HERE TO READ THE FULL REPORT
John O’Connell, chief executive of the TaxPayers' Alliance, said:
"The catastrophic state of the nation’s finances today can in part be traced back to the failings of governments in all parts of the UK during the pandemic.
“Despite warnings about the long-term impact on taxpayers if care wasn’t taken, politicians repeatedly reached for the lever of longer and harder lockdowns, accompanied by a tidal wave of taxpayer cash flooding every corner of the economy. Tragically, the UK underperformed at the task of saving lives despite these measures.
“All levels of government need to come to terms with the extent of the damage done by covid restrictions, while learning the lesson that throwing money at a problem is not the panacea that might be hoped for. Unfortunately it seems the covid inquiry is determined to say anything but that.”
TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
Media contact:
Elliot Keck
Head of Campaigns, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)
Notes to editors:
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Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
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TaxPayers' Alliance's advisory council.
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The TPA's full response to the announcement of the first lockdown in March 2020 can be found here.
- The TPA estimate that given the current spending trajectory of the UK covid-19 inquiry, the total cost of the inquiry could reach over £196 million, or £136,907 per day, making it the most expensive statutory inquiry ever using both metrics.