Covid tiers ‘will cost economy £900m a day’ as MPs threaten to vote against measures
COVID tiers could cost the economy £900million a day as Tory rebels threaten to stage a mutiny against the strict restrictions.
The fresh tier rules will come into play from Wednesday with more than 34million Brits facing tougher restrictions than before lockdown.
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Now a leading economic think-tank has warned the system will slash England’s gross domestic product by £900million a day.
This is a 13 per cent drop compared to last December, the analysis by the Centre for Economic and Business Research (CEBR) reveals.
The figures are based on the fact 31 per cent of England’s economy will be plunged into Tier 3 when lockdown lifts, The Telegraph reports.
And bans on indoor socialising and extra rules for pubs and restaurants will be slapped on 68 per cent of the population who fall under Tier 2.
Just three areas will be under the lowest Tier 1 restrictions – Cornwall, the Isle of Wight and the Isles of Scilly.
The CEBR predicted the daily loss in GDP for firms in Tier 3 is 20 per cent, while the loss in Tier 2 will be ten per cent.
Doug McWilliams, the CEBR’s deputy chairman, told the paper: “It remains to be seen whether those costs, which of course can’t take account of the longer term damage done to so many pubs, restaurants, sports and entertainments venues, is justified by the reduced incidence of the disease.
“My suspicion is that the shutdowns imposed by Whitehall will end up doing more economic damage than can be justified on medical grounds.”
The grim warning comes just days after Chancellor Rishi Sunak said the Covid pain had only just begun with this year’s virus bill hitting £280million.
Ministers had refused to reveal any details of the economic impact the new tier system could cause.
The Cabinet is now only outlining the cost to soften mounting backlash within Boris Johnson’s government.
The PM is facing the biggest rebellion in his premiership next week with up to 70 MPs considering whether to oppose the new rule laws.
Officials are trying to win round rebels who have threatened a mutiny ahead of the vote.
As part of the plan, sleepy villages and towns with low infection rates could be “decoupled” from Covid hotspots in Tiers 2 and 3.
Five regions across the nation will jump from Tier 1 straight up to 3 after cases in some parts of their areas shot up.
But the scheme would mean MPs in some areas “unfairly” dragged into Tiers 2 and 3 will be offered the chance to breakaway if their infection rates are low.
It would come into effect when the tier review is carried out in mid-December with Matt Hancock among ministers who has discussed the idea with backbenchers.
Tory MPs in Kent are already said to be locked in discussions with the government over the plans after the whole county was plunged into the strictest Tier 3 restrictions.
Ashford in Kent was one of the areas that leapt from Tier 1 to Tier 3 on Thursday when the new system was announced.
But it’s had just 165 cases in the last week – resulting in a rate per 100,000 of 126.9.
Tunbridge Wells also fell victim to the new rules despite having only 140 cases in the last seven days.
While Bath in North East Somerset has jumped from Tier 1 to Tier 2 thanks to its neighbour Bristol, where cases have risen.
But Michael Gove warned today every hospital in England could be overwhelmed with Covid cases if new tier restrictions are blocked by MPs.
Writing in today Times, he urged would-be rebels to “take responsibility for difficult decisions” necessary to stop the NHS being “physically overwhelmed”.
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“Every bed, every ward occupied,” he said.
“All the capacity built in the Nightingales and requisitioned from the private sector too.
“The number infected with Covid-19 and requiring a bed would displace all but emergency cases, and then even those.”