18 December 2025

(10.00 am)

Lady Hallett: Right. We begin the closing submissions.

Mr Block, I think you’re up first. Closing statement on behalf of His Majesty’s Treasury by MR

Block KC

Mr Block: Good morning, my Lady. My Lady, these are the oral closing submissions on behalf of His Majesty’s Treasury.

Lady Hallett: Just before you continue, I wonder if I can just ask Mr Wright to move to his left.

Sorry about that. Thank you.

Mr Block: Thank you.

My Lady, to be supplemented with written submissions by the deadline date in January.

My Lady, standing back today, nearly six years since the pandemic began, and with the very large amount of hindsight that that passage of time affords, there can be no doubt that the government’s economic response to the Covid-19 pandemic, led by the Treasury, is a positive story in the context of the pandemic.

The Covid-19 pandemic was, first and foremost, a public health crisis which required the country to take unprecedented measures to try to contain the deadly virus and save lives, but the consequences of the Covid-19 pandemic extended beyond health.

This was a health crisis which had immediate and unprecedented economic consequences, both for the country generally and for individuals and families across the country. Those economic consequences also brought with them very real dangers to individual lives and livelihoods, as well as to the nation as a whole.

My Lady, with unprecedented speed and on an unprecedented scale, the United Kingdom Government put in place a package of economic support that was among the largest and most comprehensive globally. The range of support provided was vast, and only some elements of it have been considered during the time available in these hearings.

As the Trades Union Congress, the CBI, FSB and UKHospitality and perhaps others have acknowledged during the course of this module, this economic support directly prevented the loss of millions of jobs and the closure of thousands of businesses and, as Dr Kate Bell from the TUC said, saved millions of livelihoods.

Crucially, the financial support package also enabled people to comply with the broader restrictions imposed on society, and therefore played a critical role in the government’s wider response to this public health crisis.

As a number of witnesses have described, this was made possible by the dedication and hard work of a large number of civil servants, whom you’ve described on Tuesday as being among the unsung heroes, working in very difficult conditions, as well as the ability of the Treasury corporately to act swiftly and with agility to respond to a fast-changing situation.

This was well demonstrated at the start of the pandemic by the budget announced on 11 March 2020, against the backdrop of emerging and fast-changing scientific advice in late February and early March 2020. After quickly standing up a central coordinating team and moving resource around to cover key areas within the Treasury, a very substantial range of Covid-related support measures were designed, prepared and announced within only a matter of days.

Throughout the pandemic, the Treasury ensured the provision of economic support was responsive to emerging understanding of the virus and, in lockstep with the evolving public health measures, making a vital contribution to public compliance with the health restrictions, the exit from lockdown, and the country’s recovery generally.

As James Benford highlighted in his evidence, the 2021 roadmap is a particularly successful and impressive example of both that and of cross-government collaboration.

As we explained in our opening submissions, and Mr Sunak emphasised, the response to the Covid pandemic was unique because it involved, by shutting down businesses and making people ‘Stay at Home’, the intentional suppression of economic activity. It was vitally important that support measures did not inadvertently slow down recovery once restrictions eased. Striking the right balance, providing support when economic activity was not possible, whilst also allowing businesses and individuals to transition out of reliance on government interventions as conditions improved, was central to the economic response.

Dr Leunig explained clearly in his evidence, by reference to furlough, the clear benefits in this regard of maintaining the link between employer and employee until conditions enabled them to go back to work.

The debates with witnesses on decisions made, for example, whether it was right to end furlough in September 2021 or whether it should have been ended in July of that year, or left to run a little longer, highlight the fact that these were ultimately difficult judgement calls on which, as Mr Sunak reflected on a number of occasions, reasonable people can disagree.

No one, however, has been able to establish that they were wrong.

The policy approach of the Treasury and the Chancellor also mitigated longer-term economic damage or scarring, a term that the Inquiry will now be very familiar with, by providing the conditions for people and businesses to return to normal as swiftly as possible.

As Mr Sunak explained, this was a central objective in the economic response. Whether through the provision of a Bounce Bank Loan to a small business, or a guarantee on a £2 billion loan to one of the United Kingdom’s most important manufacturing companies, businesses were kept afloat and job losses were avoided, meaning the longer-term damage to the economy overall was not as bad as it otherwise would have been.

As Sir Charles Roxburgh explained, the risk of permanent scarring increases the longer people stay out of the workforce, compounding the difficulty of the decisions to be made.

The positive aspects to this economic response, and there are very many indeed, should not be ignored and we are particularly grateful to Mr Wright, King’s Counsel, for the balanced approach in his questioning.

First, it’s important that these successes are highlighted publicly so that the public can understand what went well, and have confidence in the state. There’s a parallel here with what Mr Sunak explained as the need to provide reassurance to the public.

And second, as Sir Charles Roxburgh explained so clearly at the end of his evidence, lessons should be learnt from what went well during the pandemic as well as from what could have been done better. That’s essential to ensure the country is as well prepared as possible for future crises.

Briefly turning to the support schemes and interventions. The range of interventions and support schemes across all sectors of the economy was vast. The Inquiry has understandably focused on a selection of the larger ones in these hearings. The Treasury’s written evidence provides a more comprehensive overview.

But, my Lady, for example, little has been said about the deferment of Income Tax and VAT payments for businesses and the self-employed for up to a year, and that was of great assistance, in particular to those businesses and individuals who didn’t qualify for other interventions or schemes.

My Lady, the Bar being one of those.

The schemes were focused on outcomes rather than process and were high impact, as the statistics around numbers of scheme claims and the amount of support show. As Sir Charles Roxburgh explained, the biggest risk was in not acting fast. As he said, “perfection is not a relevant standard in a crisis”.

The decision to roll out schemes quickly and then iterate and develop them, addressing gaps and shortcomings as they emerged, was clearly proven to be the right one. This is perhaps most clearly visible in relation to the loan schemes which deliberately prioritised getting money to those who needed it fast.

As Mr Sunak emphasised, the fraud and error risks were well known in advance, and factored into decision making. There was ultimately an unavoidable trade-off between speed of delivery and risk of fraud and error.

As the Inquiry has heard, a number of developments since the pandemic mean that that trade-off may not be as acute in the future, but it is inevitable that it will arise in some form.

It’s not the case, however, that no counter-fraud measures were taken. As Mr Sunak explained: whilst no fraud is acceptable, the level of fraud in the economic support schemes during the pandemic was in fact no greater than the estimates in relation to many government programmes in peacetime.

The policy objectives for these schemes obviously varied. However, whilst refinements and adjustments were made in light of real-time experience and feedback, it’s clear that the overall policy design was a success. In their evidence, Mr Sunak and Dr Leunig explained clearly why alternative models or approaches would not, in their opinion, have worked or been desirable.

For example you will recall the “helicopter money” approach adopted in the United States of America, and more sector-specific types of targeted economic support, which immediately run into difficulties with supply chain issues and other complexities.

As we’ve heard, the absence of tighter targeting was not through a lack of trying on the Treasury’s part; it was given extensive consideration and some means were developed for targeting broad schemes, such as the tapered furlough, which, as Dr Leunig explained, preserved the economic incentive for firms to resume activity where possible.

My Lady, there’s extensive data proving the success of the support provided to businesses and individuals, including from the Inquiry’s expert, Dr Brewer, and we will set that out in detail in our written closing submissions. But by way of headlines, though, millions of jobs and hundreds of thousands of businesses were saved by CJRS and loans, and tens of billions of pounds in value was added to the economy through the loan schemes. SEISS alone paid out more than 10 million grants to nearly 3 million people.

On a human level, the Inquiry’s impact video at the outset of this module provided a snapshot of how critical this support was to businesses and individuals. As Sir Charles Roxburgh said, there were 1.5 million people like Matthew.

In the course of the hearings, issues were raised by the Disabled groups, the Long Covid Groups, and the Child Poverty Action Group, around the extent to which specific needs of particularly vulnerable groups in society were factored into the design of the economic interventions.

As the Inquiry has acknowledged, care will be needed here. Many of the concerns and criticisms expressed are not, in fact, specific to the economic response to the pandemic. They reflect broader perspectives and concerns about the overall adequacy of the welfare safety net, both during Covid and more generally. Whilst those concerns are important, as you and as the Inquiry has made clear, they do not fall to be addressed by this Inquiry.

The vulnerabilities of particular groups, particularly in relation to employment, were, however, well understood by the Treasury, and as Mr Sunak made clear in his oral evidence, consideration was always given to these groups.

There was a suite of support available with the backstop of the local authority hardship funds. The Kickstart programme is a good example of positive action to support the particular employment needs of young people during the pandemic. Each piece of economic policy advice included and factored in equality impact assessment, but as Sir Charles Roxburgh explained, by preventing avoidable business failure and preventing unnecessary job losses, the Treasury did the best thing that could be done for disabled and otherwise vulnerable people who may find it harder to re-enter the workforce.

As Mr Sunak referenced in his evidence, and as the Inquiry’s expert Dr Brewer set out in his report, the measured metrics establish that living standards were protected, poverty was in fact reduced, and the most vulnerable were most protected during the pandemic. Again, we will address this in more detail in our written closing.

My Lady, if I may turn to, briefly, some themes of institutional criticism that have been made. We’ll address these in more detail in our written closing. Our overarching response is that the Inquiry should focus on outcome and not on this often very subjective, and we say often misinformed, criticism.

The first heading under criticism: transparency and engagement with others in government.

Counsel to the Inquiry has properly recognised, when questioning witnesses, that there are often very good reasons why the Treasury needs to be careful around sharing its data and analysis. As Mr Benford explained in his oral evidence, each major change to the restrictions was a fiscal event in himself, and this presented additional challenges.

This does not mean that the Treasury did not share its analysis. Indeed, it was Mr Harrison’s evidence that the best and most balanced analysis was produced when the Treasury was most involved and Sir Charles Roxburgh was clear that information was shared with those who needed to know.

In short, a successful economic response to a crisis such as this one would not have been possible without constructive and effective cross-government working. The evidence from those in other government departments and outside government clearly establishes that the Treasury worked openly and collaboratively. In this respect, the Inquiry has received overwhelmingly positive evidence from, amongst others, the then Prime Minister; Lord Sharma, who was then the Secretary of State in BEIS; and Lady Coffey who was then Secretary of State at the DWP; as well as from Andrew Bailey, the Bank of England governor; and the British Business Bank.

The successful design and delivery of the economic interventions would not have been possible without these positive and constructive relationships.

The Treasury also engaged extensively with external experts and institutions, such as the OBR, the IMF, and the OECD, utilising their analysis to inform policy, and my Lady, Mr Sunak described to you the extensive liaison with other countries as the world sought to respond to this unprecedented health crisis. And as highlighted by him, the fact that a particular individual was not “in the room” or not aware of certain matters, is not evidence that there was not a reasonable level of consultation.

Analysis and data science: the Treasury relied on a very wide range of analytical tools, including established and new economic models, to try to understand what was happening in the economy and inform policy development.

The Module 9 witness statement of Vanessa MacDougall, who was Director of the Treasury’s economics group in 2020, provides invaluable detail regarding the Treasury’s approach to data analysis and modelling, and will help the Inquiry to understand why the limited external criticism of the Treasury’s modelling capabilities is misplaced.

The Treasury has of course continued to develop its analytical and modelling capabilities, including working with the newly established Joint Data and Analysis Centre in the Cabinet Office, and continues to build its modelling capabilities supported by academic engagement. We’ll address modelling in more detail in our written closing, but we do note, my Lady, that the Inquiry now has a much more detailed evidential picture in this regard than was available when it produced its Module 2 report.

Regarding data analysis and data science, the Treasury’s pre-pandemic capabilities and developments subsequently are detailed in Vanessa MacDougall’s statement and James Benford’s written and oral evidence. The Treasury processed and analysed a vast amount of data, accessing new and novel data sources to complement what was ordinarily available, working closely with BEIS, the ONS, and the Bank of England to develop new or improved ways to obtain real-time data.

Data science is, though, a good example of where the Treasury has already built on its experience during the pandemic to improve its ways of working. The Treasury has already expanded its data science capabilities, formally establishing a Data Science team in 2022, and making its processes more efficient.

My Lady in conclusion, much has been learned already and much work has been done to build on the enormous policy successes of the economic response to the Covid.

Where gaps in provision have been identified, this will be taken into account for future schemes and interventions. There is no complacency and the Treasury looks forward to considering any additional recommendations which the Inquiry makes that can improve the Treasury’s discharge of its function and responsibilities.

My Lady, finally, this is the final module in which His Majesty’s Treasury will be a Core Participant. May I take this opportunity to thank you, the Inquiry legal team, and the wider staff, for the opportunity to play a full part in the Inquiry.

Thank you.

Lady Hallett: Thank you very much indeed, Mr Block. I’ll forgive you your special pleading on behalf of the Bar.

Thank you.

Mr Moss, I think you’re over there. Closing statement on behalf of the Department for Business

and Trade by MR MOSS KC

Mr Moss: (Microphone switched off) … Business and Trade, DBT, the successor department to the Department for Business, Energy and Industrial Strategy, BEIS.

My Lady has a deliberately very detailed corporate statement from the department, a further lessons learnt statement, nine individual statements from former ministers and officials, and my Lady has heard oral evidence from Lord Sharma and Gareth Davies, DBT’s Permanent Secretary.

We will provide more detailed written closing submissions.

This morning I wish only to identify five themes briefly, to which we would simply invite your Ladyship to have close regard in formulating your conclusions.

First is the risk and cost of inaction. The Inquiry has heard from many quarters about the extent of the economic challenge as it emerged. There are many and variable metrics of the scale of the crisis, and how it threatened the economy.

But they each lead, perhaps, to the same conclusion: that the witnesses who described the risk to businesses as potentially existential did so, we say, without exaggeration.

Accordingly, as has been observed many times in this module, the risks and costs associated with any intervention must be compared with the risks and costs of inaction. As Mr Joyce confirmed in evidence only this week, the impact of such inaction would have hit, in effect, hard and early.

Second, and relatedly, is the cost of delaying the actions that were taken. Decision makers, my Lady, did not measure delay risks in terms of months, as may be the case in what has been called “peacetime”; they had to do so in terms of weeks and even days.

The Inquiry will doubtless consider whether they were reasonable in that approach, but the Inquiry should not doubt, we suggest, that the survival of thousands of businesses, most especially SMEs, was at serious risk and, with it, the livelihoods of the owners and employees, in other words a genuine human cost.

It is therefore important, we suggest, to consider how much time would actually have been required to mitigate the risks associated with the interventions, and significantly, what that time would have meant for those businesses approaching or already in crisis.

Counsel to the Inquiry observed to Sir Charles Roxburgh that while no one wants businesses to fail, no right-thinking person would want public money going to fraudsters or given out in error. That is compelling, and it is uncontroversial.

But, in particular, in March to May 2020, the Inquiry may conclude that with the options available, and given the state of preparedness as it had been, it was simply not possible to avoid both mass business failures and an unacceptable level of money falling prey to fraudsters. Such was the – forgive me.

The Inquiry may conclude that with the options available and given the state of preparedness as it had been, it was simply not possible to both avoid both mass businesses failures and an unacceptable level of money falling prey to fraudsters at the same time.

My Lady, such was the invidious difficulty ministers had to face. What was to be done, faced with, on the one hand, an imminent pressing risk of mass business failure and major economic damage if interventions were delayed and, on the other hand, a clear risk of fraud and error if the support was launched with the speed that was assessed to be necessary to avoid those economic risks? Ultimately, the elected executive had to decide how to resolve that.

Covid business support, most especially Bounce Bank Loans, are now at risk of being synonymous in the public consciousness with unacceptable levels of fraud. No DBT witness has disputed that the levels of fraud and error in some of the schemes is discomforting, or worse. These are losses that would not, and should not, be countenanced in normal times.

But what is often lost, and we say unfairly lost in this narrative, is that the relevant ministers, supported by their officials made good faith decisions, not ignorant of those risks, but painfully aware of them. They countenanced those risks only because of the gravity and scale of them, and because of Covid’s threat to the livelihoods of millions of workers and the survival of thousands of businesses.

You have the evidence from Lord Sharma which demonstrates, it might be thought, the care and diligence that was applied to those difficult decisions.

Decisions were based on the data that was available, imperfect those it was, and on intelligence from the business community. That information pointed to the potentially catastrophic consequences of delay for businesses of all sizes, but particularly small businesses with limited cash reserves.

Yes, there could have been further measures taken to limit fraud and error; yes, the schemes could have been delayed to implement those and other improvements, but the government would then have had to answer for the damage in terms of jobs, family livelihoods, and longer-term scarring caused by such delay.

To some observers, the earlier inclusion of fraud mitigation measures may appear straightforward, even basic. For example, a check on whether an applicant for a Bounce Bank Loan had applied elsewhere. It might be thought that a straightforward check is simple to develop and develop very quickly, but was it?

The detailed evidence the Inquiry has heard of the process and time required to introduce, to take one example, the Cifas duplicate check, strongly tends against that view. The need to avoid judging these issues with hindsight is obvious and often stated, and we are very grateful to Counsel to the Inquiry for highlighting that in his opening.

But it is very challenging in practice to achieve a judgement ignoring hindsight and based only on what was known and equally, what was so uncertain at the time that the key decisions were made. My Lady is very familiar with that challenge.

The evidence of the officials and ministers who were involved at the time from the Treasury, from former BEIS, the BBB, and MHCLG, does, we say, assist in depicting how incredibly challenging these decisions were at the time with the risks and uncertainty that prevailed.

None of this is to deny the unacceptable nature and extent of the fraud or its significance, but it is only in recognising what the challenge really was that a fair assessment could be made and the proper lessons identified.

The department has implemented a number of fraud-specific changes, some are backward looking in the sense that DBT continues to detect and respond to fraud that has arisen in the loan schemes and business grant schemes. Other improvements are forward looking to future schemes.

In all these efforts, DBT has established a close and willing relationship with the Public Sector Fraud Authority.

Pre-Covid, BEIS was, reasonably, not a department whose ordinary business required it to have an extensive centralised counter-fraud function.

Post pandemic, DBT has built up its own counter-fraud resourcing and expertise. Previously, this was in a shared arrangement with other departments. As you heard yesterday, this has now been brought in house. DBT has developed key counter-fraud governance arrangements, has better fraud detection data analytics, and critically, has made changes so that fraud risk and counter-fraud measures are an intrinsic part of planning all economic emergency measures.

Your Ladyship will see the prominence now given to counter-fraud measures in the playbooks.

My Lady, there remains, of course, areas to improve, but the department has performed well in audit of its current counter-fraud approach.

Third, the pandemic and the risks posed to businesses developed in real time. This made it necessary to iterate, to develop version refinements in the design of the business support schemes. The Inquiry has heard evidence of various amendments made over time to the loan and grant schemes. BEIS, alongside the Treasury, worked intensely to get the schemes off the ground with the aim of providing working capital to businesses.

In response to feedback, the schemes were amended, sometimes several times. At times, it became clear that a new scheme was required. The Bounce Bank Loan is one such example.

The iteration of the schemes that occurred, and the subsequent introduction of further schemes, raises the reasonable question of whether this could or should have been done earlier. But in considering that question, we would only invite the Inquiry to take into account the rapidly developing picture of the pandemic. Many of these iterations, my Lady, are new schemes, legitimately erased from the feedback from those affected, and from learning that the need for support and capital remained insufficiently met in particular areas.

Here again, the challenge of judging these matters without hindsight is obvious.

Fourth, your Ladyship has received important evidence that local authorities would have wanted greater involvement in the design and rollout of the business grant schemes, and the devolved administrations would have wanted greater input into the UK-wide business loan and other support schemes.

I want to touch just very briefly on what happened at the time and then address current preparedness.

Lady Hallett: I’m afraid, Mr Moss, I’m going to have to ask you to do it very briefly.

Mr Moss: I will do.

As to the events at the time, particularly with the grant schemes, my Lady, we simply invite you to look carefully at the chronology. When my Lady does that, you will see that for the understandable speed at which the Treasury was moving in cohort 1, former BEIS itself had extremely limited notice of those early grant schemes, and did its best in those circumstances to work with other stakeholders.

That was the case with the first of the cohort 1 schemes. The third of the cohort 1 schemes, the Local Authority Discretionary Grants Fund was different: it was launched squarely in response to the feedback from local authorities, concerning those who were ineligible for the existing schemes. And local authority representatives provided input during its design.

In relation to the cohort 2 schemes, my Lady is already aware that they were designed to focus on, and tailored to, the non-pharmaceutical interventions. My Lady knows the speed with which those changed and, therefore, the consequential challenge to all officials in trying to keep pace with those changes in designing the focus of those schemes.

For the future, DBT’s playbooks do recognise the importance of the local authorities and the devolved administrations.

It accepts the need to involve them sooner and more in the design and delivery of business support schemes in an emergency. But more needs to be done. The department has listened to the evidence on these topics with care. It accepts that its playbooks, which are first versions still under development, need to be finalised with the input of local government and the devolved administrations, and they need to expand into articulating better how that will be achieved in practice in the future.

My Lady, I will update you early next year in the progress made in that regard.

Finally, in terms of lines of responsibility, as to the loan guarantee schemes, Dr Tetlow suggested that confused lines of accountability for the BBB between the Treasury and BEIS hampered their rollout and scrutiny.

My Lady, you’ve heard firsthand from the key protagonists, from Mr Sunak and Lord Sharma and officials from the Treasury, former BEIS, and BBB.

Put shortly, their unanimous evidence does not support Dr Tetlow’s opinion. It may be thought, therefore, that Dr Tetlow’s observation is far more theoretical than real.

As to the future, DBT considers that it remains appropriate for the British Business Bank to be owned by, and accountable to, this Business Secretary. Your Ladyship may be considering the possibility floated by Sir Charles of a separation of accounting officer responsibility for scheme design and scheme operation. While entirely understanding how this suggestion arose, DBT is sceptical about it. Consistent with Lord Sharma’s view, there is considerable advantage, in terms of clarity and consistency, in keeping accounting officer responsibility for policy and implementation in the same department.

As for the business grant schemes, it’s been suggested that there was confusion about scheme ownership and delivery as between the Treasury, MHCLG, BEIS, and local authorities.

To the extent that there was, my Lady, we invite you to recognise that it was novel to use the city’s local government unit in the way that was done and at the scale it was done. It was a pragmatic choice, and pragmatic choices were required. It was an existing joint BEIS and MHCLG unit.

DBT’s arrangements for grants have since matured through the creation of its Grants Delivery Directorate. It has established expertise in design, delivery and monitoring new grant schemes. It has over 90 full-time equivalents. That would be the lead in the future.

My Lady, separate from, and additional to DBT’s departmental reflections, Lord Sharma has raised for your Ladyship’s consideration whether cross-government working would benefit from agreed principles or a framework. My Lady will recall that evidence. And also the benefit of an external standing panel extending to keeping economic interventions under review.

In conclusion, the department welcomes the forward-looking approach that we say responsibly has been taken in this module, my Lady. Many improvements have already been made and we look forward to considering in depth your Ladyship’s recommendations.

Lady Hallett: Thank you very much for your help, Mr Moss, I’m very grateful.

Mr Mitchell. Closing statement on behalf of the Scottish Ministers by

Mr Mitchell KC

Mr Mitchell: Good morning, my Lady.

This is the oral closing statement on behalf of the Scottish Government. I appear today, along with junior counsel Kenneth Young, and we are instructed by Fraser Johnston Roberts and Iain Wallace of the Scottish Government legal directorate.

In our opening statement we spoke of the financial challenges that faced the Scottish Government during the pandemic. We dealt with how the normal borrowing arrangements and the overall fiscal framework between the UK and Scottish Governments continued to apply during the emergency and how these mechanisms were neither designed nor adequate for responding to the scale and pace of the spending. Those themes were reflected in the evidence, primarily in that of current Deputy First Minister Kate Forbes.

However, in the course of evidence, witnesses also spoke of the learning that had emerged. They spoke with positivity of hurdles overcome and lessons for the future. It is such matters that we deal with in this closing statement today.

Looking, firstly, at funding issues and data, the experience of the Scottish Ministers was that consequential funding was only announced when the UK Government felt, in their view, that it was required. That analysis appeared to bear little relation to the specific conditions of the pandemic in Scotland. Ms Forbes was pressed by CTI on this but she maintained that the consequential funding arriving, and the conditions in Scotland, were not connected. This created uncertainty and constrained the ability to plan.

She highlighted practical impacts of this during Omicron, the spread of which was more advanced in Scotland than in the rest of the UK. But, as she was at pains to point out, she did not believe that this was intentionally disruptive. Rather, she perceived that the funding arrangements did not allow for any other approach.

The Barnett guarantee, introduced in July of 2020, was in direct response to concerns raised by the Scottish Government as to the predictability of funding. Without question, the guarantee was welcomed by the Scottish Government. As Ms Forbes explained, “Having that was extremely useful and we expressed our appreciation for it”.

In a future emergency, Ms Forbes made clear that she would very much like to see it repeated as it eliminates one of several risks.

Looking, therefore, to the future, Ms Forbes spoke of three pillars: flexibility, predictability and transparency. They are at the centre of any response. She made it plain that her criticisms of the UK Government were never about underfunding. Rather, her concerns were always about the ability to respond to unfolding events. Flexibility, predictability, and transparency provide that.

As she explained, “The point I’m making is: do you know there will be enough funding at the point you have to make the decision?”

Two suggestions emerged in her evidence. One was the provision of an upfront guarantee. The suggestion by Alyson Stafford, the Director General of Scottish Exchequer, was of a notional figure of £1 billion. Whilst the precise sum could be revised, the principle was described by Ms Forbes as “very sound”. At a minimum, in the very early days of the pandemic it would have allowed for rapid planning.

As an alternative, Ms Forbes suggested a sum of money that would be paid back over subsequent years almost as an advanced sum of funding. That would allow the Scottish Government to plan more comprehensively, rather than wait for further announcements of funding from the UK Government.

Ms Forbes considered that this suggestion made more sense over the course of the pandemic.

Ms Forbes also saw merit in a number of suggestions made by the expert David Phillips. He recommended, and Ms Forbes agreed, that some combination of relaxed borrowing rules and funding guarantees should be rapidly introduced in a major fiscal shock, where spending decisions will likely need to be taken quickly and on rolling basis.

Further, that consequentials, through the guarantee, should be the cornerstone, with borrowing power secondary to that in a more limited way.

Ms Forbes agreed with the suggestion of an ability to carry forward funding, because it allows the government to make prudent financial decisions over year-end which are in the best interests of the people, rather than squeezing funding into one year arbitrarily.

A blend of upfront guarantees and borrowing powers also seemed to find favour with Mr Sunak, when he gave evidence earlier this week.

Turning to data. The Inquiry heard from many witnesses about the importance of data and data sharing. Ms Forbes spoke of the huge improvements over the course of the pandemic. That work continues. For example, the Office of the Chief Statistician has made an invaluable contribution by securing from the DWP data on children within low-income families. This may improve the £200 million that is allocated each year to the Scottish Attainment Challenge and also support the Scottish Government’s priority of eradicating child poverty.

Yet there remains a strong need for more routine data sharing between the Scottish Government, HMRC, and DWP.

As Ms Forbes said, despite the “improved mechanisms by which the Scottish Government and the UK Government can access data, the key will be to test those and apply them effectively to HMRC”.

Sir James Harra recognised that if an existing gateway for sharing data does not fit the purpose, then one would have to be created. However, because of legal and technical complexities, data sharing does take years to accomplish. There is, therefore, a need to make progress now if the benefits are to be reaped in a future crisis.

Turning to support for jobs, business, and the self-employed.

In our opening statement we spoke of the more than 130 Scottish business support schemes and the sum in excess of £4.73 billion that was paid out. These schemes, from the broad-based non-domestic rates relief schemes to the highly targeted sector-specific funds, support the contention advanced by Ms Forbes as to the value of a devolved approach. As she noted, the Scottish Government was able to tailor schemes to groups of people who felt excluded.

The evidence suggests that, in Scotland, the concept of gap filling was a significant driver of business support, particularly the progression from the initial phase I funds to the more targeted and application-based phase II funds.

It is submitted that the experience of this pandemic illustrated, in Ms Forbes’s words, the value of more localised interventions in protecting the economy.

The Inquiry heard from Nicola Dickie, of the Convention of Scottish Local Authorities, or COSLA. She said that engagement between the Scottish Government and local authorities were generally good. Where an issue arose, it was, as CTI put it, the “exception to the rule”.

The Scottish Government worked closely with COSLA. This relationship continues. There is regular liaison between the senior teams in Scottish Government and COSLA. As Ms Dickie said, despite it not being a statutory organisation, during the pandemic, COSLA were regularly invited into meetings in the Scottish Government Resilience Room. Further, the Scottish four harms approach provided another opportunity for COSLA to feed in information and intelligence.

One aspect of the high-trust relationship between the Scottish Government, local authorities, and COSLA was that it allowed for an intentional approach to minimise reporting responsibilities on councils, particularly in the first six months of the pandemic.

This approach manifested itself in different ways. For example, in relation to financial monitoring returns, the Scottish Government did collect these returns but they were collated from within the Scottish Government. Thereafter, if queries about the data remained, local authorities and COSLA were asked to provide further detail. This was different to the system in England but a system was, nevertheless, in place.

Further, the Inquiry heard from the Local Government Association’s Joanna Killian about the incredibly burdensome grant reporting requirements in England. Nicola Dickie’s evidence clearly preferred and supported the approach in Scotland.

Ms Forbes explained that by working hand in glove with local authorities, the Scottish Government received qualitative, not simply quantitative, feedback.

One consequence of this was that there was no suggestion in Scotland of instituting an unhelpful and undermining league table for local authorities, as was seen elsewhere.

In terms of support for jobs, Ms Forbes explained that her criticism concerning the furlough scheme was not directed at its inception, but rather at the UK Government’s unwillingness to respond to requests for flexibility in local requirements, a theme we have touched on already.

An example that she gave was that of October 2020 when requests from the Scottish and Welsh Governments to extend the furlough scheme were rebuffed until the UK Government brought in restrictions in England.

One Scottish scheme explored in evidence was the Newly Self-Employed Hardship Fund. Ms Forbes explained that the Scottish Government was very conscious of fraud and risk, but that providing support for those who had fallen through the cracks was the right thing to do.

Eligibility criteria for the fund were intentionally built around existing local authority data, systems and processes, particularly the long-established non-domestic rates dataset. These allowed business identities and premises to be validated quickly and reliably.

Further, the Scottish Government agrees with Ms Dickie’s view that a strength of the system was that it relied on the judgement of local authority officers. As she noted, the perceived risk of fraud and error was not borne out by the work that was subsequently done by Audit Scotland, and ultimately, any risk introduced was not disproportionate.

Turning finally to inequalities. At the outset of the module, the Inquiry heard from Kamran Mallick of Disability Rights UK, who gave evidence that:

“… in order to design systems that actually work for the most marginalised people in our society, you can’t do that unless you’ve got those very people and those voices and lived experience in the room where those decisions are being made …”

In line with that, the Scottish Government is firmly committed to the principle of Nothing About Us Without Us. That is, at times of crisis, when existing inequalities are at risk of being exacerbated and additional barriers to support may emerge, disabled people must have meaningful opportunities to shape policy and influence decision making at every stage, based on their lived experience.

In conclusion, my Lady, we trust that this oral statement will be of assistance to you in the preparation of your report, and we will expand on what we have said today, and deal with other issues in our written statement.

Finally, the Scottish Government would wish to pay tribute to all its partners with whom it worked, and strove to protect Scotland from the profound economic impact of the pandemic. But before I sit down, I would like to thank, on behalf of the Scottish Government, the Inquiry for the work that has gone into this module. Those thanks go to everyone involved, to the legal teams, to the ushers, to witness support, to security, and to RTS, and as this is likely the last time that we will address the Inquiry as we are not Core Participants in Module 10, may we thank you, my Lady, for the hard work and commitment that you have shown and continue to show to the chairing of this Inquiry. Thank you.

Lady Hallett: Thank you very much indeed, Mr Mitchell, very grateful.

Ms Walters, I think you’re next. Closing statement on behalf of the Welsh Government by

Ms Walters

Ms Walters: Bore da, my Lady.

The Welsh Government opened its submissions in this module by concentrating on two main areas: funding and the support provided to the Welsh Government and the economic interventions designed by the Welsh Government for businesses, individuals, and the third sector.

In today’s short oral closing, the Welsh Government will focus on lessons learned, and outline some areas of recommendations for your Ladyship to consider. These largely fall within four areas: funding, intergovernmental communication and engagement, data, and local government working.

First, then, funding.

As your Ladyship will recall, the subject of funding formed a significant proportion of the Welsh Government’s oral opening, which is an indication of its importance to the economic response to the pandemic in Wales.

The Welsh Government acknowledges Mr Phillips’ overarching recommendation to maintain a flexible, rather than a rules-based, approach for determining financial arrangements during a pandemic situation.

Alongside this, the Welsh Government further notes that Mr Phillips also recommends that several permanent changes be implemented to the business-as-usual arrangements, a number of which actually mirror those fiscal flexibilities previously sought by the former Minister for Finance and Revenue, in her letter to the Chancellor of 3 July 2020.

Accordingly, and assuming the existing fiscal framework remains in place at the time, the Welsh Government invites your Ladyship to consider recommending several of those flexibilities which it submits should be automatically implemented in the event of a future pandemic and should remain in place for its duration.

The reintroduction of the Barnett guarantee is the first of these. However, as previously indicated in opening, this would also require the support of other flexibilities to maximise the ability of the devolved governments to respond. Other recommendations in this space will be set out more fully in our written closing statement, but will include the ability to carry forward late increases of funding into future financial years, the ability to switch from capital to revenue budgets, and increases to the annual capital borrowing limit.

In addition, to address the issues regarding the lack of availability of support schemes in the devolved nations when England do not adopt the same stringent public health measures, the Welsh Government invites your Ladyship to consider making recommendations to ensure the public health emergencies are treated equally for Treasury purposes in whichever part of the United Kingdom they occur.

This would ensure a level playing field in decision making. To this end, the Welsh Government endorses Mr Phillips’ suggestion that efforts should be made to allow economic support, such as the furlough scheme, to be operated on a geographical basis, to address one, both the potential for asymmetric shock, but also the resultant difference in views between governments as to the appropriate health restrictions to be implemented in response.

Moving, then, to communication and engagement, my Lady.

The Inquiry has heard much evidence about intergovernmental communication and engagement, and there is a consensus that greater engagement is something to aim for. The Welsh Government therefore endorses early, regular and effective communication and engagement through reliable information-sharing forums.

While we acknowledge the positive outcomes individual relationships can have, a strategy of relying solely on these is not an effective one. They must be supplemented by specific forums which enable information to be shared regularly and reliably between governments to support effective and timely decision making.

If there are occasions where emergency action must be taken, such that this engagement cannot take place beforehand, rapid, post-decision discussions should follow, rather than regarding the original decision as something complete and beyond further consideration.

Moving to the third area, data.

My Lady, the Inquiry has heard much about data analysis and sharing in this module and indeed across all of the modules considered by this Inquiry. The issue of data is intrinsically one of detail, and we submit better suited to written submissions.

The recommendations to be put forward by the Welsh Government in this area will draw on the multiple internal and external lessons learned exercises carried out by it, and others.

Insofar as data sharing, the Welsh Government endorses the recommendations made by others to streamline and/or legislate to permit increased data sharing between UK Government departments such as the DWP and HMRC, and the devolved governments.

Finally, the Welsh Government turns to the issue of local government. Local government played an invaluable role in facilitating the economic response in Wales and in its successes. The Welsh Government thanks the 22 local authorities in Wales and the Welsh Local Government Association which worked tirelessly to ensure the support schemes put in place by the Welsh Government were delivered to the intended recipients as quickly and easily as possible.

There is little doubt that the overwhelmingly positive nature of the longstanding relationships between local government and the Welsh Government, both at a ministerial and official level, provided a solid footing for such work to be facilitated.

My Lady, you have heard evidence from Dr Llewelyn of the Welsh Local Government Association during this module. Whilst recognising that the size of Wales and smaller number of local authorities has logistical benefits, the success of the engagement between the Welsh Government and local government is predominantly down to the hard work put in on both sides.

This includes regular and reliable communication, early consultation prior to decision making, whenever possible, the existing trust and confidence built over many years of partnership working, and a genuine desire by all involved to work together for the benefit of Wales as a whole.

To paraphrase Dr Llewelyn, in Wales, the overall focus on improving outcomes for people in communities was never lost at any tier of government.

Lastly, and turning briefly to the topic of local government funding, the Welsh Government considers that the Local Government Hardship Fund and its associated decisions provided an effective solution to the issues faced during the pandemic.

During this module your Ladyship will be considering the advantages and disadvantages of a claims-based approach, as the Local Government Hardship Fund was, as compared to the formula-based approach used by other governments.

As your Ladyship has heard, this claims-based approach has worked successfully in Wales even prior to the pandemic when local emergencies such as flooding have necessitated it.

Whilst the Hardship Fund was implemented on a much larger scale, your Ladyship will note Dr Llewelyn’s evidence that this did not necessarily result in increasing complexity or bureaucracy and that the implicit criticism that this type of scheme can disincentivise local authorities to control expenditure or minimise loss was not borne out.

Accordingly, the Welsh Government invites your Ladyship to recommend that the Local Government Hardship Fund or a similar claims-based scheme continues to be utilised to respond to future wide-scale emergencies in Wales.

My Lady, I conclude this closing statement in a similar vein to that of the opening. The Welsh Government is keen to learn lessons from the findings of this Inquiry and the pandemic at large. There are always ways in which responses can be improved and, whilst the benefit of hindsight should not be implemented as a critical tool, it can be helpfully utilised to identify and implement improvements for the future benefit of Wales and the rest of the UK.

The Welsh Government will continue to have regard to the entirety of the written and oral evidence produced for this module, and will respond more fully in writing in due course.

Lady Hallett: Thank you very much for your help, Ms Walters. Very grateful.

Now, I think, Ms Stober. Closing statement on behalf of the Local Government Association and the Welsh Local Government Association by MS

Stober

Lady Hallett: Have you got a lectern?

Ms Stober: Thank you.

Good morning, my Lady. As you already know, with the other modules, I represent the interests of the Local Government Association and the Welsh Local Government Association. Together, they represent a collective voice of local government, with 100% in Wales and 99% of English authorities in England.

The Inquiry has already received extensive evidence about the timing and reach of lockdowns and other measures, all of which at least were severely hindered – severely hindered economic activity or, at worst, brought it to a halt.

As the Inquiry have heard during the module, councils were crucial to the delivery of measures of economic support for the nations during the pandemic. Without such interventions, the nation’s economy would have been utterly crippled by the combined effects of the virus and the measures taken to delay and halt its spread.

While councils were an essential partner in this endeavours, and their responsibility for the delivery of economic intervention was huge, they had only the most meagre resources of their own.

My Lady, you’ve heard this before.

The pandemic accentuated this issue, firstly because the resources of income from sales, fees, charges, commercial and domestic rents, and local taxes all diminished.

On the other hand, there were increased costs of delivering and maintaining existing services, increased demands for services, significant cost in delivering Covid-19 responses, increased housing cost; and expected savings could not always be delivered.

So the capacity to provide economic support from their own resources was very limited.

The evidence the Inquiry heard from Ms Killian, the LGA Chief Executive, explained that councils’ role in the provision of economic support involved continuing to deliver their core functions of supporting local communities and economies and also delivering new central government programmes and funds for businesses and communities.

Both of these roles required councils themselves to remain financially sustainable during this period, itself a significant task involving substantial efforts from both central and local government.

Five years on, councils’ finances remain parlous, and ensuring the sector’s financial stability, ahead of the next pandemic, during it will be important.

I will not repeat the detail of the economic support councils provided here, but we mention some generic points.

As the LGA’s evidence outline, the government was successful in maintaining the financial sustainability of the sector in the context of unprecedented financial pressures.

This outcome was underpinned by incredibly hard work of council members and officers but the additional financial support provided by government was essential in supporting councils at this time.

Councils brought their local knowledge, flexibility, resilience, and responsiveness, as they have done in all aspects of their response to the pandemic.

They set about the task of distributing funds swiftly and quickly, yet they could only work with the funding decisions taken centrally, and often without being consulted or being involved in designing the measures which would have enhanced their effectiveness and efficiency.

As the Inquiry heard from Ms Killian, the interventions were not always optimal. Funding was always – was often incremental, sometimes lacking clarity, and was not always aligned with local needs.

She emphasised that had there been earlier consultation on business support grants with central government, councils could have improved the implementation of new processes by bringing attention to issues with workforce and IT resources, and delayed delivery time frames.

Also, guidance was frequently delayed and revised for these grants, leading to implementation challenges. There was always a misconception in some government department about the data that councils do and do not hold on their local businesses. The statement by Lord [Alok] that 945 million of business grants were paid in error due to local authorities having out of date data demonstrates the lack of understanding continues.

Councils hold data in order to fulfil their statutory functions, and so it was wrong of central government to think that councils would already hold data that would enable grants to be paid to businesses.

Councils have no need to make such payments in normal circumstances, and so do not hold suitable data for that.

The pressure from government on councils to deliver rapidly the early schemes meant fraud and error risks were more significant with them than in later schemes.

Messaging. While there was strong engagement by government with the sector and the LGA, there were elements of government engagement with, and messaging to, councils that could have been stronger. Ms Killian provided some reflections on this, as to how it could be improved.

Lessons learned. Ms Killian sets out the key lessons from the local government sector to inform policy. These include the importance of multi-agency collaboration, flexible funding, and local discretion. Sector-specific insights were gathered for housing, culture, leisure, and public (inaudible).

Recommendations. Should there be another pandemic of similar seriousness, there is much that could be done better to support the economy, with less cost and greater efficiency and effectiveness.

As the Inquiry heard from Ms Killian’s evidence, it is the LGA’s contention that the business support grant scheme set up by government would have functioned better had they been designed with councils ahead of the pandemic.

My Lady, Mr Block said in his closing that you should focus on outcome. This Inquiry is not just about outcomes; it’s about lessons learned to make sure that we do things better, to make sure that we’re better prepared, to make sure that we’re resilient, and that we have better recovery. Lives were lost, jobs were lost, businesses were lost forever.

In order to ensure the UK is better prepared for the next whole-system civil emergencies, the LGA believe three things need to happen: there needs to be a cultural change within Whitehall so that ministers and civil servants better understand what councils do, how they do it, and the vital role they will play in any whole-system response. Whitehall also needs to work with the LGA and the local government sector to design measures and systems needed to respond to another whole-systems civil emergency before it happens.

We never know, we do not know, when the inevitable will happen. So we must be prepared, and that preparation must start now.

The LGA should be involved in the future decision-making structures for whole-systems civil emergencies developed in response to recommendation 10 of the Inquiry’s Module 2 report. The LGA will go further, my Lady, on these detailed suggestions in Ms Killian’s supplementary witness statement, which you’ve requested.

In addition, the LGA commends the following recommendations, more fully explained in Ms Killian’s written evidence: improved financial resilience of councils through funding reform; provide multi-year settlements for financial sustainability; ensure understanding of councils’ finances across government departments; review the use of capitalisation as a financial safety net; include local government finance in future pandemic planning; design simpler, fewer, and more flexible support scheme; ensure early and consistent communication and guidance; co-design systems with local governments to improve targeting and delivery.

My Lady, I’ll now briefly turn to the WLGA. As you’ve heard, the difference in the relationship between the Welsh Government and WLGA was a vast difference from those in England.

Lessons. So I’ll just focus on lessons learned and recommendations.

There are significant lessons and recommendations that WLGA wishes to commend to the Inquiry’s attention concerning high levels of effective engagement between the Welsh Government and local authorities were crucial for effective fund distribution, and this must be maintained in future emergencies.

Adaptable, flexible, needs-based funding models that balance accountability with local discretion were well received and effective, and should be the future model.

Although, largely, local councils found grants timing manageable, delays in decisions were noted so improved dispute resolution and clearer guidance accompanying announcements would be very helpful.

There should be improved planning for redeployment or the deployment of temporary staff, or additional support, because administering multiple grants was challenging. Continued local government advocacy in shaping national business support grant schemes is important.

Future funding mechanisms should address long-term sustainability in conjunction with emergency funding and the variety of grants should be streamlined to provide clear, upfront guidance.

My Lady, these plans should be – we say these plans should be routinely assessed for resilience and sustainability.

In conclusion, my Lady, both organisations, both the LGA and the WLGA would like to pay tribute to its local authority members, elected members, and officers, who worked tirelessly and timelessly to support their community. And both wish me to thank you for giving us the opportunity to take part in this Inquiry and to stand ready to assist you in future. Thank you.

Lady Hallett: Thank you very much indeed, Ms Stober.

I think, Ms Hannett, we’ll come to you after the break if that’s all right.

Ms Hannett: Thank you, my Lady.

Lady Hallett: I shall return at 11.25.

(11.07 am)

(A short break)

(11.26 am)

Lady Hallett: Ms Hannett. Closing statement on behalf of the Long Covid Groups by MS

Hannett KC

Ms Hannett: My Lady, I appear on behalf of Long Covid Support and Long Covid SOS, assisted by Ms Sivakumaran, and instructed by Jane Ryan, of Bhatt Murphy.

My Lady, this is the fourth and final module in which the Long Covid Groups have appeared. Our clients wish to thank the Inquiry for its unprecedented scrutiny of the response of the UK Government and the devolved nations to Long Covid.

The Inquiry process has exposed the unwarranted disbelief and minimisation of Long Covid by decision makers and underscored the need for the long-term harm caused by a virus to be prioritised in any future pandemic response.

At the very outset of this Inquiry, the Long Covid Groups stated that Long Covid was an inconvenient truth, in a regrettable narrative that has minimised Long Covid and politicised a public health crisis. Our clients emphasise, again, that Long Covid continues to significantly affect hundreds of thousands of people on a daily basis. The UK Government has not acknowledged that suffering, electing not to assess the economic impact on reduced productivity of this cohort of the population, even as it recognises in its recent report, Keep Britain Working, that long-term illness has significant economic costs.

We will file written submissions which will identify the findings of fact and the recommendations my client invites – my clients invite the Inquiry to make.

For now, we focus to the following four findings and four recommendations. First, the Inquiry’s Module 2 report confirmed that there was sufficient information available by October 2020 for decision makers to understand that Long Covid was a significant policy and health issue to be tackled.

Long Covid SoS wrote to the Prime Minister as early as 3 July 2020 stating in terms that those policy issues included the impact of Long Covid on the economy. Despite this early warning, the first discussion of the economic impacts of Long Covid at ministerial level occurred on 5 July 2021, when concerns were raised at the Covid Operations Committee meeting that Personal Independence Payment claims had reached an all-time high and that, as a result, the term “Long Covid” should not be used loosely.

At the very least, and certainly by October 2020, this awareness of Long Covid ought to have prompted governmental efforts to assess the scale of the economic impact and for steps to be taken to address it.

We say that the nature of Long Covid required a whole system or cross-governmental response.

Instead, second, the UK Government as a whole and its responsible departments, did nothing to mitigate the adverse economic effects of Long Covid. Rather, the evidence discloses the same themes that we have seen in previous modules: namely those of minimisation or disbelief. We focus on three departments in particular, my Lady: His Majesty’s Treasury, the Department of Work and Pensions, and the Department for Business, Energy and Industrial Strategy, as it then was.

Turning first to His Majesty’s Treasury, on 18 November, Treasury officials observed that the consequences of Long Covid keeping someone out of work for several months was an economic cost that had not been accounted for. And yet despite Rishi Sunak and Beth Russell claiming in their witness statements that Long Covid was kept under review, Mr Sunak admitted in his oral evidence this week that the Treasury did not itself undertake any analysis on Long Covid. Neither are there any concrete examples of Long Covid being taken into account when considering economic policy given in the evidence.

Rather, we say that the Treasury witnesses all sought to minimise the impact of Long Covid by referring to the 2024 study of ONS data from 2022, which found that 27,000 people were economically inactive due to Long Covid.

There are significant limitations with the study, which we’ll draw out further in our written administrations, but broadly this is a rough estimate extrapolated from the ONS Covid Infection Survey, which did not ask people if they remained in employment, excluded those who were working reduced hours, those affected by the first wave, and participants not in employment before October 2021.

But further, we say it’s disingenuous of the Treasury to cherrypick this one study and to fail to refer to the body of other evidence that points to a significantly greater number of people with Long Covid being economically inactive or having their economic activity very much reduced.

By way of example, my Lady, the Inquiry’s expert, Dr Brewer, conducted a survey in October 2021 that found that 240,000 people out of 600,000 were working less or not at all due to Long Covid.

Mr Fitzner of the ONS gave evidence yesterday that the ONS published reports in 2022, which suggested that Long Covid was one of the factors contributing to the rise in economic inactivity. And in 2024, the ONS also reported that people with Long Covid were 19.5% less likely to be in work.

All of the independent studies into the economic impact of Long Covid have found that Long Covid is associated with increased risk of not working or working less. There is an inevitable and documented loss in income. For example, the 2023 LOCOMOTION study gathered their own data on economic impacts of Long Covid, finding that 16.7% of 366 people with Long Covid had stopped paid work, and 11.5% were no longer engaged in paid work but were still receiving work-based income such as sick pay. 23.5% of people with Long Covid had reduced paid work hours.

Similarly, the independent evidence suggests that the prevalence of Long Covid is increasing. The latest ONS data reported in March 2024 that 380,000 people were impacted a lot by Long Covid on a daily basis and since then the number of people with Long Covid has continued to rise.

In the March 2023 GP Patient Survey it was reported that 4.2% of respondents suffered from Long Covid.

My Lady, we say that that failure to assess the impact of Long Covid, and to take the steps to address that impact, matters. First, as Mike Ormerod said, when giving evidence on behalf of the Long Covid Groups, “If you don’t measure it, you can’t manage it.”

The Inquiry has heard evidence about the huge increase in economic inactivity since the pandemic and Mr Sunak acknowledged in his evidence this week, rightly, that understanding the causes of economic inactivity so the right policies can be put in place to tackle it are important for future growth and prosperity.

Mr Sunak could not, however, explain why the Treasury had not tried to understand the contribution of Long Covid to economic inactivity and reduced economic productivity.

My Lady, for the avoidance of doubt, the association between Long Covid and the increased economic inactivity cannot be waved way by reference to the position of other European countries. We urge caution in accepting the proposition that if the increase in economic inactivity was significantly contributed to by Long Covid, a corresponding increase in economic inactivity would be perceptible in other countries.

That proposition, we say, rests on the unsafe assumption that a direct comparison can be undertaken without understanding how the comparator country treats its long-term sick workers.

For example, many other European countries recognise Long Covid as an occupational disease or there is Covid-specific sick pay which provides people with adequate time to rest and recover from Long Covid before returning to work.

There are also differences in data reporting, infection rates, diagnostic criteria and vaccination eligibility which means it’s unsafe for the Inquiry to rely on the comparison without significantly more analysis.

Indeed, we note a German study of the costs of Long Covid, as well as ME and CFS, reported that there are currently nearly 900,000 active cases of Long Covid with an annual cost of 32.2 billion euros in 2024 alone.

And there are – the picture emerging from just that report, we say, is inconsistent with any suggestion that Europe has escaped unscathed from the economic impact of Long Covid.

The only safe conclusion, we say, is that we simply don’t know the full picture. The government has not investigated the relative contribution of Long Covid to the undeniable growth in long-term sick, working less or not at all.

The second reason why this matters is that where the cause of the economic inactivity is in fact Long Covid, different strategies will be needed to ameliorate the problem than would be needed for, for example, high levels of early retirement or mental health conditions.

The third reason it matters is that, as Dr Cumbers said yesterday in relation to the household survey, if people cannot see themselves in the data, then that invisibility has an impact on the degree to which they trust what the government is saying it and then also their ability to measure the impact of actions that the government takes.

In conclusion, then, the Treasury’s evidence to the Inquiry that it paid close attention to the emerging evidence on Long Covid obfuscates the answer to a simple question: what concrete steps did it, the Treasury, take to understand and mitigate the economic impact of Long Covid? The short answer, my Lady, is that the Treasury took no action at all. The Treasury witnesses failed to identify a single concrete step taken to address the economic impact of Long Covid.

The second government department I wish to address you on, my Lady, is the Department for Work and Pensions. The failures disclosed in the evidence include: the departmental failure to ensure potential benefits claimants were advised on their right to claim through the Help to Claim scheme, or to provide assessors with information about Long Covid, which of course was a novel condition, and this is despite Will Quince, the former Minister for Welfare Delivery, acknowledging that instinctively, it would be beneficial for assessors to be informed about Long Covid and how it may affect somebody’s capability.

Further, and contrary to Lady Coffey’s evidence to this Inquiry, the department did not introduce codes for Long Covid in autumn 2020, when she was first aware of it but only six months later in March 2021, and for PIP only.

Further still, from March 2021, DWP instituted a discrete process for claimants with Long Covid that introduced a 12-month review, which was a lesser period, and required assessments to be completed by external providers but appears not to have provided any guidance to those external assessors.

And there is no explanation in the evidence before you as to why a discrete process was necessary for Long Covid.

Finally, my Lady, the Department for Business, Energy and Industrial Strategy, also took no action in respect of Long Covid. For example, the department failed to provide advice to businesses on how to recognise and respond to Long Covid, despite its novel nature and despite the large number of newly disabled workers, determining that either Long Covid should be treated in the same way as any other long-term illness despite it being unknown prior to 2020.

Overall, we say, my Lady, none of the relevant departments considered the economic harms caused by Long Covid, a new condition in respect of which understanding was limited and developing.

The devolved nations performed no better. None of the devolved nations addressed the question of whether there should be targeted economic support for people with Long Covid.

Turning, then, my Lady, to my third finding: these failings had real world consequences for people suffering from Long Covid.

Mike Ormerod, who gave evidence on behalf of the Long Covid Groups, stated that the illness-as-usual approach does not work for Long Covid, as five years ago it did not exist. What Mr Ormerod meant was that there’s limited medical knowledge, no diagnostic tests, no cures, no clinical pathways. The recovery pathways vary widely and the symptoms are fluctuating. This has an obviously adverse impact on people’s ability to be economically active, for example in the need for reasonable adjustments to be particularly closely tailored to the individual in question.

The Inquiry also heard moving evidence in its impact film from Maddy, who’d worked as a freight train driver through the pandemic, and who continued working through the lockdown until she caught Covid in May 2020. She explained that she became too ill to work but said, “If there was a cure I would be straight back to work.”

Overall, those with Long Covid suffered, and continued to suffer, real financial harm. For example, they received inadequate or no sick pay, their income reduced, they lost work and employment opportunities.

Existing economic interventions did not protect them from hardship directly caused by the pandemic. Many were excluded from furlough schemes which were not designed for people who were off sick. Statutory Sick Pay was for a limited period only and is not designed for people who suffer the remitting and relapsing symptoms associated with Long Covid. Further, the uplift for Universal Credit didn’t extend to benefits for people suffering from ill health, such as Employment and Support Allowance and Personal Independence Payments.

As a result, many of those with Long Covid were left to bear the economic burden caused by the pandemic without the support of the state.

We say, contrary to Mr Block’s submissions this morning, the failure to properly consider our clients and other vulnerable groups in the economic response to the pandemic should not be overlooked by this.

Turning to the fourth and final finding. This was not necessary or inevitable. The Long Covid Groups emphasise that the situation in the UK was less favourable for people with Long Covid than in other countries. In Canada, Ireland, Japan, Netherlands, and Portugal, Long Covid could access enhanced support over and above that provided for other illness through existing Covid-19 schemes.

This support was not available here, save for NHS workers and, notably, it was not available for non-NHS front frontline workers.

Many countries in Europe recognised the link between Long Covid and occupational origin, which has informed proper compensation for people who develop Long Covid due to their work.

In conclusion, not a single witness who has appeared before you in this module has given a credible explanation for why government decision makers failed to consider Long Covid in the economic response to the pandemic.

I turn now to recommendations, my Lady. As you have noted in the Module 2 report, long-term sequelae are a foreseeable outcome of a virus. It’s important to prepare now for the potential of significant workforce absences from large numbers of people who suffer from the long-term impacts of a novel virus. To this end, the Long Covid Groups recommend that any pandemic planning for the economic response to a future pandemic anticipates the potential for significant workforce absences due to the long-term effects of the virus and ensures that data-gathering systems monitor the extent of the economic impact.

With that – as you’re well aware from our clients’ evidence, people with Long Covid continue to suffer, and, with that in mind, we advance the following four initial recommendations, and we emphasise, of course, that we’ll provide a full list in due course.

First, the Long Covid Groups propose the creation of an independent statutory body responsible for Covid-19 and Long Covid to work to mitigate the ongoing and long-term impacts of the Covid-19 pandemic.

And this will be complementary to the Module 1 recommended body which will plan to respond to the acute emergency response of a future pandemic.

Second, they add that such a body should include effective mechanisms for patient advocates, such as the Long Covid Groups, to feed into their experience.

Third, there needs to be data protection of the number of people who are working less or not at all due to Long Covid. UK Government should also conduct a comprehensive analysis of the impact of Long Covid on the economy to include assessment of reduced economic productivity.

Fourth, and finally, Long Covid, as a new disease, differs from other long-term conditions. DWP should review its approach to Long Covid. That review must assess its approach to Long Covid across all benefits, and guidance and training for staff should be developed with the input of the Long Covid Groups.

In conclusion, my Lady, my clients and my team thank you and all of your team, including the support staff, for the considerable work that you have done in this module and in the Inquiry more widely, and we look forward to assisting you with written closing submissions in the New Year.

Lady Hallett: Thank you very much, Ms Hannett. Very grateful.

Mr Jacobs. Closing statement on behalf of Trades Union Congress by

Mr Jacobs

Mr Jacobs: My Lady, we address seven topics on behalf of the Trades Union Congress, albeit some briefly.

The first is the value of planning and preparedness.

The Inquiry has had before it a line of thinking that a tremendous amount was achieved in the 55 hours taken to create the furlough scheme, which just proves that planning was not needed. It even seems to have been suggested that, had planning taken place, it may have been positively unhelpful. Planning may have been a stricture, frustrating speed and flexible thinking.

My Lady, there is no golden 55 hours during which complex national policies can be devised and introduced in a freer and more dynamic way. It is not to be celebrated that there was no self-employed scheme at all until May 2025, or such significant gaps in the schemes.

It is worth reflecting on whether Germany, as an example of a country with a pre-existing scheme, suffered with a lack of flexibility or speed of response. The first form of its Kurzarbeit scheme was introduced on 25th May of the year 1910. It was used to significant effect in the aftermath of the global financial crisis. In response to the Covid pandemic, on 11 March 2020, the federal cabinet settled on a law expanding the scheme. It was also a nuanced scheme allowing, effectively, flexible furlough. My Lady, the value of preparedness and resilience.

At that stage in this jurisdiction, we had but a blank sheet of paper.

That is not, of course, to underestimate the importance and huge contribution of the urgent work that did take place, but the process is not a good blueprint for crisis response.

That is why the TUC, along with a number of witnesses, favours the creation of a standing panel to address the economic response and the permanent or standing short-time working scheme.

Lord Sharma suggested a panel comprised of former ministers and officials, current civil servants and business representative organisations. The focus of his evidence was naturally upon the provision of support to businesses by way of loans and grants. But the TUC considers that the standing panel ought to have a broader remit to consider the economic response as a whole, including labour market interventions such as furlough and SEISS and the social security net.

Such a panel would evidently require membership from workforce representative organisations, as well as business representative organisations.

As for a permanent short-time working scheme as exists in 23 OECD countries, it is a standing scheme to enable employers to reduce employees’ hours when there is an economic crisis, whether national or local. The employer may apply to the government to furlough employees and during a crisis of the scale of the Covid-19 pandemic, the government may adapt that process and the support available as happened in many of the 23 OECD countries.

There are significant benefits to the approach of allowing a reduction in hours as opposed to “all or nothing” furlough. Such a scheme spreads the workload between employees, maintains or better maintains relationships and skills, and provides flexibility to employers, which is particularly important in allowing businesses to gradually recommence trading activities as was the case in the UK from July 2020. Ultimately, it helps build resilience for a crisis.

Mr Sunak stated in oral evidence that complex job protection schemes enable better value for money and better fraud controls but complexity is the enemy of speed, and that, ultimately, was why the furlough scheme was simple.

He added that simple schemes are better for macro reassurance and building confidence across the economy.

The TUC suggest that a permanent short-time working scheme is the best of both worlds. It is possible to develop a standing scheme with fraud controls and improved value for money which employers and employees have confidence in due to the permanence of it and the industry familiarity with it. It should be seen, the TUC says, as part of preparedness and resilience for the next crisis.

The second topic, my Lady, is the economic rationale for SEISS, and the suggestion made that it had a moral and political rationale, rather than an economic one.

Economic scarring in relation to the employed appears to be entirely accepted. It is not the case, of course, that all employment relationships without furlough will be irreversibly severed. The point, simply, is that, across the economy, enough will suffer that effect to have a material long-term adverse impact on the economy.

Support for the self-employed should be considered through the same lens. Just as many employed people will successfully return to their role following an economic shock, many in self-employment will be able to resume their business, but it is inevitable that a material number will not.

The reality for many self-employed people who operate as sole traders is that their personal and business finances are entwined. Few sole traders will be without operating expenses and, without income, there will be a push to reduce those expenses and an inevitable push, therefore, away from continuing their business.

Mr Sunak, therefore, was right to consider as compelling the example we have given of the nail technician forced to sell equipment and relinquish premises in order to cover their domestic rent and utilities. That person may find it very difficult to reopen their business and return it to profit and may well abandon it altogether.

There is also the economic scarring caused by debt overhang. If self-employed people need to take out loans to cover basic living costs which business loans and grants could not cover, that will weigh against future investment, discourages restarting the business, pushes people into employment or retirement or inactivity, and lowers long-term productivity; the very sort of economic scarring that furlough was similarly designed to avoid.

That is not in any way to diminish the moral imperative that does also exist for a self-employed scheme. That imperative exists for sole traders but also for the very significant and growing number of the self-employed who are in poor-quality quasi-employment, who face low pay and insecure work.

My Lady, the third topic is filling the gaps in the schemes.

In particular, we urge the Inquiry to resist becoming resigned to the idea that hard cases are just an inevitable consequence of necessarily broad-brush or bright-line measures. We are confident that the Inquiry will not lose sight of the people who were the hard cases, for whom the aggregate benefits of the broad measures provide little comfort.

The Inquiry must remain firmly focused on the experiences expressed so powerfully in the impact film at the beginning of this module.

We will address in our written closing submissions how we say the gaps should be narrowed, but the harsher consequences of a bright-line measure should not lead to resigned acceptance that they will exist, rather, to anguished consideration of where best to draw the line. And where hard cases will persist, it is possible, as with the fund in Wales to support creative freelancers, to supplement broad, national schemes with discretionary payments.

The fourth topic is the impact of the pandemic upon the economically vulnerable. Mr Sunak gave evidence to this module about the extent to which the widening of economic inequality was avoided by the measures which were introduced. In a sense, the TUC agrees, and it underlines the vital importance of the labour market interventions. But it does tell only part of the picture.

To give an example, the £20 uplift on Universal Credit may well show, statistically, an improved picture as compared with before the uplift. But a recipient of that uplift is still much more likely to be in a job which requires attendance rather than furlough, to be in insecure work, to be financially unable to self-isolate, to be unable to access the labour market interventions or to receive more limited support, to struggle to meet increased costs of children being at home rather than at school, to suffer health inequality, and so on.

So what the TUC says is that some significant care is needed when addressing the issue of unequal impact.

As Kate Bell said in her evidence: the weak safety net of the social security system in the UK meant that those who fell through the gaps in the labour market interventions had a very long way to fall.

The fifth topic is the minimum wage and the furlough scheme. Mr Sunak says it was defensible not to introduce a floor at the minimum wage, but was it optimal? The rationale is that the purpose of furlough is to support jobs rather than provide income support, and that the welfare system steps in to support those on low incomes. But there is a reality that the benefits system is complex, there are practical barriers to access, and eligibility rules will exclude many workers.

Lots of people who are eligible for benefits do not claim them, whether because of stigma, or being unaware that they are eligible. Some on minimum wage may be ineligible due to modest savings or household income. Further, the operation of the benefit cap meant some workers would not have their income from benefits topped up to replace their lost income from employment, and some would actually experience the double hit of a loss of earnings and reduced benefits if the drop in employed income meant that they no longer met the criteria for exemption from the cap.

Ultimately, if the objective is to target support of those who need it most, and to ameliorate the known disproportionate impact of the pandemic upon the economically vulnerable, the question arises: why not have a floor at minimum wage?

Evidently, a floor at the minimum wage would reduce harsher outcomes for the economically vulnerable who are not guaranteed support via the welfare system or other schemes, and would not introduce a significant additional burden on employers. The TUC can see no compelling reason for it not to be recommended in any future iteration of the furlough scheme.

The sixth topic is the suggested right to request furlough. It is a proposal raised by Dr Brewer, and a key rationale he provided was the barriers to access encountered by insecure low-paid workers. He said in this sense, the furlough scheme was of least use to those employees with the least labour market power or to those on zero-hour contracts, and Naomi Clayton gave similar evidence yesterday.

My Lady, the problem is correctly identified, but whether the right to request furlough is the answer requires some caution. A core difficulty is that those in insecure work are in the most disempowered position

to seek to exercise rights to request.

Insecure workers, if they are aware of such a right

and how to make use of it, will find it difficult to

make a request they consider could impact upon their

hours, pay, or other terms and conditions, and even less

likely to challenge an unfavourable outcome.

The seventh and final point is the one with which we

started our submissions in opening to this module: the

value of the labour market interventions. In opening,

we suggested that sometimes the best lessons to learn

are about what went well, and cited the furlough scheme

and SEISS as examples. The TUC remains of the view that

the most important lesson from this particular module is

the effectiveness of clear, bold, urgently introduced

labour market interventions. They save jobs and

livelihoods, and without them, the unequal impacts of

the pandemic would have been yet greater.

My Lady, thank you.

Lady Hallett: Thank you very much for your help, Mr Jacobs,

very grateful as ever.

Who’s next? Ms Smyth. Closing statement on behalf of Child Poverty Action Group by

Ms Smyth KC

Ms Smyth: Thank you, my Lady.

I represent Child Poverty Action Group, I’m going to make some introductory remarks before addressing what CPAG say are three core issues shown by the evidence, and then three key recommendations it invites the Inquiry to make.

But before I go further, it’s important to make what we say is an obvious point, but nonetheless one which is often missed in any discussion of benefit claimants and low-income families, and it’s a point that the pandemic put into sharp focus: that anyone can experience unexpected circumstances such as job loss and sickness, which means they need to draw on the social security system, and indeed, that is in part why it’s there.

The social security system, whether through Universal Credit or Child Benefit, also helps families deal with the inevitable extra cost of having a child, and around 40% of children in the UK now live in a family in receipt of Universal Credit.

As we said in opening, some 4.3 million children, which is 30% of all children in the UK, were living in relative poverty on the eve of the pandemic, and of those, 70% had at least one parent in work. What CPAG say is that the social security system should be there to help all children who need it, and that the evidence shows that in the years leading up to the pandemic, the reality is that decisions to remove support from families were an active driver of child poverty.

The Inquiry has heard that the social security system was used to deliver some of the government’s economic interventions, and in some ways, the pandemic highlighted the ability of the social security system to provide financial support to people rapidly and at scale, but in other ways, the pandemic highlighted longstanding design features and financial inadequacy that hindered the effectiveness of the social security system.

And along with decisions taken during the pandemic about how to use the system to deliver additional support, these aspects of the system led to families with children suffering, and CPAG say lessons must be learnt so that, should there be another crisis, it doesn’t have the devastating economic consequences the pandemic has had on the most vulnerable, especially children.

The Inquiry will recall hearing oral evidence from Ms Sophie Howes who is the Head of Policy at CPAG, that was on 25 November, and she gave the Inquiry a detailed picture of the economic vulnerabilities that existed immediately before the pandemic, and a detailed explanation and analysis of its economic impact against that background. And your Ladyship may recall that that was briefly costs increasing, and the ability to meet those costs decreasing, and see also Dr Brewer’s report on that issue.

And Ms Howes also explained how the social security system could have been used to get more financial support to families with children, and the financial precarity of many families on the eve of the pandemic being caused, in large part, by sustained cuts to welfare support, in particular since 2010. And I’ll come back to that in a moment.

And that evidential picture was supported by other witnesses, including Lady Coffey and Rishi Sunak, both of whom recognise that benefits have been frozen in the four years before the pandemic, and the Inquiry will also recall that reflective of that, Lady Coffey recommended at the time that the £20 uplift be maintained permanently only for that to be rejected.

So before I come to the three core issues, just to say this: that the financial impact of the pandemic itself, coupled with this pre-existing financial precarity, means that there has been a devastating impact on children growing up in poverty. And as we said in opening, the effects on their physical and mental wellbeing, educational attainment, and life chances, were set out in Module 8, and are still to play out.

CPAG say that many of these effects could have been averted or minimised through the government’s economic response and it’s the lessons learned from Module 9 that will, to a large part, likely determine how families with children survive in a future crisis. And CPAG say that we owe it to the next generation to make sure that we join those dots now.

So, turning, then, to the three core issues which have been shown by the evidence, and which CPAG invites the Inquiry to recognise in its report, the first is to recognise the dire financial circumstances of many families when the pandemic hit, the reason being that only then can the Inquiry properly address the effectiveness of the interventions, and we say that is for that reason squarely within the Inquiry’s remit.

The second is a failure to grapple in a meaningful way with the consequences of the pandemic on low-income families, particularly given this backdrop. And as one parent who contributed to CPAG research during the pandemic described it, “I’m struggling even though I’ve started work 16 hours a week. I’ve just had to isolate for eight days, so will lose pay. I wasn’t working throughout lockdown as I couldn’t get a job as I’m a single parent and had to take care of the children. I barely ate throughout that time. I’m losing a week’s pay and my children need shoes and clothes, I need to feed them and keep them warm.”

And we say that’s an example of the consequences we described.

The government should have recognised that families on a low income would have been hit particularly hard by the pandemic, and so providing economic support to them should have been a key objective.

At points, it appears government departments did recognise that need, but we say that the evidence the Inquiry has heard doesn’t suggest that when decisions were actually made by Number 10 and the Treasury, that protecting and supporting those families was actually an aim.

And that brings me to the third point, which is the adequacy of support. The headline is this: that although measures were adopted to help many, albeit not all, economically vulnerable adults, there was a distinct failure to design and enact measures that reflected the needs and costs of children. The absence of such measures, we say, is illustrated by the design of the main form of support for low-income families, which was the £20 uplift. Although the situation of families with children would, of course, have been worse without it, it didn’t take account of family size. By making that a flat-rate increase, the government effectively ignored the existence of the children living in those households.

Now, this wasn’t an instance here of needing to develop new schemes at pace or to implement schemes with bright-line rules which have been seen elsewhere in the evidence. There was also no operational issue. According to DWP records from July 2020, increasing the child element of Universal Credit could have been done in the space of two weeks.

The reality is that children were simply not a consideration in the design of this key policy, which was a vital form of support for the economically vulnerable.

The continuation of policies like the two-child limit and the overall benefit cap throughout the pandemic also shows that the needs of children were not appropriately dealt with or met. And again, we say that this is within the Inquiry’s remit, because, whatever the political and policy issues, this Inquiry is looking at the effectiveness of measures taken during the pandemic.

And we say that the benefit cap is a stark example, because the two options which were available to individuals to escape the cap, which were working more or moving house, were practically impossible, and contrary to the government’s public health measures.

But despite that, the measure was continued, leaving many families with children in a dire financial position. And then those failings were made worse by the withdrawal of the £20 uplift in 2021, despite the recommendation of the Secretary of State for Work and Pensions to make it permanent, and her earlier suggestion to increase the child element of Universal Credit.

Still on that third point, CPAG also submits that the government could and should have built on the existing social security system to provide better support for children living in poverty. Because whilst additional support might still have been required, the social security system could have been much better used.

The reality, when the pandemic hit, was that the social security safety net was inadequate to protect children and their families, and that’s including because it didn’t consistently match amounts of support to needs.

The failure of the government to tackle those issues head on as part of its economic response, even in the face of mounting evidence, was the real reason that children were subjected to acute and avoidable poverty during the pandemic.

Turning, then, to recommendations. CPAG has already set out some of the recommendations it respectfully invites the Inquiry to make in part E of Ms Howe’s witness statement, and of course, those will be developed more fully in written submissions.

At this stage, we just wanted to highlight three core recommendations that CPAG invites the Inquiry to make, which are addressed in its evidence, and as I say, will be fleshed out in written submissions.

First, planning for any future crisis must involve putting low-income families in a better position to weather economic shocks through a robust social security system which reflects actual need, and sufficient investment in children’s benefits.

Second, ensuring that economic support in any future crisis is designed to meet the actual needs of children, and reflect their existence in a household.

And third, the default mechanism for getting financial support to children in low-income families in future emergencies must be an improved social security system.

The social security system is already designed to address different characteristics of household. The Inquiry has heard that designing tapering mechanisms at pace in new emergency schemes wasn’t feasible and the absence of tapering resulted in cliff edges and unfairness, but Universal Credit already included a responsive, if imperfect, tapering feature, which means, for example, that benefits decrease as earnings increase. So using that avoids or at least minimises those difficulties. The social security system has also got built-in fraud and error rules and it’s a suitable mechanism for that additional reason.

Those are essentially the three core recommendations.

Before I sit down, the CPAG would like to record its gratitude to your Ladyship as chair, and to everybody at the Inquiry for the work that it’s done to date, and for the opportunity to participate. And CPAG, as a charity, has committed significant resources to assisting the Inquiry. And finally, CPAG would also like to acknowledge the pro bono representation it’s received in this module from a team of three counsel as well as a team from HSF Kramer, thank you.

Lady Hallett: Thank you very much indeed for your help.

Mr Friedman, last but not least. Closing statement on behalf of the Disabled People’s Organisations, Disability Rights UK, and Disability Action

Northern Ireland by MR FRIEDMAN KC

Mr Friedman: My Lady, can I start by echoing what’s been said about thanking you and your team and everyone who has assisted you and the team to prepare this module.

We act for the national Disabled People’s Organisations, or DPO, Disability Rights UK, and Disability Action Northern Ireland.

Recognition of disabled people, by which we mean respecting lives, is not enough without redistribution, which involves improving the material conditions of those lives.

Our decision makers regard it as important to be compassionate for those who are most vulnerable, but the recognition tends to repress policies and even discussion about redistribution. Recognising the vulnerability of disabled people without recognition of the value of redistributing resources to them, not as a gift, but as a moral imperative, partly explains why disabled people are repeatedly an afterthought in policy making.

In government, the dissonance between recognition and redistribution produces a politics in which disabled people and DPO do not fare well. Their existence does not fit within the preoccupations of current economic debate. Disabled people get dragged under the gravitational pull of labour markets that discriminate in favour of non-disabled workers. Contemporary discourse stigmatises disabled people as connected with fraud and inactivity.

We still live in a world in which economic orthodoxy is focused on the perceived autonomous, independent, self-interested and self-sufficient individual. His life is awash with adjustments to make it easier, but we call them norms and market drives, rather than adjustments, let alone benefits.

Which brings us to Covid economics. The economic response to Covid was not radical, even if the circumstances were. The reality was an enhanced version of ideas that have prevailed in Britain for 40 years and which intensified after the 2008 financial crisis. For disabled people, that economics involved the reduction of benefits and funding of services, and it is combined with an entrenched disability employment gap and pay gap that has long characterised the labour market.

In those emergency days of unplanned-for pandemic, government devised its major schemes to prevent unemployment and support the living standards of those able to work or temporarily unable to work.

What followed for disabled people is that both of the perennial labour market gaps widened; the pay gap, from £1.65 per hour in 2019, to £2.10 per hour in 2020. Lady Coffey spoke of achieving five years early the goal of 1 million more disabled people in work, but that seeming success was because of the large number of people already in work who became disabled through the pandemic.

The disability employment gap was in fact wider in June 2022 than it had been pre-pandemic.

It was also the case that disabled people were more likely to face redundancy because of the pandemic, 27% compared with 17% of the general working population.

From whatever income they have, disabled people pay a price for being disabled, in terms of services, equipment, travel, therapies, additional space and other support. A pre-pandemic study put that price at £583 extra per month, but during the pandemic it rose considerably. There were costs of taxis required for social distancing, extra heating while confined to the home, online delivery and reduced access to supermarket bargains. There was increased self-funding of care, which, as the Inquiry has previously seen, was withdrawn suddenly, indeterminately, and, in many cases, permanently.

DPO understand the contribution that the economic schemes made to saving jobs, but those schemes often had design features that deliberately overlooked the marginal status of disabled people in the employment market and their economic inactivity.

The £20 uplift of Universal Credit, at a cost of £8.2 billion(?), was designed for the newly unemployed.

We know from the High Court challenge that the uplift was not introduced to tackle poverty but, rather, to cushion the blow for those who made or were made temporarily unemployed and could therefore not obtain furlough.

That produced a level of candour from the DWP. If the software had allowed existing Universal Credit claimants who had not been working to be excluded from the uplift, they would have been. Hence it was contrary to policy for the 2 million-plus predominantly disabled people still on legacy benefits to also receive the £20 per week. The same was true of the 1.3 million people on £67.25 a week for Carer’s Allowance or the 2.2 million people on Personal Independence Payments.

There were business loans, approximately 80 billion in total, combined with 222.6 billion in business grants – sorry, 22.6 billion business grants, but initial proposals for 2 billion to go to the voluntary and community sector were whittled down to 750 million, of which no new or sustained funding went to DPO or representative organisations reflective of their pandemic role in supporting and sustaining disabled people.

There were central bank interventions in the financial market through purchase of 450 billion worth of government bonds to increase liquidity. We hold no brief from the DPO either to praise or attack quantitative easing. However, once interest rates did rise from pandemic levels, they were always going to create aftermath scarring for disabled people, whose additional costs of living rose during Covid and have continued to rise in the post-pandemic world of higher prices.

The economic story of the pandemic is that individuals and corporations who had become accustomed enjoying discretionary spending often accumulated money and capital. Disabled people, generally on lower incomes, and less likely to enter the labour market, ate it up on basic needs and went into debt. The result is that whatever the major economic interventions achieved, they were not specific to disabled people’s pandemic predicaments, even when specific measures were required.

In the Module 2 report, the Inquiry has criticised the delay in convening any form of cross-government strategy on disabled people’s needs. There was no dedicated ministerial meeting until May 2020; then, months of inactivity, notwithstanding ONS data analysis in June showing disabled people to be disproportionately exposed to the medical harms of Covid and the economic harms of the NPIs.

In October and November 2020, when the Covid Taskforce and Disability Unit finally got the attention of Number 10, there came a Cabinet Office’s call for ambitious action on disabled people, and specifically, for mitigating secondary impacts such as employment, poverty, and wellbeing.

DWP and Treasury were required to “consider and put forward a package of financial support to address the disproportionate impacts on disabled people, including but not limited to, those on legacy benefits not covered by Universal Credit.”

With “time running out” for the second wave, words used by Mr Gove in a letter to the departments, the Disability Unit sought renewed discussion on extending the uplift to legacy benefits, finding a means for HMRC to replicate its role in payment of Self-Employment Income Support, they suggested a one-off payment to disabled people or their carers, and revisiting the decision to exclude legacy benefit and PIP recipients from Kickstart. But none of this happened. Neither the Treasury nor DWP were prepared to return to the scene of the original exclusionary decisions that had been made.

The problem with Mr Sunak’s earnestly prepared evidence is that he was barely able to distinguish disabled people as a category of economically vulnerable people at all. First, he presented a progress story relying on aggregate figures that the policies indeed turned the dial on low-income households but he had to accept that his narrative does not account for the hidden harms to disabled households that are not captured by the disaggregated data.

Second, Mr Sunak’s account overlooks extensive evidence assembled by CPAG and DPO, including from the Joseph Rowntree Foundation, which found that for disabled households, outgoings had disproportionately increased as a result of the pandemic, 36.7% compared with non-disabled people at 22.8% as of September 2020.

Those Civil Society reports confirm what the Disability Unit accepted in its cross-departmental papers in August 2020: that disabled people were “more likely to be affected by the indirect impacts of Covid-19”, citing unemployment and other financial instability, and again “more adversely impacted financially as a result of Covid compared to non-disabled people, for instance, difficulty paying household bills, saving or meeting an unexpected or essential household expense.”

As Kamran Mallick put it, based on the real-world experiences recounted to the Disability Rights UK helpline, disabled people were regularly choosing whether to eat a meal or stay warm.

Both the Chancellor and Lady Coffey referenced measures which were taken in the March 2020 budget, and even pre-pandemic decisions on annual uprating of existing benefits.

Amorphous mention of local authority hardship funds that were not designed to meet the problem are insufficient. None of the measures illustrate engagement with the need to create a fresh, targeted financial package to support disabled people in response to the now known specific adverse impact. On this, there was no iteration.

When Lord King came to give evidence, his lesson learnt was the need to ask: what is actually going on here, and what is actually happening in the economy?

He echoes John Maynard Keynes who famously said, “When the facts change, I change my mind – what do you do, sir?”

Having been told in October, November and December of 2020 of consequential economic damage to disabled people, neither the Treasury nor DWP were prepared to do anything to deviate from their central decisions of March and April 2020 to maintain the status quo of the labour sector and keep those temporarily out of work supported.

My Lady, as with natural science and epidemiology, economic science is not neutral. It is a subject of political choice before it turns into policy. Economics in its 18th century origins was regarded as a science of happiness, of how to optimise the conditions of shared flourishing within society.

In Scotland, we reminded the Inquiry of Adam Smith, who, for all his writing on the invisible hand of markets, also wrote a treatise on moral sentiments to which he claimed that the secret of happiness was to be loved and to be lovely. In modern language, that might be translated as to be cared for and to care for others facets of human nature we can all recognise.

But that is not where Covid economics sat. Psychologists would say disabled people generate an avoidance bias or ambivalence. We want to support disabled people, not least because many of us are connected to health conditions and diversities in ourselves and our nearest, but through a combination of history, culture and politics, we cannot bring ourselves include disability within our central organising principles or to grapple with our skewed and ableist notions of inactivity and non-productivity.

Now, the Inquiry steadfastly avoids judgements on matters of party politics, but in this module it cannot avoid the politics of economic choice, because these matters are ultimately not science. They are choices. And indeed, choices based upon values.

It should be seen as valuable enough to use economic levers to let people live in dignity amidst crisis.

DPO stand by their Module 2 closing submission, and urge a repeat of what the Inquiry did in its report, which is to render these choices and their human costs accountable.

My Lady, thank you.

Lady Hallett: Thank you very much indeed, Mr Friedman. A very powerful closing to the submissions this morning.

I’m very grateful to everybody, and obviously, I shall very much bear in mind the written submissions when they’re ready, which I hope won’t be prepared until people have had a break.

Mr Wright. Closing remarks from RICHARD WRIGHT KC, LEAD COUNSEL TO THE

INQUIRY for MODULE 9

Mr Wright: My Lady, as we reach the conclusion of the hearings in this module, may I raise just five brief housekeeping points, please.

First, during the course of this hearing the Inquiry has adduced in evidence and published on the website a considerable number of documents. They comprise the pages that have been brought up on screen and shown to witnesses during the hearing, and the statements of the witnesses who have given oral evidence. But we expect, as with previous modules, that your Ladyship may wish to consider a wider body of material for the purposes of your report, and therefore, the legal team has identified an initial list of further documents that we seek your permission to adduce.

It includes, amongst other things, about 146 statements of witnesses who haven’t given evidence, three expert reports, and further documents on which you may wish to rely.

Inevitably, we will return to seek further permission, I’m sure, for further documents, potentially including those that Core Participants may refer to in their closing submissions in writing.

But in the meantime, first of all, could we have your permission to adduce in evidence and publish the documents set out in our list?

Lady Hallett: You have it.

Mr Wright: Thank you.

Second, may I also mention, for the record, that you have today made a general restriction order pursuant to Section 19 of the Inquiries Act (2005) concerning that material that’s been redacted from documents provided to Core Participants and from those documents that have been published on the Inquiry’s website as part of disclosure.

Third, on behalf of the Inquiry legal team, I want to take this opportunity to thank all Core Participants and their legal representatives for the sensible cooperation and constructive engagement that has characterised their participation in this module. We have been and remain very grateful for all of their contributions.

Fourth, I’d like to publicly express my thanks to all of the junior counsel who have supported me throughout the module and to the solicitor and paralegal team who have worked tirelessly behind the scenes supported by the rest of the Inquiry secretariat.

Fifth and finally, before we gather up our cacti and leave for Christmas, the legal team is, of course, just one small part of this Inquiry and the hearings here at Dorland House. So much goes into making these hearings as efficient as they appear every day, and from our exceptional evidence handler, our hearing room managers, those who look after the witnesses, the stenographers, the techno persons who operate the equipment, security, the list goes on and on, as does our thanks to all of them. Thank you very much.

Closing Remarks by the Chair

Lady Hallett: Thank you very much indeed, Mr Wright. I fear your question about the cactus is going to dog you for a very long time to come. I’m very grateful for those remarks, and obviously I echo them, and obviously the thanks that the Core Participants have given to people who have enabled us to complete these hearings. That now does complete the hearings for Module 9, the penultimate module. And I too have been enormously impressed by the constructive engagement of all the Core Participants and their representatives, it has been very impressive, and I found it extremely helpful. The evidence has been interesting, although I wasn’t sure I was expecting it to be, interesting and informative, and I hope that by the time people have been able to analyse the evidence and we’ve managed to make any findings or any recommendations that I feel necessary, they will have answered many of the questions that people in the public and in the media have been asking.

I would – I know that this module has created huge demands on a large number of people, including our very patient stenography team. I think they may have been pressed a little more in this module than they have in others, and I’m grateful to them.

I’m grateful, obviously, to the material providers. As ever, I know the huge demands that we make upon people who have to search their records and produce relevant documents when they have other enormous demands on their very busy days – obviously in this module, departments like His Majesty’s Treasury. I know how difficult it must be, and I am very grateful to them all.

But I am obviously particularly grateful to all those who have been involved in getting these hearings completed on time. You’ve mentioned – I think you’ve mentioned most of them. What was the expression? Techno people? I can’t remember what the expression was, Mr Wright –

Mr Wright: Techno person, I think.

Lady Hallett: – but you’ve mentioned most of them, I think, and I would reiterate your thanks.

I would like to thank my excellent Inquiry team, the Core Participants and their legal representatives, who have, almost to a man and woman, stuck to their timings perfectly, and I’m very grateful to them. It’s the only way we can get through these modules.

We have all worked together to get through them to – you’ve all worked together to analyse the material, to gather it, to complete the hearings, and you deserve a huge round of thanks.

Once I have had a chance to have a break and my team have had a break, and everybody who has been involved in getting these hearings done has had a break, we will return to consider and continue writing, in earnest, the report.

2026 has a fair bit on as far as the Inquiry is concerned. People may think that because the hearings finish in March, that we will then just be sitting on a Caribbean beach. If only. We will, in fact, have several reports, I think it’s seven reports, to finalise and finish. So I’m afraid, I suspect the publication of this report won’t be until spring 2027. But if I have anything to do with it, it certainly will not be any later, and we’ll publish all reports whenever we can.

The next hearing of the Inquiry, and the last set of hearings of the inquiry, I think February 16, 2026, and so until then, I hope people do get a break. You all deserve it. And I wish everybody a happy Christmas and

New Year. Thank you.

(12.31 pm)

(The hearing for Module 9 concluded)