Transcript of Module 2 Public Hearing on 06 November 2023

(10.30 am)

Lady Hallett: Ms Cecil.

Ms Cecil: Good morning, my Lady. May I please call Clare Lombardelli.

1. Ms Clare Lombardelli

MS CLARE LOMBARDELLI (affirmed).

Questions From Counsel to the Inquiry

Ms Cecil: Thank you, Ms Lombardelli. If you could just state your name, please.

Ms Clare Lombardelli: Clare Lombardelli.

Counsel Inquiry: Thank you. A few preliminary matters, if I may. Firstly, can I invite you to keep your voice up. Secondly, you may have noticed that people are taking a note, including a stenographer, actually, so we will take things a little more slowly than we might otherwise do. I’m particularly bad at going fast, I’m afraid, so I will try to slow down, and if you can do the same. And please do ask me to repeat anything if it’s not clear or if you don’t understand a question.

As I say, thank you for attending today and assisting the Inquiry. You have provided an 18-page statement to the Inquiry that ends INQ000251931. As we can see at the outset, it states that it’s dated 22 August 2023, but if we go to the last page, at page 18, that’s the page that contains a declaration of truth at the bottom, the statement of truth, and it’s dated 23 August of 2023. It’s just a typo on the first page.

If I can just confirm with you that everything within your witness statement is true?

Ms Clare Lombardelli: Yes.

Counsel Inquiry: Yes, thank you.

Now, you are now the chief economist of the OECD, and I understand that you took up that position in May of 2023, earlier in year?

Ms Clare Lombardelli: That’s right.

Counsel Inquiry: But your statement and indeed your evidence today is concerned with the role that you played during the pandemic, and if I can just ask you: what was your role during the pandemic?

Ms Clare Lombardelli: So I was the chief economic adviser at the Treasury during the pandemic, and that role consisted of a number of things. So I was responsible overall for the economic analysis that the Treasury did and fed into the process for Covid, responsible for all of the economic matters in that sense, not the policies I should say.

I also was responsible for liaising across the – we have a sort of macroeconomic framework in the public sector that provides advice, analysis and takes decisions on economic policy, that is a combination of the Treasury, the Bank of England, the Office for Budget Responsibility, the ONS, the Debt Management Office. I was responsible for liaising, on behalf of the Treasury, with all of those functions.

I also jointly ran the Government Economic Service during this period.

Counsel Inquiry: Thank you. I’m going to break those down in a little bit in due course –

Lady Hallett: If you could go more slowly.

Ms Cecil: Sorry.

Lady Hallett: Don’t worry.

Ms Cecil: But you will be aware that there are a number of later modules that are going to be dealing with various aspects of the Treasury’s response to the pandemic, and for today and for the purposes of Module 2, we’re going to be exploring some of the economic analysis that you were involved in and the modelling at a high level, the input of the Treasury into core decision-making, some of the different schemes, and then also consideration of the economic version of SAGE or something of that nature. So just so that you know where we’re going.

There are also a number of other witness statements that have been provided by various officials and civil servants, and indeed ministers, within the Treasury, and of course the Inquiry will have regard to those as well.

So if I can just deal, then, briefly, if I may, with your role as the chief economic adviser. You touched on it when you just described the various aspects in terms of your remit, but effectively you’re the primary adviser to the Chancellor, is that correct, on macroeconomic and fiscal issues?

Ms Clare Lombardelli: Correct, on macroeconomic and fiscal issues, yes.

Counsel Inquiry: If you can just break it down for the assistance of those that are following, what are macroeconomic issues and what are fiscal issues?

Ms Clare Lombardelli: Of course. Macroeconomic issues are basically the economy as a whole and the elements within that, so things like the level of activity, the amount of unemployment, inflation, those sorts of cross-economy issues, looking in detail at things like the labour market and the like.

Fiscal issues are basically the overall level of government spending, taxation and borrowing in the economy, and so overall this is a sort of focusing on the big picture of overall what is happening in the economy.

Counsel Inquiry: Thank you.

In relation to your role, prior to becoming in fact the director general and the chief economic adviser, you were the director of strategy, planning and budget; is that right?

Ms Clare Lombardelli: That’s correct.

Counsel Inquiry: That has a slightly different role and remit within the Treasury?

Ms Clare Lombardelli: Yes.

Counsel Inquiry: And is far more policy based?

Ms Clare Lombardelli: Yes. The director of strategy, planning and budget basically oversees the budget process in the Treasury, and what they do is they co-ordinate the Treasury’s policies for the budget, and that would mean liaising with all the different teams in the budget for fiscal events, and actually during Covid that was the team that co-ordinated the Treasury’s response to Covid and also interacted with the sort of – the rest of the government who was dealing with, you know, the decision-making and the process, so they would have been the primary contact, for example, for the Cabinet Office.

Counsel Inquiry: Indeed. In short, the Treasury uses a group structure to organise its work, and that is one of the primary groups, and as you said led on the Covid-19 work?

Ms Clare Lombardelli: That’s correct.

Counsel Inquiry: Thank you.

Alongside that, you also oversaw the work of the economics group, so a separate group –

Ms Clare Lombardelli: Yes.

Counsel Inquiry: – to the planning – strategy, planning and budget group, and that was also heavily involved, is that fair to say, in the Treasury’s response?

Ms Clare Lombardelli: Yes, heavily. The economics group was the group that brought together the overall economic analysis of Covid, what was happening and made those assessments.

Counsel Inquiry: Indeed, in your capacity there you attended various cross-governmental meetings, including those with the Chancellor and, on occasion, with core decision-makers such as the Prime Minister; is that right?

Ms Clare Lombardelli: Yes, I attended cross-government meetings where the economic analysis or evidence would have a particular role in the meeting or its interpretation.

Counsel Inquiry: Now, if I may turn to the broader approach within Her Majesty’s Treasury as it was at the time, with regard to economic analysis and modelling, just touching briefly if I may on data analysis first of all. I appreciate that in your statement you set out there is data analysis and then there is also the economic modelling tools that were utilised, you explain they’re distinct but there is a significant amount of overlap; is that fair to say?

Ms Clare Lombardelli: Yes, that’s correct. I mean, I would say we – overall for the economic analysis that we did, I think there are – you know, I could break it down into probably five areas in terms of what we were looking at.

There was data and analysis what was going on, and where we got that.

There was the modelling that we undertook at the Treasury, and with others.

We did a lot of, as I mentioned at the start, working with other aspects of the system across the public sector, who were also doing data analysis and modelling, so we shared our information and knowledge there.

We did a lot of looking at other countries, what other countries were doing, because, you know, in some cases, unfortunately, they were further ahead in the virus and so we could learn from them.

And also some external – we talked a lot to externals outside the public sector.

But in terms of modelling and data analysis, you’re right, there’s this interdependency between the two.

Counsel Inquiry: And, indeed, the questions I’m going to ask you predominantly focus on those two areas. Other aspects are for later modules, effectively.

But just perhaps to touch on those very briefly, you reference international work that was being undertaken. Her Majesty’s Treasury, as I say, as it was at the time, also utilised the IMF, the International Monetary Fund, the OECD, other forms of data in that respect of modelling?

Ms Clare Lombardelli: That’s right. That’s right.

Counsel Inquiry: If I may then turn to data and evidence, and if I can call up page 5 of your statement, and paragraph 14, you explain the changes that took place with regard to data. As I say, it’s at paragraph 14 at the top and you explain that:

“Due to the speed, scale, and scope of the economic impact of the pandemic, at the beginning of the pandemic, we supplemented the traditional economic data with additional data sources that were already available and gave a more rapid and real-time picture of economic activity.”

You then go on to give some examples such as Google Maps, Citymapper, OpenTable, effectively restaurant booking data, those types of things there. You then talk separately about credit card usage, so spending, in short term, with regard to the economy.

Now, in respect of all of those types of data, did Her Majesty’s Treasury consider data on social health impacts alongside this? Was that a form of data that was also being collated and fed it, or was it very much based on, as I say, the more economic position?

Ms Clare Lombardelli: The Treasury and our analysis was more based on the economics. I mean, that is our sort of area of expertise and knowledge. Other departments will have been looking at other data sources.

What we did do is we very closely used and were aware of the data on health and the data what was coming out of the Department of Health, and related, on how the virus was developing, because of course that was having an impact on the economy. But on the sort of more social issues – I mean, we would also have, for example, looked at schools, insofar as – because we were doing modelling, for example, what would happen and how – you know, the proportion of parents in the labour market. So there was lots of evidence early on, certainly before restrictions were brought in, that people were beginning to adapt their behaviour anyway, and that’s why we were looking at some of these indicators like Google Maps, Citymapper, OpenTable, but a much wider range, to try to work out what behaviours people were doing irrespective of whether or not there were any restrictions, just in response to the virus and their fear of the virus.

So we looked at a range – I mean, some of these, as you see, are not economic data sources in and of themselves, I mean, in a sense, Google Maps is a social data source as well, so, you know, insofar as – insofar as – insofar as data was useful to tell us about the economy, we looked at it, even if it wasn’t hard economic data, if that makes sense.

Counsel Inquiry: Would it be fair to say or a fair analysis that it was really looking at things such as, as you say, impact on workforce, those sorts of aspects, impact in terms of socialising, spending within the economy, whether that be restaurants, bars, and patterns of movement and transport, those sorts of issues?

Ms Clare Lombardelli: Yeah, I would say workforce and economic activity. Some of these issues were more about, like you say, the spending – the card spending data, for example, is just the level of economic activity in the economy.

We were also, I should say, and I reference it there, talking a lot to the Department for Business, who will have had a lot of information, at this point probably quite soft information, so, you know, conversations and the like, but they would have had intelligence on what was happening at businesses as well and how businesses were looking at this.

Counsel Inquiry: Thank you.

I now want to move to modelling, and modelling posed particular challenges for HMT during the pandemic, would you agree with that?

Ms Clare Lombardelli: Yes, I mean, modelling is always a challenge, I should say. I mean, very much – with modelling you sort of get out, you know, what – the occupants you get are a function of what you put into it, and there’s always a lot of uncertainty about the economy, but at this point – well, throughout the entire pandemic the level of uncertainty was obviously much higher than typical economic modellers would be used to.

Counsel Inquiry: Indeed. And that uncertainty resulted in modelling perhaps not being utilised to the same extent as it had been previously, would that be fair?

Ms Clare Lombardelli: I wouldn’t say it wasn’t used as much as it had been previously, we did actually use quite a lot of modelling. I would say it was a less reliable source of information than the data and the information and analysis of what was actually happening in the economy, because, you know, if you think about what economic and – modelling tends to do, what it does is it looks at existing relationships between variables and it sort of tries to apply those going forward. What was happening in the pandemic is very – the very basics of the economic relationships that we have were changing and were coming under pressure. So previous estimations of, you know, for example, the relationship between unemployment and output would be very different under these sorts of circumstances. So I wouldn’t say we used it less. We did actually use it quite a lot. It was a less reliable source of information, there was a lot more uncertainty around it that there normally would be.

Counsel Inquiry: And certainly a lot less emphasis, therefore, placed on those models?

Ms Clare Lombardelli: That’s right. We wouldn’t have used it as, for example, a reliable basis on which you could solely – solely decide policy. We were – so you – it’s very important to supplement it with lots of other information to give you a fuller picture.

Lady Hallett: It’s very difficult to change one’s speech pattern, but if you could slow down.

Ms Clare Lombardelli: Sorry.

Lady Hallett: Thank you.

Ms Cecil: Thank you.

Part of that was as a consequence of the pre-pandemic position, in that there had been very limited consideration given to the consequences in terms of modelling or data collection or those sorts of issues with respect to a pandemic situation. I think you set out that, don’t you, at page 7, paragraph 24 of your statement, and that, as a consequence, had limitations then for modelling in the pandemic, because there was no playbook, as you described it?

Ms Clare Lombardelli: That’s right. We didn’t have a pre – a sort of – a model – we didn’t – going into the pandemic we didn’t have a model of, you know, how a pandemic would affect the economy.

As I set out in the – in my statement, it would have been incredibly difficult to do that, because the impact that the pandemic had on the economy was very much dependent on the particular parameters of that pandemic, the rate of transmission and those sorts of things. So it would have been very difficult in advance to know what those would have been.

Counsel Inquiry: And indeed you gave a speech on 29 June last year at King’s College and in that you describe that – the purpose of that was because you wanted to share how you did not have that ready-made toolkit to hand to model the effects of lockdown, and effectively the known unknowns were a formidable barrier to any reliable predictive capability.

If I can just pull up your speech for a moment at page 6, and it’s INQ000088016. Page 6, please.

I’m looking halfway down the page, and this is where you’ve already touched upon the uncertainties that you were faced with as a consequence, the models not being – certainly the Treasury not being as confident in the outputs effectively.

What you explain here is that:

“The uncertainty meant it was not possible to meaningfully model the overall ‘economic cost of lockdown’ for two reasons.”

You go on:

“First – to estimate the cost of an intervention, you have to know what would happen in the absence of that intervention. It wasn’t possible to know what would have happened to the virus if there had been no lockdown. And we couldn’t have known how the economy – how people and businesses – would have responded to the virus without a lockdown. There was no reasonable counterfactual.”

Now, from this, is it right that there was no meaningful modelling of the impact of lockdown, the first lockdown?

Ms Clare Lombardelli: I wouldn’t say there was no meaningful modelling. There was a lot of analysis and modelling that happened. What I would say is there was no estimated cost of a lockdown, if you like. There is no way to basically say a cost – a lockdown will cost you X or, indeed, a lockdown of this form will cost you X but of a different form will cost you Y.

But I think it’s a bit too far to say there was no meaningful modelling done. There was a lot of useful modelling. One of the examples I referenced earlier was, for example, if you were to close schools you can from that understand, if you look at where parents work in the economy, for example, you can see what the impact of that would be if they can no longer work, and those sorts of things. But what there wasn’t was an estimate of, you know, the lockdown will cost X in terms of jobs or economic activity.

Counsel Inquiry: Indeed, and that’s the first reason you explain, and as we can see from that you explain that there is also no reasonable counterfactual. So against that, similarly, in terms of the overall economic cost of lockdown there’s no modelling of the overall economic cost of not locking down.

Ms Clare Lombardelli: That’s right.

Counsel Inquiry: It’s fair to say that there is no neutral option when it comes to making a choice; each choice, whether it’s lockdown or not, would have a consequence?

Ms Clare Lombardelli: That’s right. And as I mentioned at the start, what we saw was, even before restrictions were being considered, people were adapting their economic behaviour, and they were adapting it quite substantially and that was having an impact on economic activity, on particular sectors in the economy, and you like. So it would have been incredibly difficult – as you say, in the absence of a lockdown there would have been a significant economic impact from the virus, and actually there are various estimates of what that might have been, but incredibly hard to put a particular number on it.

Counsel Inquiry: That’s a theme that comes through both in your speech, as we can see when we move on to the second reason that you give, but also more generally within your statement, you speak about the uncertainty of behaviour, of people and businesses, in relation to how they would respond to restrictions, no past episodes to provide reasonable approximations of what the economy and individuals were going through, and you explain a really critical point: the way the economy responded changed over time; you go on to say actually it had an ability to learn and adapt, and you give some examples of that there.

But one of the big blocks for the Treasury from your perspective was that of behaviour from individuals and being able to predict behaviour; is that right?

Ms Clare Lombardelli: That’s right. That was a huge sort of challenge to the analysis and – the inability to estimate precisely what the impacts would be. Behaviour was a key driver. I mean, in the economy behaviour is always a key driver of outcomes, and of course it was particularly uncertain at this time, and an important point I make there is that it changed and people’s responses to the same sort of restriction changed over time.

Counsel Inquiry: You also distinguish between voluntary behaviours and compulsory restrictions impacting on behaviour, so effectively the counterfactual position of: if there is not a lockdown what voluntary behaviours would there be in any event, if there is a mandated lockdown then what non-voluntary or restricted behaviours would take place. And that’s the same position when it came to the second and third lockdowns as well with regard to being unable to model the overall economic impact of either way?

Ms Clare Lombardelli: Yes.

Counsel Inquiry: And indeed the autumn of 2020, when there was consideration of circuit breakers, the same position arose, it was – Treasury’s position was you were unable to calculate out the overall economic impact of a circuit breaker; is that right?

Ms Clare Lombardelli: That’s right, it would have been impossible to put a specific sort of figure or number on that with any reliability. What we were able to do and what we did do was lots of analysis on the sorts of – and what the economic impact – the sorts of economic impacts there could be and what you might see for multiple – you know, for different restrictions.

Counsel Inquiry: If I could just bring up the briefing for the Covid-S, the Covid Strategy Committee, on 21 September 2020.

It’s INQ000184589, please.

If I can go to the second bullet point, what is said here is:

“More generally, we are reaching the limits of what we can do economically, with further measures likely to be catastrophic. We need a strategy that works over the winter period, rather than tinkering with restrictions week to week.”

If I go to the final page, please, what we have set out there is an annex that deals with the economic impact of the circuit breaker, and it sets out in general terms: it’s likely to be severe, reducing revenues rather than costs. It explains about GDP dropping.

It continues to go on, and this is some of the uncertainty perhaps that you have already alluded to, that:

“Although the exact impact would depend on the type of restrictions imposed, analysis on the monthly effects of the previous lockdown serve as a reasonable proxy and suggest that a ‘circuit breaker’ will concentrate its impacts on firms already in distress.”

You go on to speak about hospitality, domestic employers, arts, entertainment and recreation, construction, furlough, sectors effectively that are likely to be impacted by a circuit breaker, high employment sectors with vulnerable workforces. And then finally it goes on to talk about cash conversion, sales revenue and retail.

But nowhere in this document is there any analysis of the opposite counterfactual scenario, is there?

Ms Clare Lombardelli: It doesn’t look like in this particular document, no.

Counsel Inquiry: So what’s going to Covid-S is not a position where economic advice is presented: this is the consequence or potential consequences of a circuit breaker now, and here, on the other hand, are the potential consequences if there’s no circuit breaker. What we have is the Treasury adopting a clear line in terms of the impacts of a potential circuit breaker, and, as we see, “severe”, “catastrophic”, that sort of language; is that right?

Ms Clare Lombardelli: Yes, I mean, what I – what I don’t know and we don’t know is what the specific commission was that this is responding to, and what the other papers that will have been – and I’m sure the Inquiry would have them – I mean, it obviously would have depended, and there would have been a huge amount of analysis going, I assume, to this decision, around what the impact of the virus would be on the two, and we were providing huge amounts of evidence and analysis throughout this period on overall what the impact of the virus was in terms of the impacts on economic activity. So there would have been supplement – other analysis going on around what the actual, the – sort of baseline was in terms of the levels of economic activity that were happening at the time, and that would have been affected by the level of the virus at the time.

Counsel Inquiry: Of course. But this is the advice that’s going to the Chancellor in relation to his attendance at that meeting, and the line that he ought to be taking at that meeting.

Perhaps if we can just call up page 2 of it for a moment. We see at the top:

“We suggest you push back strongly on the circuit breaker proposal. The economic impacts would be severe … firm failures and redundancies … There is no evidence that a circuit breaker of two-three weeks will only be in force for that long, meaning we could end up lifting restrictions when the health data … could still be going in the wrong direction because of lag-time.”

There is a very clear piece of advice here coming out of Treasury to the Chancellor in relation to the circuit breaker that was going to be discussed in that September meeting. Did that reflect the general position within Treasury at the time with regard to its approach to lockdowns and circuit breakers, that these were profound measures that had significant impacts and unacceptable impacts on the economy and so needed to be pushed back against?

Ms Clare Lombardelli: I think, you know, everyone in the Treasury was incredibly worried about the impacts on health, on, you know, life, and the loss of life, the potential for the NHS to be overwhelmed and the like throughout the pandemic. That – we were also aware of all the harms that were going to be caused, and what we – what the – sort of our role in the process was to provide evidence and analysis on the economic impact so that they could then be fed into a wider process in which these issues were sort of weighed up and the decisions decided.

The role of the Chancellor was to provide the information about the economy and the economic impact, and so that – you know, that is what this document and others will have been doing, is provide him with, you know, the evidence on the proposal that was being considered, which was the circuit breaker at this time, and the economic evidence. Other evidence should – you know, would have been provided by others in the process.

Counsel Inquiry: But what you don’t have within this paper as an example is that counterfactual position or an analysis of other alternative measures.

Ms Clare Lombardelli: I think if – I mean, I haven’t seen the whole paper. I’m sure, you know … what the economic advice would often stress, throughout, was that the virus itself was causing huge economic harm. It may have been in this paper, it may have been in other papers, but we were regularly clear on the uncertainty that was being – that the impacts would have, and also that the virus itself was having huge economic impacts, and the best thing for the economy was clearly to control the virus and to limit the virus. I think that was in – you know, that will have been consistently through our advice. I don’t know about this particular paper.

Counsel Inquiry: But in terms of the view within Treasury, was there ever support for that circuit breaker, to the best of your knowledge?

Ms Clare Lombardelli: I don’t – I wouldn’t know, I don’t know. The Treasury did not have a pre – a position – you know, pre-proposed position on restrictions. What we were trying to do was provide the economic analysis and evidence that was going to feed into the process to make the right decisions. Clearly where restrictions could control the virus that could be beneficial to the economy, because it was the virus itself that was causing damage. Obviously, you know, throughout time and throughout the process that will have varied, but we were very, very aware that the virus itself was a huge problem for the economy and needed to be – needed to be controlled.

Lady Hallett: How did you consider the definition of circuit breaker? Is it short-term lockdown, is that how you would have understood a circuit breaker?

Ms Clare Lombardelli: With apologies, I was responsible for the economic analysis that was feeding in. The precise policy that’s being considered here I’m not sure – I mean, I think the general understanding of a circuit breaker was short. I don’t know if this particular paper was written in response to a very specific policy proposal or a more general description of a circuit breaker I’m afraid.

Ms Cecil: Perhaps if I can pick up on something else that you’ve alluded to just a moment ago, that it was essentially for the Chancellor to make the economic case. Was there the view, therefore, that he would be making the economic case, the Health Secretary would make the case in relation to health, and other individuals, then, schools, for example, the Minister for Education? Was it siloed in that way –

Ms Clare Lombardelli: No –

Counsel Inquiry: – be synthesised within the Cabinet Office?

Ms Clare Lombardelli: I mean, it was the case that the – it was the case that different departments have different expertise and have different objectives in terms of the things they care about. In the Treasury obviously we were incredibly concerned about the economy and the economic impacts, as is our role, and other departments have responsibility for other aspects of public services, and it was for, you know, decision-makers together to make those choices and – and, when they occurred, trade-offs, about how do you manage this level of harm across the decision-making.

That was how – you know, that was what we – you know, it was the role of the Cabinet Office to bring those things together and to be the place where all of the information is synthesised and these different issues, whether it’s across, you know, the economy, education, inequalities, all of those very important factors – we all recognise that all of these factors were incredibly important and that decision-makers would need information across all of them to make those really hard judgements.

Counsel Inquiry: Did it make it harder, though, with regard to the fact that effectively the Cabinet Office was being presented with these binary options? You had the economic – you had the Treasury making the economic case, you had the Health Secretary making the health case and no real effort to engage across those disciplines between the departments?

Ms Clare Lombardelli: I mean, you would have to ask that – I wouldn’t characterise it as binary. As I say, the economic analysis and evidence very much recognised and factored in the fact that the virus itself was what was causing huge damage to the economy, and actually there’s a range of estimates now available about how much of this would have been voluntary and how much restrict – you know, how much as a result of restrictions, and the uncertainty around that. So the Treasury was sort of well aware that the virus itself was causing huge damage to the economy. In terms of the process question you asked, I mean, that is, it is – it is the role of the Cabinet Office to bring together all of this information and to synthesise it, and, you know, in this case, it would have been particularly challenging to do that.

Counsel Inquiry: Now, you may be aware there has been criticism of the Treasury with regard to it being tactical in how it shared its economic analysis, so essentially putting forward that analysis where it was considered that it would advance a Treasury objective. Just because we’ve just seen it, for example, in relation to the circuit breaker paper that we’ve seen, the briefing for the Chancellor there. What do you have to say about that? Was information and economic analysis shared freely or was it shared when it was in advance of a policy proposal that Treasury sought to advance?

Ms Clare Lombardelli: We shared our economic analysis and evidence very, very freely with everyone that – you know, with – with – to ensure it was feeding into the decisions as it needed to. So we shared – I mean, in two ways. So we produced a huge amount of economic analysis that we obviously shared with the Chancellor so he was fully informed, and we also fed it directly into the Cabinet Office process, and the Cabinet Office were responsible for synthesising the data and analysis.

I mean, we did also share it around Whitehall with other departments that were – that had economic interests. We had, for example, weekly notes that were going round on those sorts of things. And of course we shared it more broadly across the public sector with other parts of the economic sort of framework. We were in constant discussions with, for example, you know, the Bank of England, the OBR and the like. But we fed all the analysis and the information that we had into those Cabinet Office processes so that they could serve the joint decision-making process.

Counsel Inquiry: Now, it’s right that nobody else was providing that economic analysis aside from the Treasury during that period?

Ms Clare Lombardelli: We were bringing together the economic analysis. We were using and building on a lot of information and analysis from other parts of the public sector that we were talking to and had good relations with – you know, had relations – they shared their information with us, and so we brought it together and then it was – it was the Treasury that were responsible for inputting that. In some cases we did that jointly with some economic functions in the Cabinet Office as well.

Counsel Inquiry: With regard to transparency similarly you’ll be aware, because of the materials that have been provided to you, there have been criticisms in relation to the Treasury’s modelling analysis and advice not being published or made accessible to, whether it be other government departments, SAGE, for example, or more broadly actually, and we can compare perhaps the position of SAGE where those minutes of the meetings and the modelling and the analysis was published.

Do you consider that transparency would be something that would be desirable in relation to the economic modelling and advice in hindsight?

Ms Clare Lombardelli: I mean, transparency is always – you know, is a good thing, it helps you – it helps you, you know, get other input and views on what you’re doing and we – you know, we did share our modelling and our analysis, particularly with, as I say, the other parts of the economic framework we use in the UK. You know, we have a very – unlike SAGE, I would say, in the UK we have a very established set-up for how we do economic analysis and policy making. You know, SAGE understandably and rightly is convened in emergencies to add capability and capacity where it doesn’t exist, so in this case, you know, bringing epidemiology and virology expertise to the Department of Health and the wider government decision-making process. Slightly different on economics I would say, in that we do have a specialist capacity in the Treasury to analyse the economy, we do have specialist capacity in the Bank of England, in the Office for Budget Responsibility, and so on and so forth, so there is some capacity and expertise that is designed to do the monitoring of the economy and provide analysis and evidence.

Could – you know, could we have done more to make it more systematic? Perhaps, but I – I don’t think there quite – you know, there are differences in the way we have the system and we have got quite a robust macroeconomic framework that we use.

On transparency, I mean, we did publish, you know, some analysis, more than we normally do, as you’ll have seen. I mean, obviously the – at fiscal events we publish evidence. The government published quite a lot of analysis through the pandemic and that included economic analysis, and of course the Office for Budget Responsibility are responsible for publishing outlooks on the UK economy and they published more during this period, but it wasn’t with the frequency with which, for example, SAGE papers and minutes were published.

Counsel Inquiry: It was a fraction in – comparatively to what SAGE published but what is your view in relation to whether that material ought to be published? We’ll turn to looking at other ways of assessing the economic impacts and filtering that through in a moment. But with regard to publishing and making – being more transparent, is it desirable to have that advice published?

Ms Clare Lombardelli: I think it’s difficult. I mean, as you’ve seen in some of the examples, it’s quite difficult to separate out the economic and – you know, much of the economic analysis was part of the policymaking process and was feeding into the policy decisions. I think it is very important that ministers and officials have a space where they can, you know, have free and frank discussions and share information about policy, and I do think it’s quite hard to – you know, there’s a reason that we’ve always had the space for policy making to be able to happen privately for ministers, for –

Counsel Inquiry: Let me just interrupt you there. Let’s put policy making to one side and discuss modelling and data analysis.

Ms Clare Lombardelli: Yes.

Counsel Inquiry: In the same types of papers that you see coming out of SAGE in short, not necessarily the discussions on policy with the trade-offs either way and the advice to ministers but the models and the analysis that was undertaken by Treasury.

Ms Clare Lombardelli: Yeah, I mean, we did expose them to quite a lot of – you know, we shared them quite broadly and got input. As I say, if we – you know, could we have done that more? I mean, potentially. And, you know, maybe that would improve the quality of the modelling and, you know, we have – we’re sort of not precious about that.

I guess the question I would have is whether or not it would – well, yeah, I mean, we could – you could do that. Our primary focus at this time and, you know, being frank it was a pressurised time, was to ensure that, you know, ministers and decision-makers had the best information available. That – you know, that was what we spent our sort of time and effort and energy on. We could – you know, ministers could decide to publish more and share more and we could do that.

Lady Hallett: Is there any risk to sharing more?

Ms Clare Lombardelli: I think … no, I mean, I – leaving aside – the point I was making earlier about I think it’s quite hard to separate out in some of these issues, you know, what’s policy advice and what’s analysis, I guess the – no, I mean, the practical risk, being frank, was we had limited time, it was an exceptionally busy period, you know, everyone was working – was working round the clock. If you are also on top of that, you know, thinking about publication schedules and what do you publish and handling the responses to that, being frank you would – we would have had less time to do the actual analysing of what was going on and less time to talk to ministers about it. So I think, you know, that is one of the concerns about that. But, you know, in terms of the sort of modelling where it’s separable from policy, you certainly could.

Ms Cecil: Now, just dealing with sight across government and indeed other organisations or committees, just touching on SAGE for a moment, one repeated theme coming through from the SAGE minutes, as you will have seen, is that SAGE were not dealing with the economic impacts but there was an understanding and it was recorded that Treasury were, and indeed you were asked about one of those meetings, and it’s the 58th meeting of SAGE on 21 September 2020, so again the same sort of time as the circuit breaker that we have been discussing.

At paragraph 5 of that meeting – of those meeting minutes it states that that work is being undertaken under the auspices of you, the chief economist.

Now, in your witness statement, page 15, paragraph 56, if I can just pull that up, you explain, while we’re waiting, in short form that you do not know what that work was being – what work that was or what was being referred to there. Is that right?

Ms Clare Lombardelli: I mean, I knew – I know what work we were doing in the Treasury on the economic analysis. What I didn’t know is what – I mean, what the author who drafted that minute intended by it, you know, I wasn’t at the meeting, it wasn’t checked with us, I think it was probably, you know, no doubt they were busy and under stress and perhaps it’s a loosely drafted phrase.

What we were doing in the Treasury, as I’ve described to you and is in those statements, is a huge amount of analysis on what the economic impacts of the virus were, and we were – we were sharing that with ministers. I suspect this is possibly just a phrase that was drafted that perhaps wasn’t as accurate as it could have been.

Counsel Inquiry: Could it also be attributable, though, to the lack of communication as between, for example, SAGE and the Treasury on these points? As I say, that lack of synthesis between the two: you’re reporting in to, as you say, ministers; but there is very limited interaction between the epidemiologists and other scientific committees, SPI-M, SAGE and the like, and then the Treasury?

Ms Clare Lombardelli: I think – I mean, I wouldn’t interpret this line in the minutes as that. I mean, I’m not an expert on SAGE obviously, but I think it is right that SAGE focuses on science, that is its expertise and what it is set up to do, I think it is right that where you have the expertise on the economy the people with that expertise are advising on the economics and then I think it is necessary that you have somewhere that brings that all together and synthesises it and informs decision-makers as best they can. So, you know, we were – we did have – you know, there was a good relationship between the Treasury and SAGE, in fact we had an observer from the Treasury at SAGE to make sure that there were not misunderstandings and those sorts of things, but I do think it’s right in a sense that, you know, the expertise focuses on what it’s expert in, and then it’s all brought together and synthesised in a place that is capable of doing that and has the capacity to do that.

Counsel Inquiry: If I can just pick up on the expertise point for a moment. As you say, Treasury and economics, obviously. Also though, within SAGE, you have SPI-B, the behavioural scientists, you also have the epidemiologists who have expertise actually in pre-pandemic situations, in how behaviour does change in pandemic situations, those sorts of issues. And to bring you back to one of the primary issues that you saw at the Treasury, a challenge was that inability to accommodate that behavioural change, to understand how that behavioural change might play out when it comes to modelling.

Would it not have been of benefit to have had assistance from SPI-M-O and SPI-B or any of those other committees with respect to your modelling because behaviour was such an integral part of it?

Ms Clare Lombardelli: I mean, to be clear, we had good relations and worked with behavioural scientists, both SPI-B and of course the behavioural insights unit and we had lots of conversations. I think the challenge was less was the information there – I don’t think the issue was the information was there and we weren’t using it, the issue was it was incredibly uncertain, these situations, and so it was just incredibly hard to know, for example, as you – you know, when the second lockdown happened, what – how would people respond. Would they respond in a similar way to the first? And actually we saw big changes. But the issue on process, I think – you know, the challenge was the challenge of the circumstance being incredibly difficult to deal with to understand to predict rather than we weren’t necessarily talking to or harnessing the expertise that was available in behavioural science. We were using what was available and feeding that into our modelling.

Counsel Inquiry: I’m sure that everybody will understand the inherent complexities in dealing with a situation that was evolving and that people had not been in before and all of those uncertainties, but notwithstanding that we do see in other areas, such as SAGE and SPI-M-O, that modelling is undertaken even with all of those variables, with those uncertainties. In fact it’s a point of some of the consensus statements is to deal with those uncertainties. We see probability risks and so on.

Is that not something that Treasury could have done to try to assist it when it came to providing advice on NPIs and potential impacts, effectively so that you could design smarter NPIs, and not necessarily have to resort to those lockdowns?

Ms Clare Lombardelli: We – I mean, we did do a lot of modelling and we did, as far – use the information as far as possible, so we were doing modelling and we were using it. For sure, I mean, on smarter NPIs, yes, and actually one of the things we did do, and you’ve seen it in the evidence, is build what’s called epi-macro models that bring together the epidemiologists and the macroeconomics as far as they can, and we did use those models and try to – and they have – you know, the results and the insights that they bring are very similar to the ones that you’re talking about in terms of smarter NPIs, and actually are there a range of restrictions that you could look at and how do you think about those in terms of their impacts on the virus and the impact on the economy.

Counsel Inquiry: But for the Treasury the epi-macro modelling was not a particular success; is that right?

Ms Clare Lombardelli: Well, I wouldn’t say – it was no less a success for the Treasury than it was for anyone else, if you like. We were using very similar techniques – we talked to a lot of academic epi-macro modellers and actually if you look at other organisations, you know, they were doing the same.

I think epi-macro modelling, you know, was clearly evolving very quickly and that was very useful through the pandemic and we learnt a lot about it. Where it was challenging, and challenging for everyone, is in terms of the insights it could provide into very specific decisions about which restrictions and at what time.

So we used it and we used it in the same way others did, and tried to bring what insights we could into our analysis. I mean, I should say at this point one of the things we did a lot was talk to people in other countries about what they were doing and their approach was – on the modelling and the analysis and people were – you know, it was to make sure that, you know, were we missing things, were there other things that we should be thinking about. And others were taking a very similar approach.

So I wouldn’t say the epi-macro modelling wasn’t a huge success, it sort of – you know, what is a success depends on what you’re asking it to do. It gave us some insight. It wasn’t a particularly useful tool for, you know, making policy decisions about, about restrictions.

Counsel Inquiry: Indeed. What you say in your statement is that it had limited practical application, they weren’t a big part of advice to ministers, essentially, as a consequence.

What were they replaced by?

Ms Clare Lombardelli: What do you mean, sorry?

Counsel Inquiry: As I understand it, you ceased using those epi-macro models and what filled that gap? You said they had some utility.

Ms Clare Lombardelli: Yeah. I can’t recall actually if we sort of ceased using them. I wouldn’t look at that – what we had was we had a suite of models that we used and we used those models throughout the pandemic for different – in different ways for different things, as was sort of useful, and we also had the sort of data and analysis that we were using, and we brought those together and we used them through. So it wasn’t – it would be wrong to sort of think, well, we developed an epi-macro model, we tried it, it didn’t work, we threw it away. That wasn’t the sort of approach that we took. We – like I say, we were all the time evolving what was useful in the modelling capability.

And depending on what the specific question is that you’re trying to answer, in some areas a model might be useful, in other areas it might not be, in some areas, actually, you know, better to look at the evidence analysis on the ground. And we doing a combination of things throughout and adapting – basically, I mean, as you said, huge uncertainty. We were bringing together what was available and what we could usefully use and, you know, maximising the information that we could bring to any specific question or the questions overall.

Lady Hallett: The stenographer is struggling, both of you.

Ms Cecil: That’s my fault. Let’s both try to slow down.

Ms Clare Lombardelli: Sorry.

Counsel Inquiry: Not at all.

I’m going to move now to a different type of model, if I may, very briefly, and that’s the toy model. So a toy model was developed in the later stages of 2020 going into 2021, and indeed provided to the Treasury amongst other departments.

Now, just if we can just deal with what a toy model is very briefly, it’s a very basic model, you can play around with the assumptions, and as a consequence run different scenarios. Is that a very high-level overview of a toy model?

Ms Clare Lombardelli: Yes, it’s a simplified model.

Counsel Inquiry: Exactly.

Now, there were concerns about the use of the Treasury’s engagement with that toy model.

If I can just call up INQ000196031, this is an email chain that involves Angela McLean, so the Chief Scientific Adviser to the Ministry of Defence but also the Deputy GCSA at the time, Philip Duffy and Ben Warner, who we’ll be hearing from later.

If we can go over the page, please, to page 2, and what we see here is the email from Dame Angela McLean, and it explains that she has concerns with how HMT has been utilising the toy model. She explains that HMT have changed the model after she had quality assured it. She doesn’t know how that happened. Obviously this is all dealing with epidemiological modelling, so something that’s not strictly, as you would say, within the expertise of Treasury, in the initial instance.

She makes it explain that any modelling that comes out of Treasury as a consequence has no endorsement from her, that they’re on their own. And she continues to say that there is an “inability previously to spot egregious errors” in other things that they have been sent:

“… I do not have any confidence in their ability to hack a simple, sensible model.”

Were you involved at any point within the toy model?

Ms Clare Lombardelli: I wasn’t, I’m afraid.

Counsel Inquiry: Do you have any understanding or were you aware of the issues that were being discussed in relation to the Treasury’s use of the toy model?

Ms Clare Lombardelli: Not really. I understand that the toy model was a – as referred to – sort of simplified epidemiological model that I think the Joint Biosecurity Centre in the Cabinet Office constructed, with input from other departments, in particular from SPI-M, and so I was aware it was happening. I think Treasury modellers, you know, were involved in – and as you can see here, it wasn’t economic in nature, so I don’t, I’m afraid, have any first-hand knowledge of it.

On the email exchange, I also – you know, I saw this email and I did speak to Ben Warner I think after it, but that was much more broadly, just to talk about actually the importance of making sure that this modelling work fed into the Covid Taskforce at the time, who were the people responsible for bringing it all together. But I’m afraid on the details of what’s being referred to here, I simply don’t know.

Counsel Inquiry: Thank you.

If I can turn to some of the various policies, I appreciate that you were not in charge of policy, but you have some understanding owing to your previous role and, indeed, your role as the chief economist generally.

If I may touch upon the summer of 2020, again you will be aware that there were criticisms that the Treasury was suffering from optimism bias at that point. Is that something you saw within your role at the Treasury at that time? Was there a belief that you were coming through the pandemic, moving through, getting ahead of the virus?

Ms Clare Lombardelli: I don’t … I don’t think the Treasury had optimism bias, I would say – you know, maybe I would say that, indeed, if anything, the Treasury’s normally accused of the opposite. But in this particular – I mean, what was going on at the time I think was the government – you know, we were – restrictions were being lifted because the outlook looked a bit better, so I think across the piece, you know, as restrictions were being lifted, you know – and perhaps people did want to sort of look forward and feel this was behind them, but I don’t think the Treasury had a – took a – it certainly didn’t take at any point a different view on the epidemiology that than the epidemiologists would have done. I mean, we were getting our information about the virus and its progress and its outlook from the experts on SAGE and through that process. So I don’t think we had a specific – we certainly didn’t have a different view of the epidemiology.

Counsel Inquiry: This was at the time when the Eat Out to Help Out policy was introduced, so July/August of 2020. Who and at what level was that policy being driven forwards by?

Ms Clare Lombardelli: So overall I would say the – I mean, the concern at that time on the economic side was around, as the economy was coming – we’d had this period of restrictions with, you know, very large impact on activity in the economy and on unemployment and there was a concern, and the economic analysis sort of showed this, that there was a risk that if you – if you have long periods of, for example, inactivity, it can have very bad impacts on your employment in future, on your life chances, and we were very conscious of the fact that – the desire was to make the economic costs, if you like, of Covid as short lived as possible and to bring back activity once the economy was re-opened, because of the path of the virus.

So the concern was around the risks to the economy from lower levels of, for example, consumption, because the UK is a very consumption-heavy economy compared to others, but lower levels of economic activity and the impact that would have had on employment, and, as I say, the understanding that periods of employment, you know, in a sense – periods of inactivity, the longer they go on the bigger impacts they can have, and in particular we know that the distributional impacts are much greater for people who are at lower ends of the income distribution or people who are on lower skills.

So we were focused on and thinking about the impact of – on the level of economic activity and jobs, and so the Treasury produced – developed and produced what I think was called the Plan for Jobs, which was a range of policy interventions, all of which were about trying to support the economy through this quite difficult period as it re-opened knowing that, you know, businesses would have been under distress, that people’s jobs were at risk and the like. So that was the plan.

The – Eat Out to Help Out was one part of that, of that package. But that was – so it was – there was, you know, a desire in the government actually to sort of move forward on – you know, to provide support to the economy as it came out of this period of having quite high levels of restrictions.

Counsel Inquiry: So was this being driven by ministers or within Treasury itself in terms of officials?

Ms Clare Lombardelli: Well, I mean, policy decisions are ultimately always for ministers. The economic analysis we were producing was very clear that there were severe economic risks to this period and that the economy was suffering quite greatly in the period, and ministers obviously wanted to know in what ways they could support the economy through what was a really challenging period for, like I say, employers, businesses and the like.

Counsel Inquiry: Now, the position is that neither Sir Patrick Vallance, the CSA, or Sir Chris Whitty, the CMO or indeed their deputies were consulted in relation to Eat Out to Help Out. Do you know if any scientist was consulted in relation to Eat Out to Help Out?

Ms Clare Lombardelli: I don’t, I’m afraid. I wasn’t in – heavily – you know, the process by which the Eat Out to Help Out policy was put together I understand utilised the sort of architecture we use for budget processes, but, you know, I was involved in the sort of economic evidence that fed into these – this sort of identification of the challenge and our particular concerns about, for example, hospitality. I don’t know the details of the clearance process.

Counsel Inquiry: Now, you are somebody that was also speaking almost daily, on occasion, to the CMO and the CSA. Did you not ever raise it with them?

Ms Clare Lombardelli: Yeah, I … I think daily, I understand where that comes from, from the Institute for Government report. I’m not sure – I mean, early on in the pandemic we spoke very, very regularly, particularly in those early weeks in March and April when it was – the uncertainties were higher. We were – I mean, I did speak to Patrick and Chris regularly when it was useful to do so. I don’t know if I did during this period.

But the decisions about how policy is developed and, you know, who is involved in it and all of that were not decisions that, you know, I would be – you know, they were not decisions for me. And, like I say, we used the architecture we use for when we develop any other fiscal event for the Plan for Jobs overall, so I don’t know who was sort of involved in each component.

Counsel Inquiry: You dealt with the economic aspects. Do you know if the risk of potentially increasing infections was considered at all?

Ms Clare Lombardelli: I don’t know. I mean, the – I don’t know the policy was conceived in the context that, you know, it was safe to lift restrictions and activity could return.

Counsel Inquiry: Now, with regard to that policy, if I can just call up INQ000235019, very briefly.

We see that there were two predominant aims to it. We see that at the very top here. The first was:

“To support the economic recovery by stimulating consumption in the hospitality sector …”

And the second is really looking at behavioural change:

“To incentivise consumers to return to the hospitality industry and consume sit-down meals out by reassuring people it was once again safe to consume and altering social behaviours that have become entrenched.”

Essentially to encourage levels of contact that had previously been restricted considerably.

Would you agree with that?

Ms Clare Lombardelli: I would – look, I would agree that, yeah, the objectives were to, as I say, support economic recovery and also to limit what was often called the scarring effect of, you know, what would be the long-term impact of these – of the virus and of the measures taken to control it, yeah.

Counsel Inquiry: Now, towards the end of the scheme, there was feedback that it was causing problems. Were you aware of that feedback?

Ms Clare Lombardelli: I wasn’t, no. I wasn’t responsible for the policy side of the scheme.

Counsel Inquiry: Just two other areas briefly in relation to the involvement of the Treasury, and financial support. The first relates to self-isolation payments for those in low-paid employment or unstable employment, the gig economy, zero-hours contracts, and we’ve heard evidence from Professor Yardley, indeed from Lee Cain, that it was important that financial assistance was provided to individuals to allow them, to enable them to be able to self-isolate. But we have heard that throughout Treasury pushed back and refused to extend that finance, aside from some final payments that were made in September of 2020, but that it continued to be a problem regardless.

Were you involved in any modelling or any analysis in relation to how much that would cost and any cost-benefit analysis?

Ms Clare Lombardelli: No, no, I wasn’t. I mean, those – I was aware that – of the sort of policy issue in discussion. The relevant policy team which would have been in, you know, the public services part of the Treasury, or the welfare part of the Treasury, would have been the – would have been handling that issue and would have undertaken whatever analysis was necessary. It wouldn’t, if you like, have been macroeconomic in nature.

Counsel Inquiry: Do you know if it was it a decision taken out of principle or whether those impacts and analysis was actually undertaken?

Ms Clare Lombardelli: I don’t know, I would expect that analysis – you know, that there would have – the decision would have been taken on the basis of an understanding of the issue and analysis, but I’m afraid I can’t add any detail.

Counsel Inquiry: You may not be able to help me with this next one, then, because it really falls into the same type of category, but if I can just ask the question. Payments for care workers, significant issue being potential transmission as a consequence of care workers working in more than one care home or establishment, as a consequence of the fragility of the sector in short, again HMT were approached with proposals to allow for those individuals to be compensated for not being able to move between different care homes, but HMT refused to expand or extend any financial provision in that respect. Do you know anything about that decision?

Ms Clare Lombardelli: I’m afraid not. Again, the relevant policy team would have been working with, you know, the Department of Health and Social Care and would have been considering that.

Counsel Inquiry: Thank you.

Just turning, then, if I may, to that whole period, from the Eat Out to Help Out, the summer, and then into the autumn when some of these policy decisions were being discussed. Were you aware that the Chancellor was being referred to as Dr Death in some quarters across government?

Ms Clare Lombardelli: I wasn’t, no.

Counsel Inquiry: Were you aware that he had been perceived to have an anti-lockdown, anti-restriction approach, feeding any of those sorts of comments?

Ms Clare Lombardelli: I wasn’t. We were, you know, providing advice and information to him. You know, he will have been aware of the economic consequences of these decisions.

Counsel Inquiry: Finally, if I can just turn to one last topic, and that’s in relation to the potential integration of, and we’ve discussed it to some extent, science alongside economics, health, social impact, material.

If I can just pull up an email, please. It’s an email from you. It follows on from a 5 June 2020 seminar on those issues.

It’s INQ000235261.

What we see here, as I say, it’s an email from you. It’s to some extent a read-out of what’s taken place at that earlier meeting. It’s a meeting with Ben Warner, chairing it, at Number 10. You explain that you’re not sure if anything will come of it. We continue onwards:

“The discussion would have felt very familiar – the economists all did a very clear pitch on smarter NPIs being able to deliver the same level of virus control at lower econ cost.”

You refer to a paper. But the part that I’m interested in is the next section, which states:

“There was a general conclusion (by economists) that the economics is not being considered enough.”

And indeed you will be aware that the Chancellor at the time, and subsequently, has expressed that opinion.

“And a desire for a place to bring this together.”

So this is quite early on in the pandemic, we’re talking about 5 June 2020.

Three options were proposed at that time, so it’s an effort to synthesise some of this material: (1) is an economics SAGE, (2) is a single model, effectively presumably drawing together the science, the epidemiology, the health and the economics all into one model; or (3) something more informal.

The very first thing you say is that:

“The economists [obviously] killed the single model …”

Why was that obvious?

Ms Clare Lombardelli: I mean, it was obvious because if you imagine attempting to construct a single model that could solve, if you like, bring together all of the issues that the government had to decide over, so, you know, considering health, the – both the sort of epidemiology and the virus, but also actually the wider health impacts, if you then think about adding in economics, adding in social distributional issues, you know, if you were to sort of put – imagine this model also had to have a distributional feature where you were looking across, you know, gender, ethnicity, income groups, if you were then to add in educational impacts, if you were then to add in impacts on other public services – I think you could quite quickly see that there’s no single model that could, in a sense, solve – I mean, it would be wonderful if you could just have a model and solve for what the government’s policy response should be, but I think if you think about the reality of that, one single model could never do that. What you can do with modelling is look at different parts and aspects of it. So I – that will be, you know, why.

Counsel Inquiry: In relation to the economic SAGE, that found slightly greater favour, and then it’s spoken about in terms that “Ben Warner would follow up”:

“Ideally [you] would doc [that] … into existing structures and processes and use it to get a greater weight on the [economic] arguments in No10 thinking.”

There was no real follow-up, was there, in relation to this? Nothing came of this discussion in terms of pulling together an economic SAGE or anything of that nature; is that fair to say?

Ms Clare Lombardelli: Yeah, nothing came from this specific discussion. I do remember also having quite – some discussions with, for example, Patrick Vallance about the way we could do this on the back of some conversations he’d had, and we did set up a sort of partnership with the Royal Economic Society and use that to get a wide range, actually, of economic input, which was incredibly useful, into the process. Again, not quite like SAGE in terms of, you know, it wasn’t meeting weekly, with commission papers and the like, but you’re right, in response to this particular email I think at the time we didn’t – we didn’t follow up by effectively establishing an economic SAGE or similar.

Counsel Inquiry: Indeed. You will have also seen and it’s been suggested that the Treasury itself shut down that idea of an economic SAGE model, that senior officials within the Treasury vetoed proposals from other departments to establish a cross-department group to discuss the economic impacts; is that right?

Ms Clare Lombardelli: Yeah, I don’t really – I’m not aware of there being a specific proposal that was, in a sense, shut down. What we were very keen to do is make sure that the economic analysis and evidence and arguments were feeding into the Cabinet Office process and that they were considered as part of that, and – you know, so we were really – we thought the right answer to this was that you needed a central government place that was bringing together all of these incredibly, you know, different arguments and putting them – you know, bringing them together. And we thought that was, you know, incredibly important and of course, you know, how that was done evolved through the pandemic, but it was absolutely essential that there was a place that could bring all of this together.

Counsel Inquiry: Is it your view, therefore, that that place ought to be the Cabinet Office as opposed to either an economic SAGE or a body that sits above the various different committees to synthesise that advice?

Ms Clare Lombardelli: I don’t think it would be for an economic SAGE to bring together all the different arguments, in the same way that I don’t think SAGE as it is should consider – you know, that should be focused on science. If you were to set up an economic SAGE I would think you would very much want it to focus on economics, and that’s where you could ask it – you know, could consider some of these issues around modelling.

I wouldn’t suggest you had a committee of economists deciding or – or solely being the people thinking about the other issues, education, for example, health – again, I don’t think it’s for economists. So I do think it’s very much a case that you need the experts to focus on their expert areas and that then to be fed into – and for them to talk to each other and learn from each other but, you know, you have a place where it all comes together. That could be the Cabinet Office. I mean, that is what the Cabinet Office is for, and I think that is right. Whether within the Cabinet Office you would want to, you know, change it, have different structures – we’ve done it before, you know, there’s things like the National Security Council, and actually in the financial crisis we had I think it was called the National Economic Council. So, you know, those sorts of issues. But I think – that is the role of the Cabinet Office, you know, I think that’s – and that makes sense. And economic SAGE, I think if you – you could do, you could certainly have one and set it up. I would think its scope should be limited to economics.

Ms Cecil: Thank you.

My Lady, those are all the questions I have. There is one question, as I understand it, from the Long Covid groups.

Lady Hallett: Mr Metzer.

Questions From Mr Metzer KC

Mr Metzer: Thank you, my Lady.

Just one topic, please, Ms Lombardelli, on behalf of the Long Covid groups.

You said this morning that briefings were shared with the Chancellor to ensure that he was fully informed. Was the Chancellor formally briefed on the economic impact of large numbers of people suffering from disabling long-term impacts of Long Covid?

Ms Clare Lombardelli: Once we became – well, once, if you like, the Long Covid – you know, the health community had become aware of Long Covid, that would obviously – that information would have been shared with the Treasury, and we would have reflected it in our evidence and analysis alongside the other long-term impacts that we would – that we were very concerned about across the board. But, you know, he would have – he would have been aware.

We wouldn’t have done – I mean, it’s a health issue in and of itself. We wouldn’t have estimated, if you like, a specific economic cost for it but we would have – we were thinking about and we were doing what we could do bring evidence and analysis on the long-term impacts across the board, including, of course, health impacts like Long Covid.

Mr Metzer KC: Are you able to assist as to when that was?

Ms Clare Lombardelli: I can’t recall, I’m afraid, and, as I say, I don’t think there would have been a specific point when he would have received a specific piece of evidence that was – a specific piece is analysis that was – you know, “Long Covid, the impact is X”. What we would have done is taken the evidence and analysis about all the long-term effects, and that would have included Long Covid.

Mr Metzer KC: Do you agree that the disabling impact of Long Covid would have had an economic effect?

Ms Clare Lombardelli: The impact – well, all the long-term effects, if you like, would have had a range of impacts, health – but also on the economy in some cases. I mean, there will be an economic effect, obviously, for people who are suffering from Long Covid in terms of their labour market activity, and the like.

Mr Metzer: Thank you very much indeed, Ms Lombardelli.

Thank you, my Lady.

Lady Hallett: Thank you, Mr Metzer.

Thank you very much indeed, Ms Lombardelli. Sorry.

Just trying to pronounce your name made me cough, I’m sorry about that. Thank you very much for all your help.

The Witness: Thank you.

(The witness withdrew)

Lady Hallett: Right, I think we’ll break now, partly so I can cough quietly. Well, not quietly. I shall return at midday.

(11.42 am)

(A short break)

(12.00 pm)

Lady Hallett: Mr Keating.

Mr Keating: My Lady, may I call Stuart Glassborow, please.