Dr. Kieran McQuinn:

The reality is those sectors have been effectively shut down over the last eight or nine months, particularly over the last two to three months, since the level 5 restrictions were brought in. There are huge numbers of people in those sectors who are out of work and a huge number of businesses that have been temporarily closed. By definition, when we move into the vaccine period and the economy starts to reopen, we will then see, hopefully, dramatic improvements in employment in those sectors. We will begin to see the unemployment rate across those sectors begin to fall on a persistent basis.

The evidence last year would suggest that is likely to happen. We looked at the reaction of the economy when restrictions were eased initially. There was certainly a fairly quick bounce back and rebound in the sectors most affected, the ones mentioned by the Deputy. Our expectation is that something similar could happen this time around. However, the one drawback is the scarring effect. There is a great likelihood that a number of businesses that were just about able to survive the first lockdown will not be able to survive what happened this time, which is the lockdown last year and the one we have just experienced. There is that risk.

However, the point could be made that if we enter a general opening up of the economy due to the vaccines, and if Covid rescinds fairly quickly from the public consciousness, there will be a boost in confidence. People will feel that maybe they are over Covid now; it was a dreadful episode but it is in the past. Therefore, confidence can come back across all the different sectors, whether it is investor confidence, consumer sentiment and so on. That can drive the economy and recovery as well.

There are countervailing forces on whether that will offset the scarring effects or whether the scarring effects will have a large impact on the recovery. However, as the economy opens, there will certainly be a large increase in employment across the sectors that have been shut down.