“We must also recognise that every day this tier system will cost the economy about almost a billion pounds”

That was the claim from Conservative MP Tobias Ellwood this morning. He was speaking ahead of tomorrow’s parliamentary vote which is set to enshrine the new tiered Covid restrictions for England into law.

Mr Ellwood, whose Bournemouth East constituency is destined for Tier 2 on Wednesday, is among a number of backbenchers to express unhappiness over the new rules, which many fear will deliver a hammer blow to the hospitality sector.

So is the figure accurate?

The source

We asked Mr Ellwood for the source of his claim. It looks like it’s from this article in the Sunday Telegraph, which says “Boris Johnson’s decision to impose tougher Covid tiers ‘will cost £900 million a day’”.

It bases the figure on analysis by the Centre for Business Research (CEBR) think tank, which predicts GDP will be 13 per cent lower in December than the same time last year.

The catch

But there are some important caveats.

The economist behind the analysis, Douglas McWilliams, told FactCheck it’s based on a comparison between December 2020 projections and a “normal”, pre-pandemic situation.

That’s important because it means that the £900m figure cannot tell us how costly the tier system is in and of itself – as opposed to other types of restrictions, or a situation where the pandemic is ongoing but there are no official restrictions in place.

So can we separate these things out? It all depends on what we use as the “counterfactual” or “road-not-taken” scenario.

Mr McWilliams told us that his “very rough estimate […] is that compared with what might have happened had lockdown and other restrictions ended at the beginning of December, the fall in GDP might be around half of the 13 per cent”.

On that basis, according to this research, the tier system would see the economy £450m per day worse off compared to a “pandemic-but-no-restrictions” December. Though Mr McWilliams was keen to stress that all of these numbers are “rough estimates […] and no more”.

And of course, the choice is not binary: it’s not tiered restrictions or nothing at all. The government could have gone for any number of alternative routes.

The cost of those have not been quantified here – so we’re still left with a situation where we can’t say how much the tiered system will cost the economy versus other options available.