Express & Star comment: Economic impact of coronavirus clear to see
The graphs look as though someone’s hand has slipped. They gently undulate through the past two decades, rising and falling as the economy grew and contracted. Then, when they reach March 2020, they fall vertically, as though off a cliff.
Economic output stopped by the biggest amount ever while benefit claims rose more quickly than had been thought possible. The worrying thing is: we ain’t seen nothing yet. As things stand, Britain has the third worst record in the world on Covid-19 mortality, having previously topped that table, while it has the worst economic record of any developed nation on the planet. It’s not a good look.
The number of people claiming benefit has soared by 23 per cent to 2.8 million and the true effects of the Covid-19 crash will not be fully felt until October, when Government support ends. Our service economy has been uniquely exposed to the virus. Those who for years have called for the Government to expand the nation’s manufacturing roost have seen all their worst nightmares come true.
Rishi Sunak has worked miracles in keeping people on payrolls when they would otherwise have joined the unemployment line. However, it remains to be seen whether furlough was simply a way of delaying the inevitable.
The Government finances are in tatters. A decade of austerity, designed to rid us of our national debt, has been wiped out. The pain was for nothing. Tax receipts are down, income support is up – the Treasury has a financial black hole that will take a generation to fill.
There are numerous issues for the Government to assess, not least the pros and cons of the 2m social distancing rule. That is a question of health rather than wealth, of course, though the drums are beating for a reduction to that. Large sectors of the economy simply won’t work with it in place: what happens to driving instructors, pub landlords, live music venues and offices where staff don’t have the room to sit 2m apart?
Just as the nation clamoured to learn the route map out of lockdown, now we need to know what fiscal packages are in place to reboot the economy.
Germany is among the developed nations to show its hand; our own Government must follow suit. Lest we forget, we have the prospect of a second wave and a messy hard Brexit to contend with before the year is out.
