For how long can the Treasury afford to bankroll the economy?

Linda J. Dodson

While all around are easing back, Britain, a latecomer to the lockdown party, remains stoically committed to its social distancing regime, with no date yet signalled on when it might come to an end.

Some are taking matters into their own hands; my sense is of a little more traffic on the roads, a bit more economic activity and a slight loosening of resolve, suggesting we are already past the low point of the slump. But mostly the measures are holding, perhaps too much so.

People remain fearful, and with what is in effect a universal basic income – fast tracked into existence by the pandemic – to fall back on, may be reluctant to return to work even after the Government gives the go-ahead. As a nation, we are losing the will to work. The Treasury’s various interventions have anaesthetised the wider population to the economic consequences of the Government’s pandemic response.

Two former Tory chancellors – Norman Lamont and Philip Hammond – have now said it, and I imagine their view is shared by virtually all seven of the others still alive who have held the position; we can’t be intimidated into not talking about the economic aspects of this crisis by those who see prolonged maintenance of the lockdown as an almost moral public duty. It is obviously right that lives and health remain the priority, but it is just not practical or affordable to keep the economy in deep freeze for much longer, notwithstanding the dangers of a second wave.

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