We Cannot Stay in Lockdown Forever
“We cannot stay in lockdown forever” claimed the Foreign Secretary last week.
Dominic Raab explained that as a result of growing divisions among the scientific advisers, ministers would need to exercise a “greater degree of judgement” in opening up the economy.
In the Treasury, there can be little or no division. The cost of lock down is escalating. Government borrowing in April was a staggering £62 billion. In the full year the deficit will increase to £300 billion. Economic activity has slumped by an estimated 30% in the second quarter of the year.
The number of workers on the furlough scheme has risen to 8.4 million. A further 1.5 million are unemployed. No wonder, Rishi Sunak the Chancellor of the Exchequer, is the most popular member of cabinet. He is now the largest employer / payroll master in the U.K.
Primary schools and outdoor retailers are re-opening at the beginning of the June. The retail sector will be free to open in the middle of the month. All operations will be subject to stringent health and safety guidelines.
Pubs and Restaurants may be free to open in July. The two metre social distancing guideline will be reviewed. The World Health Organisation has set the one metre benchmark, with which the UK will have to comply, if some semblance of profitability is to return to the leisure sector.
Matt Hancock, the Health Secretary is “a little more optimistic” about the chances of people going abroad for their summer holidays. Priti Patel will have to be quarantined if the Health Secretary is to have his way.
Home Office plans for a 14-day isolation period for arrivals into the UK will “kill the travel industry” say aviation chiefs. The system is due to take effect on June 8th. Simon Mcnamara of the International Travel Association explained, “The plan for quarantine, is effectively the same as locking down your country. People will not travel.”
Social distancing may be ditched, plans for quarantine may be quashed. The economic pressure is increasing to get Britain back to work. In March the priority was public health and the limitation of fatality rates. Now as the epidemic eases, the emphasis is on a return to normality and fast.
Tensions are growing between cabinet and scientific advisors. Some are fearing the restrictions in England are being eased too quickly. Arguments continue for a staged release in parts of the country, where a “significant number of cases” remain.
Fears of a second wave abound. Dominic Raab has made it clear further restrictions will be applied to particular regions if there is an uptick in infections. Dr Jenny Harries, the deputy chief medical officer, has advised the public should act “very carefully and try to use the relaxation measures sensibly”.
The genie is out of the bottle and heading for the beaches. It will be difficult to coach the public back inside now restrictions have been relaxed.
In the USA, the number of unemployed as increased to 40 million. In the UK without the furlough scheme in place the number of people officially out of work would have risen to 10 million.
The furlough scheme cannot continue forever. The Treasury has announced some tapering into October and elimination of the relief in November. Tough talk from Treasury may well yield to reality towards the end of the year.
The recovery will be V shaped (as usual). The return to normality will be much swifter than many expect. We expect a significant bounce back next year with fiscal and monetary stimulus to ease the process.
It really is time to get Britain back to work, we cannot stay on lock down forever.
About John Ashcroft
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