A glimmer of hope may help thousands of firms on the brink

The Times Red Box column today published an article by Theresa Villiers MP on why it is now time to talk about when and how the Covid shutdown can start to be lifted....

"Ministers are understandably cautious about embarking on a discussion of when and how the Covid lockdown can start to be lifted because they fear dilution the vital “Stay Home, Save Lives” message. But they should feel able to start to talk more frankly about an exit strategy.

When chilling forecasts of what might happen if Covid-19 spread unchecked first emerged, they were accompanied by analysis of how this tragedy could be reduced by social distancing. That analysis made assumptions about human behaviour which have turned out to be much more pessimistic than has proved to be the case.

The British public have risen to the challenge of this great national effort. The shutdown has been more extensive than originally envisaged (for example schools were initially intended to stay open) and compliance has been much greater.

That should give confidence that public commitment to the lockdown will not weaken just because we are given a clearer indication of when and how life might begin to return to normal.

The Office for Budget Responsibility - a circumspect and cautious organisation not given to outlandish scare stories - has predicted a contraction in our economy of 35% in the second quarter of this year. That is the worst since the Great Frost of 1709.

Whilst they expect a rapid bounce back in the economy, the 2 million increase in unemployment they predict could take much longer to come down. And the support package introduced to stave off economic disaster would, the OBR conclude, see Government borrowing for 2020-21 climbing by £218 billion to £273 billion, or 14% of GDP. That is the largest single year deficit since the Second World War and wipes out all the painstaking work done over the last decade to repair the public finances after the 2008 crash.

So we urgently need to find a way to allow the economy to wake up from the medically-induced coma that social distancing has caused, whilst we continue to contain the disease and save lives.

Ministers should reiterate strongly that businesses which are not in the list of those, such as pubs and restaurants, which have been ordered to shut, can and should continue to operate.

And talking more openly about bringing us out of lockdown will give people hope. A glimmer of hope can make it possible to keep on workers and stave off creditors for a few more weeks in the expectation that a reprieve is on the way. That could provide a lifeline to thousands of businesses on the edge, and help to mitigate the long term damage that the pandemic will inevitably cause to UK prosperity."