IEA responds to Chancellor’s announcement of increased support for businesses and workers
Christopher Snowdon writes for The Sun
“The longer we are trapped in this government support scheme limbo, the more important it is for the Chancellor to turn his focus to ensuring a dramatic economic bounceback.
“This will require a radical package of measures to reduce the tax and regulatory burden on businesses, if we are to see anything approaching a V-shaped recovery.
“If this virus is going to be with us for a prolonged period of time, we need urgently to reconsider regional, local lockdowns and move towards selective demographic lockdowns, with a focus on shielding and providing support for the most at-risk groups, including the elderly and those with underlying health conditions.”
IEA Economics Fellow Julian Jessop said:
“Whether the additional Covid-19 restrictions are appropriate is debatable, but there is at least a good economic case for more financial support when businesses are unable to trade as normal.
“It makes sense to protect jobs and incomes during temporary lockdowns, rather than expose firms and employees to the additional costs and uncertainty of firing and then rehiring again. This will also minimise the risk of longer-term economic scarring, including much higher unemployment.
“This is the fair thing to do as well when particular regions, or sectors, are bearing a disproportionate share of the burden of a national crisis. Managing a pandemic is a textbook example of a ‘public good’ when a collective response is required.
“The additional hit to the public finances is concerning and clearly this level of support is not sustainable indefinitely. In the meantime, it is right that fiscal policy plays its full part in preventing even bigger economic and social problems.”
Notes to editors
For media enquiries, please contact Emily Carver, Head of Media, on 07715942731 or [email protected].
Mark Littlewood and Julian Jessop are available for interview and further comment.
For further reading on how the Chancellor can boost our economic recovery, click here to read IEA report, ‘The Chancellor’s Post-Pandemic Choices’.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.