So, what to do? First, declare lockdowns. Close hospitality. Require very limited bubbles. Close all hospitality. Close all non-essential shops. Close schools and universities. Require working from home. We have to do this.
The requirement is because a) we have to protect people b) we have to protect the NHS c) we have to protect essential economic services from the utilities to food supply. We cannot do that unless everything else closes down.
But then what? Economic support does have to follow. First and foremost, furlough has to return. But this time there has to be fraud detection built in, whilst support has to go to the 3 million who lost out last time. They cannot lose again.
Second, the social safety net has to be raised. The £20 universal credit payment has to be restored. Other protections have to be delivered to protect those unable to meet bills.
Third, small business loans have to be available again, but once more with anti-fraud measures built in. Proper checks have to be made this time. It would really not be hard to do given how bad the checks were last time.
Fourth, the Bank of England has to indicate its support for the economy. Its recent interest rate increase has to be reversed as a clear signal of that. Negative rates may need to be considered.
Fifth, QE has to return, but only as a short term measure. We cannot fuel inequality with QE as the benefit of it goes mainly to the wealthy. What this means is that the consequences of permanent QE have to be planned for. So far we pretend it will go away, and it won’t.
Sixth, emergency tax measures are required, targeted wholly at the wealthy to ensure maximum recovery of QE funds injected into the economy and to mitigate risks of inflation, especially in asset prices.
Seventh, longer term plans need to be drawn up. We need (in no particular order):
– A permanent vaccination service
– A significant increase in NHS capacity
– Investment in ventilation and filtration throughout the economy (a precursor for the investment funded by QE to come)
– A national investment bank to better direct QE into the economy in the long term
– A recognition that QE is now a part of government funding and that government economic reporting needs to change to recognise the fact
– An end to Bank of England independence
– A job guarantee
– An enhanced social security system
– A mass education programme on why we need all this – starting in schools but extending to any and every available media
– Preparation for the environmental change transition to come
I think the mass education programme is a nice touch. For how could we expect people to put up with all of this without propaganda?