The coronavirus pandemic is set to trigger the largest UK recession in postwar history as consumer demand collapses, unemployment rises and businesses are forced to close or reduce their operations. Can the government prevent the slump turning into a prolonged depression? What lessons can be learned from the 2008 financial crisis? And what economic model should the UK adopt in the future? In the New Statesman‘s recent webinar on coronavirus and the economic crisis, journalist Paul Mason, executive director of think tank IPPR Carys Roberts, and economist Ann Pettifor explored the pandemic’s economic impact in the UK. The discussion was chaired by senior online editor George Eaton. To find out about our future events, click here.
Watch the event back here:
Key quotes from the discussion:
What comes after the pandemic and who will pay?
“There can’t be any going back. We need to think about building a new economy. One in which people are secure. One that generates green jobs. What this crisis has shown is that the state has always been the backbone of the economy. We’ve seen the state taking on risks to support the private sector, and after we need to have a conversation about the size and role of the state. It’s also shown our social security system isn’t fit for purpose…We can’t repeat what we did last time, with the very poorest bearing the cost for this crisis. When it comes to who pays, we need it to be those with the broadest shoulders.” – Carys Roberts
A shortfall of income
“This isn’t a shortfall of demand, but a shortfall of effective income. The crisis is that people don’t have an income. The government needs to provide that income, not just because it’s essential to survival but because its essential to the economy.” – Ann Pettifor
A new economic model
“The government and Labour need to think less about stimulus and more about a new model for the economy…before this crisis there was $325 trillion of debt…It was a stagnant, low-profit, low-productivity system and we need a new one.” – Paul Mason
Green jobs and full employment
“I want us to embrace the Green New Deal. I want us to think big…We should be thinking about creating full, skilled, well-paid employment that will provide incomes to the individual but also tax revenues for the state. The government needs to play a role in this, even through central bank financing, to create these types of green, high-productivity jobs that are about well-paid, skilled employment.” – Ann Pettifor
Help for the private sector
“The support for business is not getting there. On 1 April only £1bn of loans had gone out as opposed to the £300bn on offer. This is a huge worry, especially for SMEs. The furlough scheme isn’t supporting everyone. People are falling through the gaps and the only support is Universal Credit, which is totally inadequate.” – Carys Roberts
The solutions of the left
“Universal Basic Income is rising up the agenda. State ownership is going to have to happen. And with the monetisation of debt, a lot of the right are already there but the social democratic left aren’t. That’s where Keynes was in the 1930s: the printing of money and use of money to stimulate demand and move money back into the real economy. But I think the right can get there just as quick as some of the left can…want us to talk to the centre-right. Unlike in 2008 we have a chance of convincing the centre-right to adopt these policies.” – Paul Mason