O Captain! My Captain! Rise up and hear the bells;
“He is risen”. According to the Times, that was the first response of a member (it doesn’t say which) of Boris Johnson’s family, on being told by an aide that the Prime Minister had been moved out of intensive care at St Thomas’s Hospital, appropriately enough, as we approached the Easter weekend.
It was an odd few days and regardless of political persuasion, most people were pleased to hear he was out of danger and embarking on his recovery.
Big softy that I am, I was one of the lumpy-throat brigade, watching Johnson’s speech in praise of those who probably saved his life. I know I’m not alone. Some of my most cynical, Labour-voting friends felt the same way. The last thing the country needed was any further destabilisation caused by the Prime Minister’s continuing ill-health.
So, will the Prime Minister’s experience at the sharp end of the NHS lead to a Damascene turnaround on funding for the service? Will the next decade see unprecedented levels of investment? Will doctors and nurses finally get all the money they need for every department?
No, of course not. There will never ever be enough money to fund everything the NHS is required to do. However, I’d like to think that there may be a renewed understanding of quite how brilliant Aneurin Bevan’s brainchild is and a loosening of the purse-strings. It would be a dreadful shame if we go through all this only for nothing to change at the end of it.
That was the good news. Alas, the report from the Office for Budget Responsibility was enough to make one want to run and hide in a cupboard. The OBR points out that the economic impact will come less from people being ill or dying than from the social distancing and isolation measures making it impossible for anyone to inability to do anything or spend any money.
The upshot of it all is, the OBR suggests, “lower incomes, less spending and weaker asset prices, all of which reduce tax revenues, while job losses will raise public spending. The longer the period of economic disruption lasts, the more likely it is that the economy’s future potential output will be ‘scarred’, thanks to business failures, cancelled investments and the unemployed becoming disconnected from the labour market”.
The Chancellor, Rishi Sunak, on the other hand, is quoted in The Telegraph as saying that what the OBR is saying is “just one particular scenario” , based on the lockdown continuing for a further two months. I think it’s part of the Office’s remit to be the “doomsters and gloomsters” but I don’t think it’s all that helpful for figures like “10% unemployment rate” and “3.4million unemployed” to be blazoned across all the front pages.
Even when we do come out of this – and we will, this is not forever – it will take time for things to get back to normal. One of the first things you learn in Economics is that more businesses fail on the road out of a recession that during it. The OBR itself suggests that it will take three months to properly recover from a three-month lockdown. How many businesses will be able to get through not just lockdown but the aftermath?
Keep calm, wash your hands and stay at home where you can. It’s all we can do really.