COVID-19: The Economic Fallout

Anne Marie Waters 

April 28th 2020

 

The Government has promised £60,000 to the families of health workers whose relatives die from coronavirus.  The measure was announced by Health Secretary Matt Hancock on April 27th.  This will no doubt bring some relief to devastated families and very few people would object.

However, as it is one of many enormously generous promises made by the Government since the beginning of the coronavirus, it has perhaps become time for a tally-up.  Just how much money has the Government promised to date?

We cannot know how many payments of £60K will be paid out to families, but so far, there are more than 100 NHS staff members who have died in relation to coronavirus.  That’s already £6 million – a mere drop in the ocean.

Also made available from the Government is £2,500 per month (or 80% of salary) for employees unable to work.  Again, it is impossible to quantify how much this will be over all, but the UK has a working population of over 31 million people – 5 million of whom are self-employed.  Therefore, at a rough calculation, 26 million people at £2,500 per month over a 3 month period amounts to approximately £195 billion.

For self-employed people, Chancellor Rishi Sunak has announced a package of taxable grants that are based on the average trading profit of the claimant over the three tax years between 2016 and 2019.  Once again, it is impossible to measure how much this might amount to.

What else has the Government promised?

  • Cash grants to retailers worth £25,000
  • No business rates for the retail, hospitality, and leisure sectors for one year
  • Grants worth £10,000 for small business
  • State backed loans to the value of £330 billion
  • Tax breaks worth £20 billion

No doubt some of this overlaps, but in attempting to find a clear overall figure, it’s not possible to do so. What we do know is that hundreds of billions of pounds have been made available, taxes have been cut, and our economy is in shut-down.  In short, our coffers are being plundered while there is little-to-nothing coming in.

What we also know is that our country is already in levels of debt never known before (as are most countries).  The UK’s debt is currently at a frightening level of 85% of GDP.  That means that the UK owes 85% of all of the goods and services it produces and provides each year.  We owe 85% of our income.  After coronavirus, we are likely to owe more than 100% – some have even suggested that debt could reach 150% of GDP.

So what happens then?  What happens when we owe more than we earn?  The truth is it’s a completely absurd situation and these debts simply cannot be paid.

We are living in a debt-laden world and it affects our production, our income, and our prospects in devastating ways.  It is now set to grow and grow as a result of coronavirus and we can’t pay it.  So we will leave it to the next generation, who will probably borrow to pay it and the circle will continue round and round.

The bubble must burst, and it will, so the UK must make change and increase our self-sufficiency, but the world must look now at this bubble of debt and the global suffering it causes.  Third world countries for example are in enormous debt to the IMF and World Bank; so much so that paying debt dominates the economic policy of countries with starving populations.

We must make change and we must do it quickly. Future generations will find their lives blighted by endless debt, we must therefore seize the coronavirus crisis as our opportunity to steer the future in a different direction.

 

Anne Marie Waters 

Leader 

For Britain 

www.forbritain.uk 

You can read Anne Marie’s previous blog on the economic impact of coronavirus here