UK must use new-found collective spirit to grow economy after pandemic – leader comment

Government’s furlough scheme to keep UK economy going amid the coronavirus pandemic is necessary but hugely expensive.

Chancellor Rishi Sunak announced companies had applied to furlough about a million people on the first day of the Government's new scheme (Picture: PA Video/PA Wire)

It is an extraordinary operation of breathtaking scale – millions of people are to be paid up to £2,500 a month by the Government to sit at home and do nothing.

The goal is to ensure that people have enough money to live on and a job to return to when the pandemic subsides and that companies can continue to survive even though their income has dried up. Chancellor Rishi Sunak said 140,000 firms had applied to furlough about a million people on the first day of the scheme alone.

Whether the Government has got the details exactly right is too early to say, but not taking action of this type is too dangerous to even contemplate. While some companies have gone under and others may follow, the UK cannot afford the mass collapse of large numbers of businesses. That would be a blow to Britain that would have devastating consequences which would potentially last for generations.

So instead – and this is not something the Scotsman would say lightly – it makes sense to spend a small fortune, racking up a considerable state debt, in order to spread this temporary economic pain over a longer period.

However, the Government must be vigilant to ensure any attempts at fraud are thwarted and any companies attempting to game the system are brought to book. We must remember that we are essentially spending our children and grandchildren’s money.

It is obvious this is a strategy which cannot continue indefinitely and we should work to make sure it is needed only for as short a period as possible. How long that turns out to be is partly in the hands of the virus. But testing people with symptoms and tracing those they have been in contact with, as we and leading experts have said before, is surely an important step to take.

As a nation, we also need to think about how to improve the UK’s economy after the crisis to help pay off our debts. Sunak showed he has been doing so by announcing two new Government funds, totalling £1.25 billion, designed to provide a source of funds for innovative businesses. But we also need to address the UK’s productivity problem. In the early 1950s, the UK had the highest productivity in Europe but we have since fallen far behind our rivals. Workers, executives and politicians need to work together to address this issue – and do so with the same collective spirit on display in the midst of this current crisis.

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