Sir John Redwood has written to his constituents about issues caused by the coronavirus pandemic.
He said that the government’s decision to close down “more than a third of the economy for an unspecified period” is a similar measure to those taken by Italy, Spain, France and Germany, but less severe than China.
He warned that this “will put many people out of work, bankrupt many businesses and create hardship for people who lose their income”, but was “pleased to report that the government has announced a scheme to enable companies to furlough their staff, keep them on the payroll when not working, with the government paying 80% of the cost for the period of shutdown up to an individual pay ceiling”.
He also welcomed support for banks and self-employed people, but added that “(I) do not think it goes far enough”.
“I am trying to persuade the government to underwrite more jobs and incomes, and to make the payments earlier. Only if we keep company workforces in being can we be ready for recovery as soon as the restrictions are lifted,” he said.
Sir John also wanted businesses to return to normal as soon as is practical, saying that “as more people get the mild version of the illness and gain some immunity, so it should become easier to relax the tough economic sanctions against normal business activity”.
He added: “I understand cautious advisers wanting to stamp out the disease want maximum isolation for the maximum number of people for as long as possible. They are worried that if we lift the bans early when numbers ill are falling there could be a second wave.
“The government, however, has to balance this risk against the undoubted substantial extra damage to jobs and incomes if we keep the closures in being for too long”.
And Sir John, who is 68, said that he had been working from home and was grateful to the work of “essential services”: “I would like to say a big thank you to all of you who are going to work to maintain our essential services, ensure there is food for our tables, and to care for others.”
Sir John’s letter in full
I am writing to update you on the virus crisis, and the damage to jobs, incomes and lifestyles that the virus response is causing.
The government has taken advice from epidemiologists, based on worldwide work through the World Health Organisation. This work concludes that because there is no current cure nor vaccine to prevent the spread of Covid 19, and because people with severe versions of the illness die, tough action has to be taken to slow or stop the spread of the disease. As it appears to be easily caught, this requires as much separation between people as possible.
The UK has adopted a range of measures similar to those in Italy, Spain, France and Germany who also have bad attacks. The measures are a bit less severe than those adopted in China, which claims to have tamed the virus, but is worried about a new upsurge in it as restrictions are relaxed. The UK policy is more severe than the Swedish approach. The USA seems to be moving to join us with more severe measures as it spreads rapidly there.
I have constantly pointed out to the government that closing down more than a third of the economy for an unspecified period will put many people out of work, bankrupt many businesses and create hardship for people who lose their income. I suggested a number of measures to offset some of this damage. I am pleased to report that the government has announced a scheme to enable companies to furlough their staff, keep them on the payroll when not working, with the government paying 80% of the cost for the period of shutdown up to an individual pay ceiling. It has announced a similar scheme for many self-employed people. It has also offered state guarantees for commercial banks to lend to keep companies with much-reduced turnover going through the difficult period.
I welcome this big response, but do not think it goes far enough. I am trying to persuade the government to underwrite more jobs and incomes, and to make the payments earlier. Only if we keep company workforces in being can we be ready for recovery as soon as the restrictions are lifted.
I am also about to tackle the government on the all-important timing of exit from these emergency measures. I understand cautious advisers wanting to stamp out the disease want maximum isolation for the maximum number of people for as long as possible. They are worried that if we lift the bans early when numbers ill are falling there could be a second wave. The government, however, has to balance this risk against the undoubted substantial extra damage to jobs and incomes if we keep the closures in being for too long.
As capacity builds in the NHS to handle high numbers with pneumonia-like symptoms, and as more people get the mild version of the illness and gain some immunity, so it should become easier to relax the tough economic sanctions against normal business activity.
I am also conscious of continuing shortfalls in online food delivery services, where I have proposed measures to harness volunteers and use delivery services from companies previously supplying non-essential items. There is plenty of food but still problems with switching items like eggs from large catering packs to retail packs, leading to some empty shelves. Again I have proposed some measures to deal with this backlog.
I hope you and yours are keeping well and are managing in these difficult circumstances. I would like to say a big thank you to all of you who are going to work to maintain our essential services, ensure there is food for our tables, and to care for others. I am working from my home in Wokingham Borough and doing as much as possible of my job on the phone and online.
Yours sincerely
John Redwood
