Lord Birt
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Budget: Economic and Fiscal Outlook
Lord Birt Excerpts(4 years, 6 months ago)
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Lord Birt (CB)
My Lords, a disastrously infectious and pernicious virus has rendered obsolete both March’s Budget and February’s OBR outlook. That is because, as we know, every month that the lockdown continues we are losing around one-third of our GDP—the wealth that together we create, which finances our individual life choices and funds the NHS and every other public service. Without wealth creation, we are destined for public and private impoverishment. Around one-third of our workforce is now furloughed and an estimated 60% of our households have no savings. We cannot borrow for ever—or even for long—to fund the current massive shortfall in government revenues.
We and other western countries were slow to respond to the virus. We need a surer touch in emerging from the lockdown. We must first reduce new cases to low numbers, as Germany and New Zealand have done, and then we need a capability at scale to test, trace and isolate. South Korea—a nation our size—is the exemplar here, experiencing only 250 deaths. All the while, we must maintain a standby capability for fear of a second wave.
In emerging from the lockdown, we must recognise that every business is singular: with a unique mix of suppliers from home and abroad, a unique mix of customers, and a unique offer of products and services. Every business has been affected differently by the lockdown, and every business will have to design its own unique route out, consistent always with a tireless concern for the safety of its staff and customers.
Even then, world markets will be uncertain. China is back at work, but its consumers are not yet spending. The US has 30 million new jobless. This will remain an unsettled world until science can come to our rescue with a treatment or a vaccine. I fear that we will certainly and quite soon need a fresh OBR outlook and a new Budget. But in the meantime, we must do everything we can to put business back on its feet again. Back to work we really must go.