‘BRITAIN has thrown more money at the problem than any other developed economy – £370billion – that is getting on for 20 per cent of GDP, one fifth of annual GDP, and it frankly hasn’t worked.’
Last week when I interviewed economist Ewen Stewart, founding director of the city consultancy, Walbrook Economics, the signs of impending economic crisis were already evident in the haulier crisis, petrol queues, rising fuel and energy prices, incipient factory closures and labour supply shortages. These, Stewart explained, flow directly from lockdown (not from Brexit), from a misguided furlough scheme, and the inevitable bottlenecks when a locked down economy is finally opened up.
This week news of rapidly inflating prices as well as of ‘Plan B’ make Stewart’s warnings about the serious ‘error’ of Lockdown, along with the serious structural problems of a now State dominated economy and historically unprecedented money printing, ever more urgent. A good Chancellor, he says, would have looked (and still must) at the tried and tested methods that worked for West Germany after the Second World War, and indeed Britain and the US in the 1980s. Only by sensibly cutting taxes and reducing over-burdening ‘compliance’ regulation, will the economy start to grow again.
Sadly the economically illiterate and ‘statist’ Messrs Johnson and Sunak are set on the reverse of these policies. This does not bode well for Generation Covid, Stewart warns. Young people need to learn (fast) that the State is not the solution – it is the problem.
You can watch the interview here.