I draw the attention of your Lordships to my entries in the register of interests. I am from the Zhou Enlai school of analysis in thinking that it is too early to make a considered judgment of the economic lessons to be learned from the Covid-19 pandemic. However, it is not too early to suggest a few likely strands.
First, multilateralism is better than going it alone, and the Government have shown in their approach to vaccine and drug development that they are capable of acting multilaterally. That lesson should guide our economic strategy too. Secondly, “Keynes rules OK”, as a 1970s graffiti artist might have written—perhaps it was the noble Lord, Lord Russell. The Chancellor’s constructive response to the crisis demonstrates how misguided the previous coalition and Conservative Governments were in pursuing the policy of wholesale public expenditure cuts—another lesson that must not be ignored in the years to come, or the recovery will be elusive.
Thirdly, just-in-time supply chain and inventory management is totally unsuitable for the NHS, whether or not it is an acceptable risk for commercial manufacturing. The economy needs greater redundancy in the engineering sense in order to lessen redundancies in the employment sense.
Finally, the catastrophe in the social care system and the broader exacerbation of inequality resulting from the pandemic point to the urgent need to improve the position of those on lower incomes. Wages and salaries have fallen from 70% of GDP in the 1970s to under 60% now. In an era of unprecedentedly low, risk-free interest rates, the providers of capital can afford to see a rebalancing of the returns, to be divided between themselves and the providers of labour. Employers, trade unions and government, through regulation, all have a role to play in achieving this.