My Lords, I am not sure that the public are prepared for what we are about to face. Today’s headlines are about deaths and infections. In five months’ time they will all be about soaring unemployment, a shrunken economy and sky-scraping debt. This is not a typical recession caused by overheating, a rise in interest rates or the economic cycle. It is caused by the correct response of the Government to a pandemic which has led them to an administered freezing-down of parts of the economy. However, you cannot just put firms, which have overheads and costs, into deep freeze and expect them to emerge healthily later. When the restrictions are lifted, some companies will have been bankrupted, others will have become more indebted, and there will be less confidence and consumer spending.
I accept that deficits and a higher debt-to-GDP ratio will have to be accommodated for a period. We are fortunate that interest rates are low and in some cases negative, but this is not without risks. There could be a rise in real interest or a period of deflation, making debt more expensive. When politicians plead to support the economy, too often they mean only spending money. Spending money will happen, but it is not the only solution. Imposing restrictions has caused part of the economic challenge we face. Lifting those restrictions ought to be part of the solution as well.
To my mind, the single most important measure could be to take the two-metre rule down to 1.5 metres and look to abolish it in the longer term. I do not suggest going against the scientific advice, but the scientists should explain to us why we are different from other countries. The hospitality industry employs 3.2 million people. If we could get only some relief for it, that would save many jobs from going under. This is one simple thing that could be done to help the situation improve before it gets worse. It is an agonisingly difficult situation, but the sooner it is faced up to, the better.