In June, the Tulse Hill Hill Branch of the Labour Party invited Grace Blakely, a former Tulse Hill resident and economist/journalist, to speak to local Labour Party members about the impact of coronavirus on the economy. The Secretary of the Branch, Chris Blake, asked us to share his article covering the discussion:
“Grace opened by outlining the huge impact coronavirus will have on the economy. For many people this is the experience of being furloughed or their business losing income – but being furloughed could be followed by redundancy and economic problems will continue to spread. Unemployment is likely to end up being very high for some time. The last time we saw a long period of such high unemployment was in the 1980’s and we must prepare for the fact that for many more people will be affected that have so far. Rising unemployment gives people less money to spend and could lead to a spiral of economic decline. Local Labour Party member Dalvir added that Universal Credit and the local housing allowance may have both gone up – but the benefit cap has not and people will continue to struggle even if they need to rely on the benefits system.
Many businesses already had high levels of debt before the coronavirus pandemic. Grace explained how the Government has been giving loans to businesses who had stopped trading during the pandemic – but that it was not clear how they would pay back loans that may be as high as 40% of their annual income. Some businesses that struggle may be bought by larger companies, but it is unlikely the Government will step in and nationalise or help financially support business that are still struggling to recover. Chris raised the example of the situation in the aviation industry as a way to see how the Government was not interested in using the recovery to support wider change – with airlines demanding bailouts but not to support them to become more environmentally friendly.
Janet Williamson, Tulse Hill Labour Party Branch Chair, asked whether there was anything to learn from the way people came together after other moments of national crisis – such as after the Second World War. Grace explained that coronavirus meant nobody could continue to say “politics doesn’t affect me” as they will have experienced the negative impact on jobs and families that has come about because of political decisions, especially for those who have lost loved ones during the pandemic. What the outcome of the recovery looks like will be directly determined by what we do collectively.
Another local Labour Party member, Joe, asked about the risks to public services during the recovery. Grace explained that the Government probably cannot continue with austerity as it has since 2010 because there is nothing easy left for them to cut. “The recovery has to be just, sustainable and built on green gowth”, Grace replied, “There is everything to fight for.” Grace went on to explain how if Government is going to fund large sections of the economy, it should be used for public good. It is, however, going to be extremely uncertain and nobody can predict what is going to happen in the global or local economy over the next few years.
As the discussion came to an end, Cllr Mary Atkins outlined how coronavirus has cost Lambeth Council £60million from both lost income and the extra costs of things like adult social care – but letting the Council go bankrupt is not an option as it often means services being run by outsourced companies instead of the Council. Grace explained how the Government could cancel the debts of all the councils like it did with NHS trusts – but it does not look like they will be willing to do this for political reasons.”