In terms of supporting people through the crisis, I absolutely agree that the sectors in which people have low wages will need the most help. My point is that, if we are looking at matters from an economic point of view and in terms of overall growth, we could prioritise opening up the sectors with high multipliers. However, in any economic crisis, it is always the people in areas with lower wages and lower productivity who suffer the most. A number of our articles have focused on the people in particular sectors who are being affected, such as people who are on lower wages and people in sectors that are dominated by women and young people. It is those people who will suffer the most through the crisis.
The UK measures to lift lockdown ask people, for instance, to use the car, to walk or to cycle, or to come back to work if they can, but what about lone parents and people who do not have a car? Again, it is poorer people and women who will be impacted the most. Therefore, we need to seek to protect those people as we consider the economic recovery that we want to have.
I go back to what you said initially. To defend the OBR and the Bank of England a little bit, they are setting out a scenario but they are not saying that it will happen. If there is to be a shutdown for three months and then a bounce back, they are saying what the impact over the year will be. I agree that it is inevitable that people will say that that is what the OBR thinks will happen, whereas I do not think that anybody thinks that that will happen now. There will be long-term impacts on the economy; we will not bounce back. The social distancing measures that we need to have in place for goodness knows how long will act as a significant depression on the economy. Lots of people have lost their jobs and are now on universal credit, and lots of people have had a significant cut in their income. Therefore, there will be a wider impact on our economy that persists throughout the next couple of years at least.
With regard to the whole new package of stimulus measures and the political debate in the UK, one of the interesting things that has come out of the situation, in terms of wider public attitudes, has been the intervention in the private sector, which is fairly unprecedented. That might mean that there is more appetite in future crises for Government intervention in the economy. It might mean that, coming out of the crisis, certain things that were considered to be unthinkable prior to it, such as state ownership, may be more likely, particularly on the transport side.
From the poverty point of view, people are now saying that the amount of income that is given through universal credit, for example, is ridiculously low and they are asking how people could possibly live on that. A lot of people are already expected to live on that level of income, and that was seen as being all right before the crisis.
Those are some of the interesting things that have come out of this. Whether they will persist into the political debate about the “new normal” depends on your world view. We spoke to different people and, quite often, their ideas are driven by what they want to happen rather than what might actually happen. However, those have been interesting features of the debate, which may persist into the new package of stimulus measures.
The chancellor has already indicated that he is prepared to look at the current situation, whereby the employed pay the most tax and the self-employed do not pay so much tax, as part of looking at the overall tax system in the UK. That is a minor example of how things may change.
I think that there will have to be a whole new package of stimulus measures from the UK Government. How much flexibility that will give Scotland is an interesting question. It depends on the areas in which the UK Government introduces stimulus measures. For example, there have been calls for job guarantee schemes in order to support economic recovery. Again, that would be quite a significant intervention in the economy, although it is not unprecedented. There was something similar after the financial crisis. Whether such a measure will be in the area of devolved policy and will give flexibility to the Scottish Government or whether it will be a UK measure is a grey area in the space of employability policy, social security and so on. It depends on the areas in which the UK Government chooses to set out its stimulus plans.