There is no reason the UK cannot be one of the first to recover from coronavirus recession – The Property Chronicle
Select your region of interest:

Real estate, alternative real assets and other diversions

There is no reason the UK cannot be one of the first to recover from coronavirus recession

The Analyst

As I write on the 31st March, the reported number of global active cases of Covid-19 is around 786,000 with 37,500 dead. The number of dead is rising fast but still only equates to 0.0625 per cent of the 60 million deaths each year worldwide. The threat which has governments across the globe in panic is the rate at which they fear serious infections from the virus is spreading, and the likely inability of our health infrastructure to deal with this. 

Published statistics are woefully inadequate. Only with empirical data can governments estimate the likely number of interventions needed by our health services, including hospitalisation and ICU care. Testing is also vital to measure the number in the population that have had the virus and recovered – such a test does not yet exist but is close to being created.

Without wide-scale testing, the extent to which the virus remains a threat can never be known. Governments across the globe are therefore formulating policy responses to Covid-19 based on woefully inadequate information. 

A government’s primary duty is to keep its citizens safe and, in that pursuit and absent proper data, the general policy response has been to entirely shut down economies in a bid to create effective social distancing. Most of the developed world is now entering a deep economic recession that will leave many millions destitute, businesses insolvent and incapable of being resuscitated, with debt levels substantially higher. The economic crisis now being deliberately created will dwarf the global financial crisis of 2008. There will also undoubtedly be a large human cost to bear of this recession.

To be fair to our government, it has introduced the mother of all stimulus packages to try to keep the ship afloat but the economic shut down cannot go on for long without the recession turning into a depression. Even with higher taxes in the short term the legacy in debt will burden generations to come and it will be the poor and middle classes that shoulder it.

Without a reprieve soon, the Prime Minister, no matter how good his intentions, will not be able to even begin to level up the country as he promised he would. The opposite will likely happen with social and economic divides getting worse.

An effective Covid-19 vaccine is 12 to 18 months away. This is too long a period for the government to keep the economy in deep freeze and sustain its stimulus measures. We are, in fact, in a race against time for the survival of the UK’s economy.  

In order to prevail in this race the government must rapidly scale up its testing; and once a test is available to determine whether or not a person has already had the virus that information must be gathered as well. If it transpires that large swathes of people have had or have the virus without serious symptoms, as is suspected, and that people with pre-existing conditions and the elderly are the most at risk, the government can formulate a sustainable long-term policy response to that without the need for the self-harm being inflicted by the economic shutdown. 

At the same time, the NHS must be armed with what it needs to fight the virus. Simply put, amongst other things, it needs personal protective equipment, more beds, more ventilators and more human resources. The government is doing well in this respect with numbers for all of these rising fast; it must continue at full tilt in this endeavour. 

Once the virus is properly understood, medical defences to it have been built and an empirically based long term policy response established, the government will be able to reopen the economy with confidence.

There is now no avoiding a serious recession but by moving fast it should be possible to foreshorten the recession, avoid the government going into massive unsustainable debt with its stimulus package, save businesses, save jobs and get the UK moving forward again. 

The Analyst

About Ben Habib

Ben Habib

Ben founded and is CEO of First Property Group plc, an award winning commercial property fund manager which specialises in and has an excellent track record in producing high investment returns. It is listed on the AIM segment of the London Stock Exchange and operates in the UK, Poland and Romania. In May 2019 Ben was elected to be a Member of the European Parliament (MEP) for the Brexit Party, representing London.

Articles by Ben Habib

Subscribe to our print magazine now!