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Coronavirus: Philip Hammond says UK should start ‘reopening the economy’ as calls for lockdown exit plan mount

Coronavirus: Philip Hammond says UK should start ‘reopening the economy’ as calls for lockdown exit plan mount

The ex-Cabinet minister’s intervention comes amid mounting pressure from Tory backbenchers.

3 min read

Britain must start “reopening the economy” to avoid sustained damage from the coronavirus shutdown, former Chancellor Philip Hammond has warned.

The ex-Cabinet minister said the country would need to focus on “coexisting with this virus rather than conquering it”, as the Government grapples with how long to continue the strict curbs on daily life.

And he echoed Labour Party calls for ministers to set out its strategy for when curbs on movement may be lifted.

On Monday, Downing Street warned that easing the lockdown too soon could see the virus "begin to spread exponentially again".

But the Office for Budget Responsibility has warned that the UK economy is already set for a record contraction and a two-million-strong spike in unemployment between April and June on current plans.

"We need that route map" - former Chancellor Philip Hammond

Speaking at a virtual event organised by the Chatham House think tank, Mr Hammond said: “We’ve got to start reopening the economy and I think the sensible compromise is to reopen it around a set of conditions which assume that, for the time being, we are coexisting with this virus rather than conquering it.”

The former Chancellor warned that Britain’s economy would already be “different” after the criris, with international trade “hugely challenged” by the impact of the virus.

And he urged ministers to give businesses a clear indication of how various lockdown measures might be eased.

“We don’t know whether there’s going to be a vaccine or a cure,” he said. “We don’t know whether we’re going to have to reopen with the virus still in place.

“But how we manage that gradual reopening and how prepared business is for it will determine how quickly we can respond. So we need that route map.”

He added: “This is a £2 trillion economy. You can’t spin it up overnight from nothing.”

Mr Hammond meanwhile warned that the public’s focus would shift towards the economic toll of the crisis once the immediate health impact had been brought under control.

And he said people would then “expect their governments to be ready to respond to that phase of the crisis as effectively as they responded to the acute health phase of the crisis”.

The former Chancellor - who pressed for a close post-Brexit relationship with the EU when he was in the Cabinet - also said it would be “unwise” for the Government to continue to push for divergnce from the bloc this year.

Number 10 has been adamant that the existing Brexit transition period, which sees Britain maintain a close trading relationship with the EU until the end of 2020, will not be extended.

But Mr Hammond said a “second potential shock” within the space of a year could leave Britain an “uncompetitive advantage” as he called on the two sides to strike an “interim trade arrangement” while the crisis continues.

The intervention from the Conservative former Cabinet minister comes amid mounting pressure from some Tory backbenchers to get the economy moving again.

Ex-Environment Secretary Theresa Villiers told The Times that the economic damage of the lockdown could be “catastrophic”.

“It's so vital that we do find a way to let the economy start to come out of what is effectively a medically induced coma - the longer we leave it, there are simply going to be thousands of businesses that won’t survive,” she said.

But The Sun reports that the UK is likely to face a “very long path” out of the restrictive measures, amid concern that while the virus is spreading slower in the wider community, it continues to trasmit rapidly in care homes and hospitals.

One senior figure told the paper: “We will try a bit at a time, and then pause, so we can see what effect that has on the transmission rate. The pace will be very gradual.”

 

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