Economic recovery post-Covid19

4th May 2020

 

One of the problems with Twitter is it acts like an echo-chamber. You tend to follow those whose views you support and vice versa. So when something happens, however important, your timeline fills up all voicing the same opinion. It can be intoxicating and from what I’m told, being intoxicated sometimes leads to a headache afterwards.

The headache for the Government is what will our economy be like post-Covid19? How much will it have shrunk? Will it be a short-term hit? Who and how do they pay for the fiscal measures they introduced?

At this time, all sorts of vested interests pop up, calling for “their” type of economic recovery. Faced with the potential financial hit of £800 billion (estimated in the Sunday papers) frankly, the government will opt for whatever recovery they can grab – green, red or blue.

That’s why the well-meaning calls on Twitter for a ‘Green Recovery’ may attract support from NetZero advocates like me, but the actual definition of that Green Recovery may be a little vague if you inhabit HM Treasury. So a boiler scrappage scheme, removing those remaining Zombie boilers, would have an appeal (quick payback, easy to implement, uses matched private funding, delivered locally across the whole UK, brings in tax revenue from VAT, lower energy bills create substitutional spending elsewhere, helps the least well-off, keeps manufacturing jobs across the UK) if not as green as some would like.

That’s why it was used before, after the financial crisis.

It will be short-term wins that the Treasury need. National infrastructure plans, requiring considerable planning before delivery, whilst worthy may not be immediate enough.

So what scope is there for such a scheme? Well, we estimate there are around 2 million Zombies still out there – keeping people warm, but at a price to their pocket and the environment.  Even halving the number would make a real difference. And now is the exact time to do it – as we move towards the summer, household disruption is minimised.

We are all in this together, using tried and trusted schemes are just what the doctor ordered to help with our economic recovery.

Best wishes

Mike Foster, CEO