Covid-19: Businesses and the Private Sector

Lord Razzall Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Razzall (LD)]

My Lords, I obviously agree with everything the noble Lord, Lord Dobbs, has said in praise of the private sector. It is now a statement of the obvious that the private sector has been debilitated by the Covid pandemic. Claims for unemployment rose by 69% between March and April, the largest month-on-month increase since records began. The private sector has borne the brunt of economic collapse. What does it face when we return to the so-called new normal?

The Chancellor warned us on Tuesday of a recession like no other that we have seen before. He also warned the House of Lords Economic Affairs Committee that it was not obvious that there would be an immediate economic bounce-back. In practical terms, this means that key sectors of our industry will have difficulty recovering. The hospitality and entertainment sectors represent a key part of our economy, but how will our restaurants, pubs, theatres and cinemas remain economically viable if they have to enforce social distancing? Good luck to the taskforce announced yesterday to tackle these issues.

In economic terms, the numbers will be dire. The Bank of England predicts 2 million job losses this year, taking unemployment dramatically higher, most of all from the private sector. This is on top of the 7.5 million people on the furlough scheme, many of whom may not keep their jobs when the scheme ends. Clearly, we cannot go back to the world before the virus, so surely this is an opportunity to restructure the way the private sector operates. It is obvious that many companies are overloaded with debt. Inevitably, some of the debt will have to be converted into shares. Is this not an opportunity for increasing worker participation and share ownership, a long-held aspiration of the Liberal Democrats?

Talking of the Liberal Democrats, noble Lords will expect me to touch on Brexit. Until we know how the UK can trade back to solvency outside the European Union, surely it is time to extend our transition period and trade talks until the economy has stabilised.