Coronavirus (Covid-19) has had major implications for the UK economy. There have been debates about a number of possible changes to economic policy when the UK enters the recovery phase. These include: possible major reforms to fiscal policy; whether the Government should facilitate the reallocation of jobs and capital away from the hardest hit sectors of the economy; what measures could be taken if the virus exacerbates inequalities in the UK; and whether the recovery is an opportunity to bring about fundamental changes in the economy and society.
Coronavirus and the Economy (258 KB , PDF)
On 4 June 2020, the House of Lords is due to debate a motion moved by Lord Eatwell (Labour) that “the virtual proceedings do consider (1) the economic lessons learned from the Covid-19 pandemic, and (2) the measures necessary to repair the United Kingdom economy”.
The Office for Budget Responsibility (OBR) and the Bank of England have analysed possible economic scenarios taking into account the impact of coronavirus (Covid-19). Both showed falls in the size of the economy. The Chancellor of the Exchequer, Rishi Sunak, has implemented a range of support measures and said that a key issue would be how much long-term productive capacity would be lost from the economy (“scarring”).
The Institute for Fiscal Studies (IFS) has argued that once the worst effects of the virus have passed, “tough decisions” will be needed on fiscal policy. The Institute for Government has called for longer-term reform of the UK tax system, while the Chancellor has stated that higher growth should be prioritised over the repayment of debt. Turning to monetary policy, some commentators have argued that the expansion of quantitative easing could compromise the Bank of England’s independence.
Other issues have been raised about the management of the economy as it recovers from the coronavirus. These include whether the Government should:
Some commentators have also discussed whether the virus will exacerbate inequalities in the UK and, if so, what measures could be taken. This includes possible major reforms of welfare systems. Others have debated whether the recovery is an opportunity to bring about fundamental changes in the economy and society; for example, to build a more environmentally friendly economy.
Coronavirus and the Economy (258 KB , PDF)
The collapse of major UK companies such as BHS and Carillion has raised questions about the effectiveness of the country’s auditing practices. The government has committed to reforming the auditing industry. The 2024 King’s Speech included plans to publish a draft bill comprising measures to establish a new audit, reporting and governance regulatory body with enhanced enforcement powers. The draft bill has not yet been published.
This briefing is the fifth of a series on the post-war history of the UK economy. The series proceeds decade-by-decade from the 1950s onwards, providing an overview of the key macroeconomic developments of each decade. This fifth briefing looks at the 1990s. In this decade the UK economy settled into a period of low inflation and steady growth; however, living standards growth was lower and more regionally concentrated than in previous decades.
This briefing looks at the Social Fund Winter Fuel Payment Regulations 2024. These regulations would introduce means testing for the winter fuel payment. They are the subject of a motion by Baroness Altmann (non-affiliated) to annul them. The House of Lords Secondary Legislation Scrutiny Committee has also drawn the regulations to the special attention of the House.
