The economy might need an omicron bailout – but it must be more targeted

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Next, fewer soft loans. The Treasury doled out billions in bounceback loans, and even more in rates rebates, and even invested in start-ups directly through the Future Fund. Some of it may have done some good, and kept decent businesses afloat through the crisis. And yet we still have no idea whether the loans will be repaid, or how much it will all finally cost.

In reality, one thing we learnt during the pandemic was that the best companies adapt remarkably quickly. Lots reinvented themselves in the blink of an eye, with staff working from their kitchen table serving customers staying at home.

Too often the soft loans kept alive zombie businesses that were on the way out anyway. If a few go bust, it is of course terrible for the owners and the staff, but it is hardly the end of the world, and it will be healthier for the economy overall.

Thirdly, we need to keep the government machine working. While businesses adapted to the pandemic, and the health service responded well, a lot of the rest of the public sector put its feet up, and took a few months off.

We can’t afford to build up vast backlogs of HGV licences, planning applications, tax returns, routine medical care, or education. It just creates terrible shortages for the economy when it does reopen.

Finally, we need to root out fraud. Some horror stories are starting to emerge about abuse of the Chancellor’s generosity.

HMRC reported in September, for example, that £3.5bn was paid out either incorrectly, or fraudulently, in the furlough scheme. Fraud on the Bounceback Loan Scheme is estimated by the public accounts committee at between £16bn and £23bn.

It was shockingly easy to borrow lots of money from the Treasury on easy terms and then disappear without a trace. In a crisis, perhaps that was understandable. There wasn’t time for all the due diligence that might have been required to prevent it. But we can’t let that carry on. It costs too much and it rewards crooks.

We all hope the latest variant is just a blip. Viruses mutate all the time, and typically they become less deadly, not more so. And yet, time after time Covid-19 has proved to be worse than we expected. If there is another serious wave, we should prepare for the consequences.

We got some things right early in 2020. And yet, we got plenty wrong as well, and if the Treasury is back in emergency mode then we need to learn from that – because there is absolutely no point in repeating the same old mistakes.

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