FORMER chancellor Norman Lamont has said the public don’t fully realise the “horrible” economic damage “coming around the corner.”
Speaking on Higginson Strategy’s Behind the Story podcast, Lord Lamont said the government’s furlough scheme has lulled people into a “false sense of security”.
The story was reported by The Financial Times, Telegraph, The Sun, Daily Mirror, City AM, Politics Home and Daily Express.
Lamont said that many people who feel relatively secure on the furlough scheme do not realise, “that their jobs have disappeared or are about to disappear, or that their firm is in serious trouble. “
Lamont added that he expects some sectors to disappear entirely. He said: “Some sectors will bounce back but not necessarily back to where they were before. But some sectors will disappear. If you think of part of the services sector, hospitality, tourism, restaurants, hotels, airline travel – I think they’re going to be very badly hit for a long time.”
Lamont, the Chancellor under John Major between 1990 and 1993, said the government should borrow and ignore the debt in order to fuel the recovery.
He said: “I think as we recover, the government should be very careful to nurture that gradual improvement in the situation and shouldn’t do anything in terms of reducing the debt that would hold back the recovery.”
He went on to say: “Anything the government have in mind if they think the level of indebtedness is too high, I think should be deferred for later, and you’ve got to let borrowing and indebtedness take the strain.”
Lamont was joined on the episode by Former Leader of the Liberal Democrats Sir Vince Cable and former No11 and No10 aide to Gordan Brown, Lord Stewart Wood.
Commenting on the Government’s response, Sir Vince said: “I think we’ve been near the top of the class on the economic response and near the bottom of the class in terms of the overall strategy.”
Lord Wood, who was working in 10 Downing Street as an advisor to then Prime Minister Gordon Brown during the 2008 Financial Crash told host Clodagh Higginson: “I see the recovery as like a Nike tick shape – a deep plunge and a very gradual stuttering uptick over a long period of time.”
The episode of Behind the Story is available on Apple Podcasts, Spotify and SoundCloud.