Scars of Covid will 'last for a very long time', former Chancellor Ken Clarke tells LBC

7 February 2021, 11:49

Lord Clarke predicts massive economic bounce back after lockdown

By Joe Cook

Former Chancellor Ken Clarke has told LBC’s Swarbrick on Sunday he expects the economic scarring caused by Covid will “last for a very long time”.

Lord Clarke, who was chancellor from 1993 to 1997, said he believes “it will take a long time to get everything back on its feet again”, warning that the huge amounts of public debt would need to be paid off.

The intervention comes after the governor of the Bank of England said this week that they believe the Covid vaccine would help the economy make a rapid recovery in 2021.

Governor Andrew Bailey said their economists believe GDP will “recover strongly from the second quarter of 2021, towards pre-Covid levels”.

However, Mr Clarke told LBC’s Tom Swarbrick that while he “very much hopes” the governor’s projection is correct, “with great respect to the governor of the Bank of England - I don’t think he has got much more idea than me”.

Read more: Bank of England tells banks to start preparing for negative interest rates

Read more: Jackie Weaver: Sexism at heart of Handforth Parish Council row

Business rate holiday will stop businesses going off 'a cliff edge'

The Conservative peer continued: “I don’t think anybody knows, because this is a quite unprecedented situation and there are very unprecedented features about the economic situation it has created.

“We will have a strong bounce back and some of the worst hit areas like restaurants and bars will find everyone is flocking into them, when we get rid of lockdown, and there will be a considerable recovery.

“But no, I think it will take a long time to get everything back on its feet again and there are all kinds of risks.”

Read more: Surge testing deployed in several areas after South African Covid variant detected

Read more: Storm Darcy: Parts of England wake up to snow as bitter winds grip the nation

Tight lockdown measures until at least May, SAGE member warns

Mr Clarke is calling for the government to take a proactive approach to tackling the high levels of public debt that have built up during the pandemic - including raising taxes.

“We are going to have to raise to pay for the colossal amount of public expenditure we have endeared and the colossal amount of debt, which the economy can’t just carry into the future,” he told LBC

Pressed by Tom on the Conservative’s election promise not to raise income tax, the former chancellor said: “I personally think it was a mistake to rule out the taxes which raise most of the government revenue and which are the fairest way of raising revenue.”

Read more: Party-goers fined £11k after celebrating one-year-old's birthday in a small flat

Read more: Chancellor offers businesses more time to make first Covid loans repayment

“99 percent were quite unaware that it was in this document - the Conservative manifesto - which is never distributed to the public on any wide scale,” he added.

“It is just silly to say the election manifesto stops you doing that. I would go to income tax, I would go to VAT myself, if I was still chancellor and say: ‘we did have that in the document, but everybody realises we wouldn’t have said that if we had the faintest idea what was going to hit us within a year or two of the election’.”

However, Mr Clarke said he would be “cautious” about raising business taxes at a point “when you are trying to get the economy to recover”.

More Latest News

See more More Latest News

More than 2 million drivers are set to hit the road on Good Friday.

Easter Carmageddon: Over two million drivers to hit the road on Good Friday after Storm Nelson travel chaos

Michael Gove has slammed the water firm as a 'disgrace'.

Thames Water bosses branded a ‘disgrace’ as Michael Gove tells firm ‘not to punish consumers’ for its failings

South Africa Bus Crash

Girl, 8, the sole survivor as 45 die in bus crash off South Africa bridge

A spokesman has denied reports the sausage dog could be banned.

The wurst news is over: Germany denies claims of sausage dog ban

Israel Palestinians Britain Aid

UN top court orders Israel to open more land crossings into Gaza

Greece Confidence Vote

Greece’s government survives no-confidence motion called over rail disaster

A council has had to apologise following the incident.

Fury as parents offered version of school class photo without complex needs pupils

Conjoined twin who shot to fame with sister on The Oprah Winfrey Show marries army veteran in private ceremony

Conjoined twin who shot to fame with sister on The Oprah Winfrey Show marries army veteran in private ceremony

Israel Palestinians UN Security Council

Russia ‘abolishes’ monitoring of sanctions on North Korea with UN veto

Firefighters at the scene of a bus crash in Limpopo

Bus plunges from bridge in South Africa and erupts into flames, killing at least 45 and leaving child, 8, as lone survivor

Music-Green Day UN

Green Day to headline UN-backed global climate concert

Exclusive
Starmer has vowed to resurrect Boris Johnson's 'Levelling Up' policy

Failure to ‘level up’ Britain would be ‘catastrophic’, Wes Streeting admits, as Starmer vows to resurrect Johnson policy

Border Force staff will walk out from April 11

Hundreds of Border Force officers at Heathrow Airport to stage four-day strike

Stephen Bear was ordered to pay Ms Harrison £5,000.

Disgraced reality TV star Stephen Bear ordered to pay £27,000 over revenge porn conviction or face nine months in jail

Sam Bankman-Fried

FTX founder Bankman-Fried sentenced to 25 years in prison for crypto fraud

Exclusive
Covid no excuse for death of Finley Boden who was murdered by drug-addled parents, child protection chief says

Covid no excuse for death of Finley Boden who was murdered by drug-addled parents, child protection chief says