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

Israeli occupation of Palestinian territories is unlawful, the International Court of Justice has ruled

Top UN court rules Israeli occupation of Palestinian territories 'unlawful', as Netanyahu slams 'false decision'

Over 4,000 flights have been delayed or cancelled today.

Has your flight been affected by the global IT outage? Can you claim compensation?

Friday was the hottest day of the year so far - but the mini heatwave will end soon

Exact date mini-heatwave to end, as Friday becomes hottest day of the year so far with temperature close to 32C

Ben Ross has been missing since July 10

Mum of missing Brit Ben Ross to fly to Majorca for desperate search as police issue statement

Shaikha Makhra announced her split on Instagram

Dubai princess announces divorce from husband via Instagram 'as he is occupied with other companions'

Thousands of flights where cancelled across the globe on Friday.

Worldwide IT outage could last 'days' as flights grounded, shops closed and operations cancelled

The Kering Foundation Hosts First-Ever Caring For Women Dinner

Emma Watson ‘stalker’ arrested after demanding to see Harry Potter star at Oxford fashion show

Passengers are facing delays across the country

Is your flight delayed? Airports and airlines issue updates after mass IT outage causes travel chaos around the world

Evan Gershkovich, a Wall Street Journal reporter, was detained last March on spying charges

American journalist jailed for 16 years in Russia after being convicted of espionage

People have been out enjoying the sunshine ahead of the weekend.

Hot hot hot! Temperatures soar to 31C today and 30C tomorrow after an uncomfortable tropical night tonight

Harehill descended into chaos yesterday evening

Starmer condemns ‘shocking and disgraceful’ disorder after riot sweeps through Leeds

Joe Biden and Barack Obama worked in office together between 2008 and 2016

Biden planning ‘major announcement’ about his future as Obama says he must ‘seriously consider stepping down’

Zara McDermott opened up about the "extremely distressing" events that occurred behind the scenes at Strictly Come Dancing.

Zara McDermott hits back after ex-Strictly pro Graziano Di Prima claims he only kicked her once

Lee Laudat-Scott is charged with touching a boy under 13.

Former Labour councillor Lee Laudat-Scott charged with sexual assault of a child

Graham Gomm

Urgent manhunt as prisoner escapes custody at HMP Wormwood Scrubs during trip to hospital

Dominic Reid and Prince Harry

Prince Harry's charity boss quits as head of Invictus Games days after duke sees backlash over veterans' award