John McDonnell MP, Labour’s Shadow Chancellor, has set out a five-point plan to deal with the potential economic impact of a coronavirus outbreak.
The plan includes specific action points for the new Chancellor Rishi Sunak, including: working with business groups and trade unions to assess impact and needs; planning requirements for resources across government departments; making strategic interventions in the economy; ensuring protection for workers, such as sick pay; and working with international bodies and ministers of finance.
John McDonnell MP said:
“The new Chancellor is missing in action at a time of great uncertainty.
“We need an action plan to manage possible economic consequences, and that plan has to be implemented rapidly.
“I’ve therefore set out a series of recommendations for action today to ensure we are ready for a range of possible economic outcomes in the coming days and weeks.”
Notes to editors
An Action Plan on Coronavirus: Recommendations for a Series of Actions that Should be Taken by the Chancellor
- Coordinating Assessments of Potential Impacts
- The Chancellor should urgently convene a meeting of major national business organisations and trade union representatives to review demand and supply shocks so far and likely further impacts
- The Chancellor should commission immediate briefings on potential economic impacts, working in concert with the Bank of England and the Office for Budget Responsibility – in particular focusing on consequences for production, consumption, and GDP, and reviewing stress testing data to consider the resilience of the financial system
- Departmental Assessments and Resource Planning
- The Chancellor should convene officials in relevantly affected departments (especially the Department of Health and Social Care, BEIS, and the Home Office) to review department-specific impacts
- Working with these officials, the Chancellor ought to prepare a funding plan for increased resourcing for agencies and departments, using a variety of scenarios taking into account different possible levels of severity of outbreak
- Strategic Interventions in the Economy
- The Chancellor should reassure the public and markets that the Government stands ready to intervene, acknowledging the limited effectiveness of monetary policy and highlighting the possible need for further fiscal measures (including fiscal stimulus) to overcome liquidity challenges and assist in tackling short-term demand and supply problems
- The Chancellor should work with officials to prepare support plans for vulnerable groups likely to be particularly affected by any outbreak, including families of individuals who have contracted the virus, and households where self-isolation and sick leave are required
- Workforce Protections and Support
- In conjunction with the BEIS Secretary and Department, the Chancellor should draft and introduce legislation providing protections for workers, including paid sick leave guarantees for all workers from day one and sick pay for self-isolation
- The Chancellor should consult regularly with trade unions to receive up-to-date information on further measures that might be necessary
- International Coordination
- The Chancellor must set up regular meetings with the WHO, OECD, and other expert institutions to receive briefings on international impacts
- The Chancellor should set up regular channels of communication with other relevantly situated ministers of finance to ensure coordinated international action, under the auspices of major international institutions and bodies – including a group under United Nations oversight to coordinate the global economic response to coronavirus