Former chancellor Sajid Javid has said the UK economy’s recovery from coronavirus can be “V-shaped” if the government follows “free market” policies once the worst of the virus has passed.
Javid – who was chancellor for seven months until February – today welcomed his successor Rishi Sunak’s unprecedented interventions into the economy.
Sunak has unveiled £330bn of lending to support the economy and pledged that the government will pay 80 per cent of the wages of those who would otherwise be laid off, among various other measures.
Yet Javid argued in an article for the Times today that the UK should not abandon its “free-enterprise, free-trade economic model” after the virus. He said a “free enterprise economy is the only way of creating jobs and wealth”.
Javid’s intervention comes as the right and left of British politics prepare for the end of the crisis and to debate how best to build an economic recovery.
Those on the left have argued that 10 years of austerity have made the country ill-prepared for the coronavirus outbreak.
They say the government has been forced to bolster one of the weakest welfare safety nets in the OECD and pump money into an underfunded NHS as coronavirus shines a light on the gaps in the UK’s social contract.
Yet Javid today argued that although there are lessons to learn, Britain must re-embrace free-market economics if it is to recover from the coronavirus slump.
“Interventions that are helpful in a crisis can quickly become the best way of ensuring that we never recover,” he said.
“A free enterprise economy is the only way of creating jobs and wealth, and properly funding the public services we all rely on,” he wrote.
Javid advocated “low taxes”, raising the prospect that the government’s ballooning debt would be paid down through more spending cuts once the economy starts recovering.
The former chancellor said he is working with the Centre for Policy Studies think tank on the details of his ideas about using free enterprise to boost growth after coronavirus.