London Daily

Focus on the big picture.
Tuesday, Jul 29, 2025

Coronavirus: Public need 'home truths' on economy

Coronavirus: Public need 'home truths' on economy

Former Chancellor Lord Hammond has said the government must risk unpopularity and tell "some difficult home truths" about the state of the economy.

He told the BBC that dealing with the pandemic had been the financial equivalent of "fighting a war".

But giving money away was easier than collecting it for "a populist government", he added.

A No 10 spokeswoman said she "doesn't recognise" his characterisation of a government reluctant to be unpopular.

She added that the pandemic had shown Boris Johnson was "a prime minister that is prepared to take difficult decisions and is weighing up very hard choices at the moment".

The Budget on Wednesday comes amid rising unemployment and follows the biggest UK annual economic shrinkage on record.

In an interview with BBC political editor Laura Kuenssberg, Lord Hammond - who resigned as chancellor when Boris Johnson became prime minister in 2019 - said the economy had taken a "huge hit" from Covid-19, but should "bounce back".

There had been "long-term scarring", with sectors like aviation and hospitality suffering "permanent damage", and transport and retail "changed forever", he added.

Official figures show the UK economy contracted by 9.9% in 2020 - more than twice as much as in any previous year on record.

On Tuesday, it was revealed unemployment had risen to 5.1% in the three months to December - the worst rate since 2015.

And the national debt - worsened by furlough, other pandemic help schemes and falling tax takes - stands at more than £2 trillion.

Lord Hammond said it was unlikely in the "foreseeable future" that ministers would be able to "do anything that will actually see the debt starting to fall".

"But what matters is not the absolute size of the debt, but the size of the debt relative to our economy," he said.

"If we can grow the British economy over the coming years, then just as we did after the Second World War, we can make the debt fade in significance, because, although it stays the same in absolute terms, it becomes a much smaller percentage of our national economy."


Philip Hammond has never been Boris Johnson's number one fan, to put it mildly.

They clashed on Brexit, with the former chancellor being booted out of Parliamentary Conservative Party during the wild political autumn of 2019.

But even though he is back in the party fold, and with the ermine of a Tory member of the House of Lords no less, the former occupant of No 11 isn't mincing his words.

While he sticks to the broad consensus backing the government's massive emergency economic support during the pandemic, Lord Hammond looks very pointedly to the challenges that will come next, questioning whether Downing Street will have the right priorities.

His not very subtle implication: Downing Street would rather be popular than do the right thing.

Lord Hammond said the challenge facing the government was "how to move out of this crisis period".

He praised Mr Sunak for getting the economic response right so far and said he was "very confident" his instincts were "the right ones".

But he said his fear was "that as a populist government, giving money away is always easier than collecting it in", and warned that ministers had "made very extravagant commitments to the British electorate in good faith before the coronavirus crisis".

"Not all of those commitments can now sensibly be delivered on and that's going to be a big challenge for a government that regards its short-term popularity as very, very important," Lord Hammond added.

He said he was "not sure" the current "top leadership" had the "appetite for being unpopular, in order to do the right thing".

The prime minister has said the chancellor will set out the government's plans to "build back better" in next Wednesday's Budget.

Mr Sunak has promised to lay out the "support we'll provide through the remainder of the pandemic and our recovery", adding: "I know how incredibly tough the past year has been for everyone, and every job lost is a personal tragedy."

A Treasury spokesman added: "The chancellor has always put protecting jobs and livelihoods at the heart of everything he has done and that will not change.

"This Budget will give people the reassurance they need in the immediate term, and he will be honest with the British people about how we are going to recover beyond this crisis."

Labour leader Sir Keir Starmer said it was "not the time" for tax increases for individuals or businesses, given the ongoing impact of the pandemic.

'We need some help now'

James Green, who runs the Whitstable Oyster Company in Kent, says the impact of the pandemic has been "tough".

"Obviously there's Covid-19 at the beginning of the year, which affected us, the restaurant side of the business and the oyster sales. We were open over the summer. We were busy, like most coastal places, and then we shut again in November."

But Mr Green adds: "For the oyster side of the business the impact of Brexit is probably had more of an effect than Covid-19, I would say."

As a result of Britain leaving the single market, he says he has tons of oysters sitting on his farm that he cannot sell either to France or domestically.

Mr Green says the chancellor should give the shellfish industry "some help to get us through now - otherwise there won't be one".


The former chancellor Philip Hammond says ministers will not be able to stick to pre-pandemic spending plans.


Newsletter

Related Articles

0:00
0:00
Close
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
×