Author: johnredwood

The Chancellor’s second package of support marshalled up to £330bn of guaranteed loans for a business sector facing shutdown of many enterprises.

It offered a welcome holiday for all businesses in the worst affected sectors from business rates for a year. It offered small grants to smaller businesses.

This is unlikely to be enough to prevent a wave of job losses from pubs and clubs, hotels and restaurants, from tourist attractions and events. As some of us pointed out in questions to the Chancellor yesterday evening, he needs to come up with a working burden sharing scheme soon that lets businesses with no revenue keep on their workforce waiting for the all clear on the virus.

Businesses cannot be expected to borrow indefinitely to pay the wages when there are no customers. They don’t need loans, they need revenues. Some restaurants will try take away meals. Some hotels will offer their services to the state as temporary hospitals. Many will contemplate closure to cut costs and reduce losses. The government should do what it takes to avoid this.

I try to accept interviews on topics I know something about and have well based or distinctive views on. Usually the media want to offer an interview on a topic where I am not an expert where they think I will have difficulty supporting the position of my party or government so they can create a split which does not yet exist. When I do get an offer that is worth accepting I spend my preparation time not on the topic itself, because I know the subject and know what I wish to say. I spend the time thinking about all the other things the interviewer might wish to deviate to in the hope of ensnaring me.

There are a series of regular ploys.

1. The creation of a caricature. The BBC often claims to know the  views  of the interviewee better than the interviewee knows them himself. When the person  explains their   view to them they counter argue by asserting they  must believe something else because they have invented a caricature of the person as a “right winger” or “left winger”, or “Eurosceptic” or whatever. It makes the interviews foolish, with the BBC setting out their version of the person’s  view and the interviewee  denying it. They then seek to suggest that their version of the view is the real view and so the   interviewee is in someway dishonest to say otherwise.
2. Undermining by false association. The BBC quickly diverts the interview of a politician who is doing well into an interview about the worst or stupidest thing some other member of that person’s party has said or done recently. The interviewee is forced to deny what the person has said or done to avoid contamination. An original interview about an important subject then becomes instead repeated pressure to get the interviewee to set themselves up as the moral arbiter and disciplinarian for their party with questions about whether the person who misspoke should be  sacked, prosecuted etc.
3. Subverting from past quotations. Someone setting out a cogent and appropriate case for current conditions is confronted with something they said or wrote many years before in different circumstances. It may be that the two views are fully compatible because circumstances are different, but precious interview time is lost trying to establish that. It may be that the interviewee has changed their mind owing to new facts and insights. This should not be a crime unless it is one of those cases where a party does do a major U turn in a dishonest or flagrantly political self serving way.
4. Setting the interviewee up against others in his or her party. Someone making a good recommendation or providing informative background to policy may suddenly be faced with a contradictory quote from another senior person in their party, as if this invalidates their position.
5. Quoting so called experts and insisting that because they are experts their opinion is correct and the politicians must be wrong. The politician is never allowed to debate with the experts and will not have advance warning to be able to explain why these particular experts may have flawed judgement or be coming  at the problem from a biased vantage point.
6.  Mistaking fashionable viewpoints in media circles like Remain and a particular version of Green for facts and attempting to shout down or crowd out a politician who has a considered but different opinion.
7. Trying to ascribe base motives to any politician expressing a different view from those deemed acceptable to the BBC. The interviewer alleges motives of personal career advancement or party interest when someone is putting forward their best judgement of what is in the public interest or the interests of their constituents.

Yesterday the Health Secretary explained the government’s approach to the virus, going a long way to cut contacts between people to slow or prevent contagion. The measures mean the effective closure of a huge part of our economy in sport, leisure, culture, hospitality and transport.

There was no complementary statement from the Chancellor explaining how they will help the many businesses that will struggle as a result. Cash flow dries up with no customers. Many employees will be made redundant, and many businesses will fold.

We need the government to help, to prevent large scale loss of good businesses which will result from this policy. Individuals losing their job or their self employed work will need Income support. I asked about the scheme in yesterday’s blog in the Commons and got various MPs to voice the need for some such relief.

The media are saying we should expect a Statement from the Chancellor today. I hope it includes cash assistance to keep people in work, a business rate tax holiday for larger as well as the smaller businesses in the badly affected sectors, and income help for the self employed facing a big contraction in work and those losing their jobs.

It s time to take stronger economic action to offset the impact government measures against the virus around the world, along with  consumer behaviour is now having on jobs and  business.

It is clear that as the virus spreads so people cancel travel plans, hotels, restaurants and pubs lose clients, cultural and sporting events are stopped, business and academic conferences  abandoned and  discretionary shopping and tourism fall substantially.

Let us take a bad case of what could happen. Let us suppose that the  20% of our economy most exposed to these activities that lose out from closures and loss of customers  are in  trouble for four months. Let us guess that they lose a large 50% of their revenue on average. They are likely to lose more turnover than businesses do in a typical recession, as in some cases what they do is simply banned and in other cases consumers walk away from them in big numbers.  

This would mean a fall of 3.3% in annual GDP just from the impact on the most vulnerable 20% of the economy. There would then be second round effects. These businesses would shed labour quickly as they try to stem their cash losses. Some will go bust with every employee losing their job. This then means lower incomes for people to spend on other things, and a further loss of consumer and investment confidence.

What could be done to reduce this bad outcome? The government could step in with temporary help for employees working for basically sound businesses that have experienced a big loss of turnover thanks only to the special circumstances of the virus.  It could be like the German temporary reduced working scheme which has got through state aid tests.

The terms might be that the government will pay a specified quite high percentage of the wage bill for a company that was profitable up to the end of January, but has faced a fall of more than say  50% of turnover since thanks either to the virus putting off customers or from bans and closures required by law. This would be a grant, available for a limited period related to the progress of the virus. It would be conditional on the business not taking on any extra employees during  that period, and not making anyone redundant. The business would otherwise  be loss making.

It is most important that say a good hotel in a town or city can keep its core staff together during a period of much reduced bookings to be available again for the recovery once we have an all clear from the virus. Putting more businesses through bankruptcy is not a good idea if they are sound businesses for the future damaged by this one off extraordinary event. Bankruptcy puts the costs of the employees onto the state anyway when they lose their jobs, and makes recovery for them and for business more difficult afterwards.

The new facilities to lend to business, and the capacity of the Treasury to delay tax payments are both very helpful to many businesses hit by the virus slowdown. They will not be sufficient for the businesses at the sharp edge of the problems, as their revenues fall too much to survive just on  more loans and deferred tax.

Beware the tyranny of experts.

Whilst like the next person if I fell ill I would turn to a good doctor to help me, that does not mean experts are always right or should make all the decisions.

It has been fashionable for some years to say experts should be in charge of more of our public policy decisions and politicians fewer. This resulted in some famous policy disasters chronicled here . It has also led to greatly contrasting styles of interview on the UK media, especially by the BBC and Channel 4.

If an “expert” is interviewed  they are introduced positively, they are rarely interrupted, they are asked questions designed to let them explain their knowledge and viewpoint. The interviewer is often on their side and usually concludes with a short summary of their main points to reinforce them.

In contrast a politician interviewed on the same subject is often introduced with some critical or derogatory reference or characterisation, interrupted often, asked questions which make allegations or allege views to the interviewee which he or she does not hold, seeks to set the interviewer against the politician with a superior moral position and ends with a put down or critical comment.

I have a bigger complaint about the way the so called expert is interviewed than the politician. I of course think interviewers should be challenging and put alternative views where necessary. When interviewing an expert we should be told

Who they represent

Who pays them

Their political affiliations where they have them

What their main qualification is

The interview should consider covering professional competence where relevant. For example, if interviewing an economist about the current crash, did they forecast it or the last one and what did they say about previous disasters? If they earn money from a related interest the interview should also refer to or ask about that. If the expert is a known supporter of  a particular political party or movement that too might need to be questioned.

No politician should be given an easy interview, but they should be allowed to state their case before it is probed and questioned. I sometimes am frustrated by interviews of Labour people because the interviewer talks over them to the point where we cannot hear what Labour does actually think or recommend about a crucial topical issue. I will look in a future post at the ploys interviewers use to ensure politicians come over badly.