The government doesn’t have a choice of either controlling the virus or promoting jobs and growth. It has to do both. So far anti virus policies have dominated, with ruinous effects on the travel, leisure and hospitality industries. The PM is now looking at options to avoid a new national lockdown to control the virus.

Policy has to centre on

1 More intense medical discussion and analysis drawing on worldwide experience of which drugs and treatments can cut the death rate of serious hospital cases.

2 Help with continued shielding of those most vulnerable to serious forms of the disease.

3. Good trace and test systems so more carriers can isolate.

To generate economic recovery we need further relaxation of general restrictions on economic activity. I pointed to the way green policy is damaging large industrial and energy sectors yesterday. Today I highlight the travel, leisure and hospitality sectors.

Some leisure and hospitality businesses think there is no point in opening at all under current regulations, and some are still banned from opening. Some have re opened but face turnover well down owing to the need for social distancing and new methods of working which raise costs. A minority have adapted their business model to new conditions and are trading well. Given current levels of demand and the nature of the government interruptions the majority are unlikely to be able to do this.

On the plus side for the U.K. industry are some of the quarantine restrictions and bans on foreign travel. The decision on Spain in particular gives the U.K. holiday industry a real boost as you would expect many more people to holiday in the U.K. These same regulations undermine foreign tourist serving businesses like Bicester Village and central London.

Talking to some of the affected businesses I encountered one which saw a market opening for top end take away prepared dinners delivered to time share accommodation and is doing well. I found a travel business that has a back up contract for the NHS who as a result has abandoned the traditional visitor travel they offered. I have seen several shuttered businesses, often with older owner managers who wish to avoid social contact with the public. I have seen varied interpretations of the rules by hotels and restaurants prepared to run with lower occupancy and fewer covers.

It was Schumpeter who said capitalism was characterised by waves of creative destruction. The constant search for improvement throws out the old and welcomes the new.

In the last century out went the businesses shoeing horses, and supplying coaches and carts for the horse drawn age. In came the petrol car and van, and the garages and filling stations they needed. The transition happened rapidly, as people found the new vehicles more convenient, easier to keep and faster.Farriers and carriage makers had to retrain and change jobs.Mews properties were adapted to new use.

Today we have a new phenomenon. We have governments launching a huge wave of capital and job destruction. The Green revolution aims to remove the entire oil and gas industry, transform the electricity generation industry, and force change in the way we travel and power our homes and workplaces.

The extent of the planned closures and write offs is large . The mighty oil and gas companies of the last century have to plan the demise of their own main assets. The car companies have to close down all their diesel and petrol making capacity and replace it with very different production lines making very different vehicles, centred around the entirely new technology for them of a large floorplate battery. The home heating industry has to completely change its product range, weaning people off oil and gas boilers.

Governments who favour these changes argue that there will be lots of new green jobs. It is true it will take people to make electric cars and environmentally friendly heating systems. It requires new jobs to build windfarms and put in hydro power. The worry is the pace of this, and meanwhile how difficult will be the transition with massive job losses in the products and services the state wishes to close down.

At the moment there are many more people put off buying a new diesel or petrol car than there are people wanting to buy new electric vehicles. There are more people pausing over replacing their domestic heating system than there are people ripping out the old and spending on the new. The anti Covid Policy inspired recession adds to the dislocation and slashes spending power just when governments want people to buy new heating and transport.

Governments did not need to offer subsidy and incentives to get people to buy the motor car or the smartphone. People wanted them. industry improved designs, generated economies of scale and cut prices until more or most could afford the products. This top down revolution is different. Government has demanded the electric car. It has to subsidise it and wait for industry to improve it so more people will willingly buy it. People want better performance on range, recharge times and battery life, and much lower prices.

People are happy with their gas boilers and will run them until they break down, unless the government forces them to change. One intervention in a market leads to another and another. The danger is this will all prove very expensive for the public purse and will entail substantial direction and intervention in people’s lives to get it done. Too much government intervention will mean lower incomes and living standards as well as less freedom.

The government is asking the question again, should more of the civil service work outside London? It is a good time to review this, given the larger changes being discussed about the balance to be struck between working in an office and working from home.

The case for more civil servants in future working away from the capital is based on the proposition that it would be fairer to spend more of the pay bill around the country, and better for taxpayers to employ fewer people in very expensive central London accommodation. Change of course should be carried out at a pace and in a manner which respects the needs of existing staff who have based their lives around the current pattern of office provision. The large size of the service and the turnover of staff means there is considerable scope for change. It is also a good time to use natural wastage and new technology to raise quality and productivity in service provision.

There is also a case for recognising the wish of many to have more time working from home to save the travel cost and time it takes to get into big cities, especially London. The modern computer allows people to be set up with good means of carrying out many tasks. Some worry that some might abuse the privilege and not work as much as they do when supervised in an office. Modern computers can be tougher managers than a person in the office, as they know exactly how many emails a person has done, how many page views they have managed, how long they have been active on their machine. The civil service could move more towards an output oriented approach to working. Sitting for 40 hours in an office is not a particularly useful skill unless you are there to provide cover for client and customer enquiries. Getting specified work done is.

The number of civil servants who need to be in central London is quite limited. Minister’s private offices can best support the Minister in person. Senior officials who mainly advise Ministers might well find it more convenient to be in the heritage buildings at the core of the central London public estate. Any Central London based public service of course needs to be there. Otherwise many officials can be based around the country, with good computer, email and video conference links to the centre.

There is considerable scope for a better balance around the country, with economies on office costs. The government can also now consider how much work can be done without an office at all.

Many people who rent would prefer to own their own home but cannot afford to. Anyone who owns a home is free to rent if they wish, but most do not want to do so.

Over the long term owning is cheaper than renting. Paying the interest and making the repayments of a 20 or 25 year mortgage may be a bit dearer than renting a similar property. After the mortgage is repaid there are no rent or mortgage payments for the rest of your life. It becomes a much cheaper option, even allowing for the high Council taxes and the repair bills which will still catch you. Best still, the time of least cost is your retirement after you have paid off the mortgage. If you rent the period of highest rents will be in your old age, as house rents trend remorselessly upwards.

Encouraging and helping people to own their own home makes sense for the government too. If more people own their own home the government does not have to spend so much on building and owning extra homes for rent. Part of the large state debt is a massive collective mortgage on a big estate of Council houses and debts to finance grants and loans to Housing Associations to own property. During the heydays of Council house sales some of the receipts went to reduce Council and therefore wider state debt, and some went to build new homes.

Home owners have greater freedoms to improve and decorate their homes as they please. As the value of the property rises, as it often has in the past, so the family have an appreciating asset. They can borrow against it to set up a business or meet other one off costs or investments.

The government wishes to expand home ownership. It is worth doing so . It chimes with the wishes of many people, builds prosperity and can lead on to reduced state debts. State subsidised housing is a dear way of providing homes when many of the tenants would prefer help to buy anyway. Clearing more of the costs and obstacles to home ownership should be a priority. Recent Stamp duty reductions are a good start.

As a free trader I think it is usually a good idea to specialise and then to buy in the goods and services you do not produce yourself. All individuals practise this, relying on the supermarket for our food and the power company for our electricity. They are better at those, with economies of scale, whilst we earn a living as best we can.

It can be true for many things for a nation . There are, however, some obvious limits. It would not be a good idea to rely for your defence on importing war supplies when you need them from countries that may be on a different side in a conflict. It is probably a good idea to produce enough food at home so we do not starve should there be some major disruption of global trade.

The UK needs to reassess its national resilience and ask if it has become too dependent on the goodwill of foreigners to supply many of the things we need. Some things ought to be easier to supply from local sources. Water, quarried stone, many other building materials, timber and energy are heavy and expensive to move around, so going more local could make economic sense.

How would you arrange our affairs so we have more of the essential capabilities and technologies an advanced nation needs?

I have written to the government proposing an energy policy that puts self sufficiency at its core. I will take up the issue of more home grown trees leading to more home grown timber, as the government is already committed to the costs of more trees. We need to turn this into a sustainable resource cutting the need to import substantially.

Importing bottled water looks like a bad idea environmentally as well as Economically, so where are the U.K. entrepreneurs who can win the battle of the bottled waters?

The U.K. government controls a lot of economic activity which gives it power as a buyer to organise competitive procurement that can stimulate U.K. activity in the chosen areas. It needs to learn from the NHS experience with procuring protective clothing, drugs, and medical equipment in the pandemic. It can doubtless improve on its experience then. It relied too much on possible foreign supplies which let it down, and ended up paying expensively for more domestic output in a hurry. Longer term planning and working with suppliers who can match world prices for sustained orders is required.

We hear a no deal exit is still likely, with the UK rightly declining to make the unreasonable concessions the EU wants. All those Remain commentators need to explain the current strength of the pound against the world’s main reserve currency, as they are ever ready to blame Brexit when the dollar is strong.
Those who offer a sensible non Brexit reason for sterling being strong against the dollar need then to ask themselves why they always wrongly blame Brexit when the dollar is strong.

Yesterday I defined some of our defence needs. Today we need to discuss how we carry this into effect.

Central to our defence against a major challenge lies our membership of NATO. NATO is our best protection against another world war. It was born of the experiences of the twentieth century where it took massive alliances to defeat a powerful common enemy on two occasions.

Those bitter experiences also taught us that the UK herself needs great resilience in technology and weapons production. The UK economy in both wars had to be transformed to divert massive amounts of production to the manufacture of warships and planes, weapons, ammunition, uniforms and the rest to maintain and supply mighty forces. As a major assault was made against our supply lines through submarine action, the point was reinforced that we needed to grow our own food and make our own tanks because imported ones might be sunk before arrival or would not be available from their old suppliers.

In the second world war the industrial achievement  was huge. Not only did the UK have good designs of its own for some planes and ships, but it was soon able to make large quantities to replace the heavy losses of the war of the Atlantic and the battle of Britain. We also worked very closely with the USA and needed supplies to cross a dangerous Atlantic.

Today we should review our domestic capability and improve plans to scale up output at home should peril ever face us again. If you wish to defend yourself you have to allow for the loss of some allied support and capability, and need to have under your own control the crucial components and sinews of war. It is no good relying on long supply lines and imported components or ammunition should with our allies we face again a major enemy. Such a review will offer offsets to the state deficit through more employee and business taxes on the extra domestic manufacture, and will help cut the balance of trade deficit as we reduce our imports.

The world has been mercifully short of wars for NATO in the last few years. Mr Trump’s decision to disengage from hot war in the Middle East has made a difference to the demands on our armed forces, after years of war in  Iraq, Afghanistan, Libya and the wider Middle East. This does not mean the world has suddenly got less hostile, or we can afford to relax our guard and save our money on defence.

At the end of the Cold War the UK and other allies did cut budgets substantially because the threat of a possible major conflict in Europe against the USSR (Russia) reduced. Today we do not seek or anticipate conflict against Russia or China,  but have to acknowledge that both those relationships can be testing. Needs may arise that require the West to show resolve to defend itself and its allies were the peace of the world to be threatened somewhere by some nation.

There are state and serious organised crime actors in today’s digital world regularly testing our ability to defend and secure our systems, with challenges to data and phone networks and utility networks coming from afar. We need to spend enough to stay ahead in the cyber world, capable of defending our position and probing hostile systems.

As a believer in free trade and a leading member of the WTO the UK needs to make her contribution to keeping the shipping and air lanes of the globe free for legal commerce. There are pirates and terrorist forces to tackle and possible hostile state actors to impress with our intent and ability to keep international waters and airspace free. The U.K. also needs to understand other countries in the world may seek to exploit our belief in free trade and democracy for their own advancement. We should not be naive or one sided free traders.

As a maritime country with an important fishery we need vessels and aircraft  to police and protect our fishing grounds and to prevent smuggling and people trafficking through our waters.

We do need to spend enough on our own protection. I will be developing how in future blogs.

The public have had an enforced home course in doing much more on line. During the lock down you had to pay bills by electronic means, buy non food items over the net, talk to friends and family by phone or video conference. I had to do most of my  contact work by video or phone link, and everything else by email or blog. Many people have got used to working from home, linking to their colleagues, employer , clients and in my case constituents by the web.

This experience provides opportunity for government to make more progress with its digital transition. Much of government is about taking money off people and giving money to people who need state assistance. Road fund licence, congestion charges, many parking charges and other vehicle taxes are now collected electronically. Many people do now fill in on line tax returns, and VAT is paid often without people realising it when they settle a bill with a credit or debit card. There has also been substantial progress with paying benefits through on line claims.

The two large employers of the state, health and education, are likely now to adopt more of the digital revolution as a result of their experiences during the CV 19 crisis. Patients are being encouraged to go for on line or video based consultations. These can be adapted so the GP who might need an expert opinion can use the pictures to engage  a specialist colleague rapidly when the symptoms are shown over the video link. Use is already made of remote technology for  ordering follow on prescriptions.

Schools have been learning about remote teaching and the electronic assistance to receiving and marking home work. This can be useful when things have returned to a more normal pattern. Remote technology could allow more pupils to access exceptional lectures or lessons as state schools build a library of great lessons from their filmed activities.

Many service businesses already offer digital only services which are often better value because they only use individual employees to do the things that require judgement and differentiation. They  can standardise and automate the rest. Opportunity presents to government and state services. On line is usually more efficient and cheaper offering economies to government as it adopts these methods.

As we exit the EU we will have more scope to decide what items should be matters for national security or resilience. Under EU rules we were allowed to favour UK suppliers of defence equipment, though even here the UK ended up buying support naval vessels from abroad and only confining the warship programme to UK yards. In future we should encourage competitive UK based companies or UK based subsidiaries of world companies to compete for crucial business.

We also need to make sure we have title or rights to use crucial intellectual property in complex systems and equipment. The Covid 19 crisis showed our vulnerability through relying for some medical equipment and protective clothing on world markets instead of having a domestic capability which it would be easy to scale up.

Arranged well this need not  be dearer. It will mean more UK tax revenue and budget savings, as the work will be done by UK employees and profits will accrue in the UK. During our years in the EU we came to rely for more and more of our goods and supplies on imports.

We could grow more of our own timber, generate more of our own power and grow more of our own food. I will be exploring these opportunities in future blogs. They all will help bring down the twin deficits we face- the government budget deficit and the balance of trade deficit.