After coronavirus, let’s choose carefully which sectors we want to regrow – and which to let go of

The pandemic has made clear what really matters to our economy. Let's restart it selectively, writes Alex King

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As the government announced that lockdown restrictions would continue for at least another three weeks, the Office of Budget Responsibility, the Treasury’s official forecaster, made a bleak prediction. It warned that GDP could fall by 35% in the coming months, the worst quarter for UK GDP on record, with unemployment rising by more than 2 million to 10%.

Meanwhile, the International Monetary Fund estimated in its latest World Economic Outlook that 2020 would witness the worst global economic contraction since the Great Depression of the 1930s. It said world output would decline by 3 per cent in 2020, 6.3 percentage points down from the January growth forecast of 3.3 per cent. With the collapse in demand for oil, the IMF’s forecast is proving accurate.

Yet in these uncommon times of decreased consumption, a common sense of what matters has emerged. In a YouGov poll published last Friday, 51 per cent of the 4,343 British adults surveyed said they had noticed cleaner air since the lockdown began, while 27 per cent said they had spotted more wildlife. Crucially, just 9 per cent said they wanted to return to life as normal after lockdown.

Coronavirus, it seems, has demonstrated to us the centrality of things other than economic growth. Under lockdown, we value not only our livelihoods, but our neighbours, our parks, our carers. The explosion of mutual aid groups and public demonstrations of support for key workers emphasises this reorientation of our collective priorities away from consumption for consumption’s sake, and towards caring, green and mutual futures.

The Tories’ publication of its list of key workers — after a decade of starving their sectors — has forced them to reckon with the fact that, unlike the financial crisis of 2008, we cannot return to the status quo ante. This crisis has exposed the impact of a decade of underfunding of frontline services which, it turns out, our lives depend upon. Having finally recognised the foundational importance of key workers, the government must now recognise essential parts of the economy which need funding.

We therefore should not abandon growth and investment. We have only ever climbed out of crises when governments step in to restore safe, long-term investment opportunities. During the Great Depression, Franklin D. Roosevelt could only rescue the American people with the New Deal by establishing vast reconstruction lending systems to channel capital into transformative, publicly desirable infrastructure projects that the public wanted, and in sectors the country actually needed to grow, rather than those which perpetuate social ills.

Last week, 170 Dutch academics put together a five-point manifesto for economic change after the coronavirus pandemic. Building on de-growth principles, they argued for policymakers to shift away from economies focused on GDP growth to differentiate among sectors that need to radically “de-grow” – such as oil, gas and mining – and those in need of investment, like critical public sectors and clean energy. We can have value-driven growth where we want — not growth for growth’s sake.

A starting point would be recognising care work for what it is — high-skilled work— and accordingly funding it accordingly. The government must provide local government with the resources to pay care providers enough and adult social care must be underpinned by an appropriate funding model so that care providers do not have to employ frontline care workers on zero-hours contracts.

We have come to discover the value of mutual aid and we should be rebuilding local communities. A report from the Centre for Local Economic Strategies and the Democracy Collaborative published this week provides exciting ideas on the role municipal governments can play in post-pandemic recovery. It outlines a series of policy measures to help build a new democratic economy, from municipal reconstruction investment funds for co-operatives and businesses, to “procurement frameworks” to support suppliers who offer good pay and conditions across public sector supply chains. In true Rooseveltian fashion, the report also recommends a “new local Green New Deal” – a proposal which could comprise investment in renewable energy and public transport, retrofitting housing stock, as well as pedestrianising urban centres.

It’s this kind of ambitious thinking we need to confront the current crisis, and to build something better after it. Business as usual is not an option