Daniel Hannan: Slash taxes and ramp up spending to boost economy
Influential free-marketeer Daniel Hannan has told City PM’s The City View podcast that the government should both cut taxes and increase spending to help Britain recover from the coronavirus crash.
The former Tory MEP also said Britain should be exiting its lockdown much quicker, given that other European states are doing so without suffering a second wave of coronavirus cases.
Speaking to City PM’s editor Christian May, Hannan said: “If you don’t cut taxes now, you have a guaranteed depression.”
Yet he also said that, “in a little nod to the Keynesian consensus out there”, the government and local councils should increase spending on infrastructure to provide more stimulus to the economy.
“Not only would I be cutting taxes now, I’d also be bringing forward spending on infrastructure spending and so on.”
He suggested local councils could repair roads, for example. “Every council should be using this time of low traffic to fill every pot-hole, even if that means eating into next year’s budget, because we need to be spending and we need to be cutting taxes in the short term.”
On taxes, Hannan recommended suspending national insurance for employers and employees in the short term.
Hannan is one of a small group of conservative lockdown sceptics, who argue that the government went too far with its coronavirus restrictions.
The UK now has the second highest death toll in the world and the world’s highest death rate per million. But Hannan told The City View that UK coronavirus restrictions were was too harsh as “the spread of infections already peaked before the lockdown was introduced”.
He added: “My fear is that we are now the slowest country coming out of this closure at a time when the rest of Europe is firing up its economy again.”
Hannan pointed to Sweden as an example of a country that has benefitted from not locking down as stringently.
However, Sweden has suffered a much higher fatality rate than its Scandanavian neighbours. Meanwhile, its economy is on track to contract at a similar rate to other European countries that put strict lockdowns in place, according to its central bank.