Leading article

North exposed by Covid-19 'economic emergency'

THE announcement of multiple coronavirus vaccines means there are now realistic hopes of a return to something approaching normal life during 2021.

The Department of Health hopes to start vaccinations for priority groups next month.

However, restrictions on our way of life are certain to continue for many months until the vaccination programme has been completed.

This means that the economic carnage wrought by Covid-19 on households, businesses and high streets will deepen.

Chancellor Rishi Sunak put it in stark terms as he delivered a spending review this week: "Our health emergency is not yet over. And our economic emergency has only just begun."

His warning that the financial crisis is somehow only beginning is chilling after almost nine months in which whole sectors of the economy have been largely frozen.

Unemployment and redundancies are already rising and many in the private sector feel their job security is precarious.

The tighter lockdown restrictions starting in Northern Ireland today emphasise the severe difficulties swathes of the economy have been experiencing since March's lockdown and the introduction of various public health measures to slow the spread of Covid-19.

When governments ask citizens to do extraordinary things - including to stay away from work, to close their businesses and to avoid shops and hospitality venues - they are also duty-bound to support them financially.

Mr Sunak has attempted to ameliorate the situation, most notably through the furlough scheme, and borrowed a staggering £400 billion so far this year.

Nonetheless, the UK economy is expected to shrink by more than 11 per cent - the sharpest drop in 300 years. GDP in the north may fall by as much as 15 per cent this year.

Figures like these are difficult to comprehend. They have already led to suggestions that financial austerity is inevitable, with cuts in public spending, pay freezes and tax rises among the measures that could be considered.

In this unpromising financial outlook, Northern Ireland - already facing enormous difficulties because of Brexit - is profoundly exposed.

Most of the extra money coming to Stormont following the spending review is ring-fenced for the Covid-19 response.

This leaves the Executive - whose limitations have been exposed at points during the pandemic - with little room for manoeuvre in developing and investing in a post-coronavirus, post-Brexit economy.

The Executive should argue for more funding but must also express an articulate economic recovery plan - and provide confidence in its ability to meet the demands of the coming emergency.

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Leading article