The waste about to be laid by the combination of Brexit and the tardiness of reaction to the Covid-19 pandemic is likely to at least as bad as the consequences of the brutal monetarism of Thatcher and Howe. As this paper on the legacy of Thatcher puts it: "the combination of high interest rates and a high pound had catastrophic consequences for the economy and industry in particular. Industrial production (including oil output) fell by 6.4% between 1979 and 1980, and average unemployment leapt from 1.3 million in 1979 to 1.7 million in 1980, and continued to rise to nearly 3.3 million in 1986. According to a House of Lords report published in 1985, manufacturing output and capacity shrunk by 20% in this recession." Among other casualties was the UK machine-tool industry, leaving a clear field for the Japanese and continental competitors. Mass sackings not only caused personal hardship but also threw away years of experience.
Since then, UK commerce and industry has endeavoured to hold on to precious expertise through the various financial shocks which have hit the nation. Unless the banks, which now have access to money at unprecedentedly low interest rates, enable our small and medium enterprises to weather this particular storm, they may not be able to maintain key employment this time round.
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