Jonathan Haskel, Professor of Economics at Imperial College Business School, spoke at the Treasury Committee on 20 May
The Committee put questions to the Governor of the Bank of England Andrew Bailey, as well as Bank of England representatives, including Professor Haskel on Bank of England Monetary Policy reports and the potential impact of a post-coronavirus (COVID-19) recession on the UK economy.
Among the subjects addressed during the session were the government support packages to help small businesses and limit job losses.
“We faced a very difficult crisis and a very difficult situation which has hit very suddenly,” Professor Haskel said. "Originally the small firms found it difficult to absorb these schemes and as the government was saying earlier on that situation has improved with their redesign."
The subject of which industries and members of society were likely to be hit hardest by a recession was also raised during the discussion.
We faced a very difficult crisis and a very difficult situation which has hit very suddenly
“One area that has been hit very hard is the construction sector,” said Professor Haskel. “The construction sector disproportionately employs self-employed people and so their incomes are going to be hit.”
"The health or otherwise of that sector is very important in thinking about how self-employed people will do. But again, that’s a tricky question which depends on when the lockdown might be released and when construction can carry on under social distancing measures."
He added that the hospitality sector, such as restaurants and hotels, would also be disproportionately hit, noting that this sector typically employs "young and unskilled workers who don’t have savings to smooth their way through a recession".
“The overall stance on monetary and fiscal policy is going to be incredibly important in understanding how we’re going to pull out of this recession because the fortunes of those kinds of workers are going to fall very strongly upon aggregate demand in the economy,” he said.