Coronavirus must make Boris Johnson wake up – real people, not abstract ‘growth’, must be our economic priority

As we know all too well from 2008, big bank balance sheets don't translate into higher living standards. We need to focus on employment and sustainable, long-term growth

Coronavirus is no ordinary crisis. It is an unprecedented medical, scientific and economic challenge. It is a moment not just for concerted state intervention, but a moment when decades of economic orthodoxy must be turned on its head. Now is the time for radical action.

It is rare for economists on the left and right to agree, but there is now a consensus that what is needed is a stimulus on a scale not seen before – and furthermore, that that stimulus should not focus on the traditional measures of growth and GDP. The goal must be to maintain employment, and focus relentlessly on protecting individuals and businesses.

The stimulus announced by the government yesterday is significant, but still smaller than that made in response to the 2008 financial crisis – nor is it comprehensive. Government-backed loans may help some businesses get by, but they are unlikely to prevent workers being laid off.

We are told to wait for the next announcement, but every day of delay creates greater risk for the economy, leaving people increasingly uncertain whether they are going to be able to get by. The chair of the Office for Budget Responsibility made it clear this morning that now is not the time to be squeamish about adding to the public debt. The government can borrow at low interest rates. And if we take a long-term approach, action now can help the economy recover faster later. The government must become the national insurer for every worker and business in the country.

This means wage guarantees, including for the self-employed; setting sick pay to a liveable level; support for tenants struggling to pay their rent; and the reversal of benefits cuts.

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The new committee structure, announced yesterday, demonstrates the blind eye government is turning to people on the margins of our society and economy. There is no mention, for example, of the voluntary sector, which has done its best to fill the gap left by austerity. It is this sector that will be in more demand than ever over the coming months, and which needs our support.

For decades, we have focused our economic policies on those already doing well at the expense of those falling behind. This is why investment has flowed into our cities, while towns and rural areas have suffered. This misguided approach has left whole communities without the resilience to thrive – or to survive a global crisis such as this.

Coronavirus has shone a spotlight on how wrong our priorities have been. The economic forecasts did nothing to show health inequality rising and life expectancy in decline; did nothing to capture the climate crisis that is already here. As Bobby Kennedy put it, they measured everything, except the things that make life worthwhile.

The economist Diane Coyle has written about how GDP is no longer a useful measure of economic progress and prosperity. GDP is a relic of a simpler time, when the sum of goods and services provided a reasonable proxy for living standards. According to GDP rules, the more risk banks took before the financial crisis, and the bigger their balance sheets, the more they were contributing to the economy. But as we know all too well, these big balance sheets didn’t translate into higher living standards. In fact, they masked the inequalities that had been growing in our societies for decades, and left poor people one step away from disaster.

We need to change our measures of success in order to tell a more accurate story about what is happening in our economy. Like countries such as Sweden, we need to start assessing policies based on our ability to create long-term, sustainable growth and employment, not simply to GDP.

We must anchor our society’s recovery from coronavirus not in abstract economic measures, but in people and communities.

Lisa Nandy is the Labour MP for Wigan and a Labour leadership candidate.