Lord King said he understood the reasons for quarantining most of the population, but that there would be a backlash if the restrictions were kept too long.
Speaking at a webinar hosted by the Policy Exchange think-tank, King said, “The idea that you can have a lockdown that lasts for months is unrealistic. The government needs an exit strategy, which can be gradual and initially involve those who have had the virus and are able to travel and return to work. If we have a lockout for too long, there will be a rebellion against it. “
King said it was unnecessary to speculate on the extent of the health and economic damage caused by the crisis, but stressed that there would be significant costs in terms of business bankruptcies, job losses and increased dissatisfaction.
“It is understandable that health officials are focusing on the general aspect of this – the need for a lockdown to reduce the spread of the virus,” he said.
But the former governor of the bank said it was also important to think about the mental health of people who are unemployed or whose businesses go bankrupt.
“There are people who find it difficult to go out to buy food and who are trapped alone. Young people have their university studies and school exams canceled, and this will have a significant impact on their well-being and their future career. “
King added that the government had deliberately decided to lock down the economy and therefore had a responsibility to provide cash flow to businesses, large and small, and to act as the client of last resort.
The Treasury needs to speed up its plan to offer financial assistance to the self-employed because the target date of early June would be too late for many, he said.
Alistair Darling, the chancellor responsible for rescuing stricken banks at the start of the 2008 crisis, said the government was not providing a consistent message on the Covid-19 tests.
“It is essential in any crisis that the message be clear,” said Darling. “At the moment, we don’t know if the government is going beyond NHS staff to the public at large. Unless we know who got it or who got it, we will always be late. “
Darling also said that Chancellor Rishi Sunak must make sure that the measures have an impact where they are needed.
“It is very easy to announce a policy, but much more difficult to get it delivered. Economic measures are absolutely vital, but for freelancers, delivery will take longer than people have in many cases. “