This is a time to be bold and to act now to avoid a second wave of austerity

Alistair Darling, who was chancellor of the exchequer at the time of the financial crash in 2008, rightly says the impact of the coronavirus is going to be “much, much worse”. Which prompts the question: how best should we try to restore the economic damage?

It may be thought premature and even unseemly to be asking this question while people are still dying in large numbers from the direct effects of the virus. But Lord Darling also made the point that the decisions that are taken or not taken in the next two or three weeks could be decisive in shaping our ability to recover.

As we report today, he was speaking for a large part of British business. The British Chambers of Commerce, the Federation of Master Builders, the British Retail Consortium and the British Beer and Pub Association have told The Independent that an abrupt end to state support would plunge the country into a crisis of mass unemployment.

What is remarkable about their pleas is not just their unanimity, not just their support for unprecedented levels of state intervention in the economy, but the mildness of their warnings. The world economy is not facing a short pause, after which its engines can simply be turned back up to normal speed. Some sectors, such as travel, tourism and international education, are facing long-lasting reductions in activity.

But Britain and the global economy faces the serious risk of a recession that turns into a depression. That was avoided in the wake of the financial crisis, by concerted government action, thanks in no small part to the leadership of Gordon Brown, Barack Obama and others, including Lord Darling.

This time, the crisis is greater, and the possibility of collective global action seems smaller – partly because each nation seems to have retreated behind its borders to cope with the pandemic separately, with a beggar-thy-neighbour attitude to, for example, the acquisition of vital medical equipment.

But there are hopeful signs too. The chancellor, Rishi Sunak, and his counterparts around the world were quick in responding to the pandemic by borrowing vast sums to keep people in jobs and businesses afloat. Those lessons were learned last time.

Now comes the hard part. The British Treasury and finance departments elsewhere will already be thinking about how they can retreat from the vast interventions they have already made. Our view is that it is too early for that. There is a surprising consensus this time – which there was not in 2008-10 – that unprecedented increases in public borrowing in rich, stable countries are needed and are sustainable.

The one thing we should try to avoid is a “second wave” of needlessly stringent cuts in public spending, such as those dubbed “austerity” in the last decade.

“This is a time to be bold,” says Ruby McGregor-Smith, president of the British Chambers of Commerce. She is right. This is a time for unconventional economics, not for worrying about balancing the books.