The Cummings Affair exposes the shallowness of the Johnson project

I have often come across the idea of the strategic manager. He (and the gender stereotype is appropriate here) thinks that it is his job to look at the big picture, and leave the detail to his underlings. Indeed, too much detail could cloud judgement, as could working too hard. More than one of my bosses in my professional career had this idea. It always ended in tears. And so it is in politics and in military affairs too. The British Prime Minister, Boris Johnson, turns out to be the latest victim.

Mr Johnson was a particularly prominent exponent of this idea, though, typically, he has so far as I know not expressed it himself, leaving that to his acolytes. They have described how he entrusts detailed tasks to advisers, and then makes decisions based on a solid strategic understanding. He is said to have had a successful 8-year stint as London Mayor on this basis. But only supporters judge Mr Johnson’s two terms as mayor as more than an electoral success. It is devoid of substantive achievement, while marked by ill-advised vanity projects, from the new Routemaster buses (in action but late and over budget because of the unnecessary design requirements imposed on it), water cannon for the police, the infamous Garden Bridge, and so on. The one major success of his term was the London Olympics of 2012, but his personal role was minimal; the real hard work of winning the right to hold them having been done by his predecessor. Meanwhile Mr Johnson kept as low a profile as possible as Mayor, not wanting to he held to account. The job is not nearly as big as it looks, as the government has not devolved much power to the Mayor, and it does not seem a hard job to hold down without doing serious political damage to oneself. Which cannot be said of the role of being UK Prime Minister, which is genuinely one of the toughest jobs in British politics.

The problem with the notion of strategic leadership is that events are driven by detail. Big events are the summation of of lots of small ones. Strategic decisions must be executed at tactical level, and strategic choices are best based on a firm grasp of the detail. More important still is that evidence of whether a policy is working depends on understanding of detailed evidence. You can wait for big picture evidence to emerge, but by the time it does so, it is usually too late. It follows that a strategic leader is very dependent on other members of a leadership team to both provide a tactical understanding, and to filter and feed back information from the front line. This can be done in one of two ways: “Big Beasts” or “Trusted Adviser”. Leaders usually opt for a combination of the two.

The Big Beasts approach requires an alliance with another figure who has substantial political clout in their own right: another politician. The most recent successful example of this was David Cameron’s alliance with his Chancellor George Osborne. Mr Cameron, like Mr Johnson, was a light touch leader, though not to the same extreme. His career ended in ignominy when he led the losing side of the Brexit referendum, but he lasted six years, including a notable general election victory. But Mr Osborne, by no means light-touch himself, did a lot of the work, and indeed often seemed overstretched. Mr Osborne clearly had ambitions to succeed Mr Cameron, but in the end Mr Cameron’s failure finished his political career. But that relationship stands out because it was so successful. More typically such relationships become rivalries, which in turn leads to disfunction. Such was the fate of Labour prime minster Tony Blair’s relationship with Gordon Brown, also Chancellor. Mr Blair’s leadership style alternated from strategic to getting into the detail if required, and his partnership with Mr Brown was at first highly successful. But Mr Brown became jealous, and things started to break down. Given that successful politicians are driven people, this is the normal fate of reliance on Big Beasts. The best leaders use alliances with several allied politicians and don’t become dependent – but that is very hard work, and cannot be equated to the sort of strategic leadership to which Mr Johnson aspires. Mr Johnson instead has taken the opposite tack of keeping any potential rival at a safe distance. His cabinet has nobody close to being a political rival. Only two members stand out as having any political weight. One is Matt Hancock, the health secretary, who is progressively being eaten up by the crisis and will surely be politically destroyed by it. The other is the Chancellor Rishi Sunak, who has had a good crisis, but is so new to senior politics that he cannot be seen as a serious rival yet.

Instead Mr Johnson has gone entirely for the Trusted Adviser approach. In this the leader appoints a team of advisers entirely beholden to him, and selected on ability and trustworthiness. This team keeps a low profile and carries out the detailed work, including the digestion of information coming in from the front line. Such a team usually has a leader. All British prime ministers have used some variation of this strategy. Few have had the implied power of Mr Johnson’s chief adviser, Dominic Cummings. The biggest danger of the Trusted Adviser approach is sycophancy: the tendency to filter out the bad news before it reaches the centre. There is an inevitability to this, and wise leaders learn to adjust for this and try to triangulate with other sources of information. But again that is hard work. Mr Johnson has done something a bit more interesting, by appointing a maverick who is less inclined to be sycophantic.

But there is a cost. With political rivals cleared away, with Mr Johnson’s preference for a low personal profile, and with Mr Cummings’s maverick style, public attention naturally gravitates to the adviser, who becomes seen as the real power, and one that is not politically accountable. And that has now been exposed to breaking point with Mr Cummings’s rather loose interpretation of the lockdown rules so far as his family is concerned. In ordinary circumstances he would have gone, but Mr Johnson’s refusal to sack him confirms to everybody how dependent he has become on his adviser. Mr Johnson himself seems to be at sea, with only the vaguest grasp of details. His recent illness with Covid-19 seems to have taken its toll.

Personally I have some sympathy with Mr Cummings’s predicament in the episode that is at the heart of this affair: the decisions he took back in March when his wife started to show symptoms. My view about rules is that the intent is more important than the letter, and my instinct is to interpret them flexibly, or with “common sense”. That doesn’t let him off the hook entirely. He moved his family from an area of high Covid incidence to one that was at the time a low one (a situation that has since reversed); did he really not expose others to risk during his journey or while he was there?

But the problem for Mr Johnson is a much bigger one. I am in a minority when it comes to my attitude to rules. Most people prefer for rules to be set and obeyed to the letter, as then everybody knows where they are. And people have been sticking to the rules at huge personal cost. Mr Cummings’s behaviour reignites a belief that there is a ruling elite that doesn’t really care about the trials and tribulations of “ordinary people”.(an expression I dislike, but I digress). This is particularly difficult for both Mr Johnson and Mr Cummings because they have built their careers on being champions of “ordinary people” against arrogant elites. This is now exposed as being the fraud it always was.

But even if this affair hadn’t blown up, Mr Johnson would be in trouble. His model of leadership places too much pressure on too few people. It is vastly over-centralised, and it is faced by two huge challenges. The first is managing the next phase of the Coronavirus crisis, which is the loosening of the lockdown, the search for a new normal, and the alleviation of widespread hardship. Second there is Brexit. The transition period is set to end on 31 December, and the government has no intention of extending it. And yet there is an impasse with the EU as what is to replace it. This is not necessarily an impossible challenge. The government can compromise on EU demands (which are after all based on the political declaration that was part of the Brexit deal) and declare victory. But that will take brains and leadership, which are now otherwise occupied, on both sides of the Channel. The government may be successful in passing the blame on to the EU side, with Remainers still in deep depression and wary of stoking up old divisions. But it will look chaotic and add to the general impression of haplessness which is becoming the current government’s hallmark.

Take away Dominic Cummings and what is left? There is no vision of what this country is supposed to become. Successful political leadership is a “both and” business. Both strategic understanding and command of detail. Both an effective core of advisers and cooperation with other substantial political figures. And it is very hard work. With Mr Johnson at the helm Britain is drifting. Can it really last another four years/

What if we treated the science of the pandemic like economics?

Very early in the Covid crisis a wise journalist at the FT (I forget which one) said that scientists were going to learn to behave like economists. Slowly we are learning the truth of that. Almost everybody knows that economists deal with the unpredictable, and treat their advice accordingly, alongside other political arguments. So little is known about Covid-19 and the virus that causes it that we should treat scientists’ advice in much the same way, except when it comes to such important issues as vaccines and treatments.

I have long used this blog to argue that science has severe limitations and does not justify the faith that some put in it. The discipline has, or should have, rigorous processes by which it can express opinions (or hypotheses if you prefer) with increasing degrees of certainty. But only relatively simple propositions can be tested in this way. And the conclusions drawn from the evidence are usually only generalities. Many areas of knowledge are beyond the reach of such rigour. Economics is one example, management and organisational practice is another.

Science remains vital, of course. The search for a vaccine for Covid-19 is an example. It plays to science’s strengths. The proposition that a particular vaccine works a relatively simple one to test, and a general conclusion, rather than one that applies to all people all the time, is what we are looking for. It isn’t worth investing in a vaccine that hasn’t proved itself in the rigours of scientific process.

An example of something where science is of less use, look at facemasks. How effective these are in preventing the spread of the disease turns out to be a very difficult thing to test. There are so many variables. Does that mean we should recommend their general use by the public? British scientists seem be suggesting that the answer is no, though they generally try to avoid saying anything at all. Interestingly, in Asia the view seems to be that they should be worn; doubtless they would say that scientific evidence does not show them to be ineffective either. And the Asians do seem to be doing a much better job of managing the disease.

This is the null hypothesis problem. What do you believe, absent proof? Some scientists like to say “nothing”, as if that was a neutral answer. But there is no neutral answer if choices depend on it. This sort of muddle seems to have been behind Britain’s late lockdown, which has been so disastrous. The government says it was following scientific advice, and there is no reason to doubt their word. It was very early days in our understanding of the virus and the disease, so the scientific advice was not clear – though some claim it was. In Britain the null hypothesis was that a lockdown would be ineffective, so action was delayed. Elsewhere (Asia again ahead, but places like New Zealand too), the null hypothesis was that a lockdown would be helpful, until shown to be otherwise. This was a variation of the precautionary principle.

Now we are in a much trickier situation with regard to how quickly to ease the lockdown. The precautionary principle is a lot less use here, as there are harms on both sides. I have a lot more sympathy with the government this time, and I think they are right to be pushing the envelope, which in turn is opening debate. But they can’t appeal to science if they are looking for definite guidance.

So, if we start to look at the science more like economics, what might we suggest? What follows is based on evidence, but the hypotheses developed have not been tested to anything like a scientific standard. But no sensible public policy is going to be.

What we are learning about the disease is that it is not as contagious as feared at first, but that in some situations it is still highly contagious. Early in the crisis some people suggested that the overall infection rate was very high (over 50%), but that this was not showing up as most people were asymptomatic. In fact, mostly, infection rates have been pretty low (below 10%), where general populations have been tested. But there have been some pretty spectacular exceptions, where a single individual has spread the disease to many. A conference in Singapore was an early example; there was a ski resort in Austria too, and recently a nightclub in Korea; care homes have been a major trouble spot. This suggests to me that enclosed spaces with many people in them are the main danger, as well as residential environments with a lot of people mixing. Further evidence seems to show that hospitals, and perhaps care homes, can be made safe by the use of personal protective equipment (PPE). Hospital workers don’t seem to be suffering more than the population at large.

So if I’m right about that, we need to keep pubs, restaurants and nightclubs closed, except where they can serve customers outdoors. Outdoor activity generally is probably relatively safe, and the 2m social distancing advice here in Britain is probably overdoing it unless you are stopping to talk to somebody. Alas trying to change that advice is probably too much of a communication challenge. Intermediate environments, such as shops and schools, are much harder. Steps need to be taken to keep densities of people low, and my feeling is that facemasks should be mandatory (though that is probably impractical in schools). One particularly important question is air travel. On the face of it an aeroplane is a particularly dangerous environment. But if everybody wears masks? We need more evidence.

Meanwhile testing infrastructure needs to be improved so that we can test more people and get the results quicker. Something seems to be going badly wrong in Britain. Paradoxically I suspect that an obsession with ramping up scale hasn’t helped. Building large scale facilities first to gather samples and then separate facilities to complete the tests looks to me like a process flow nightmare. More testing will give us much more information and if it is combined with effective tracking we can understand better how the disease is passed from person to person.

A further idea worth exploring is that of “red” and “green” zones, with tighter restrictions in the former. The problem of course is of people moving from red to green. Perhaps you could allow restaurants to open in green zones, if all customers are made to leave name, address and phone details (with those living or working in red zones not allowed to go there). You could use a smartphone app to help enforce much of this, though that may be too Chinese for Britain.

Using such policies we can haltingly work our way to a new normal, until the scientists and technologists give us a vaccine or cure. Economics is no science, but it is not useless either. Just as politicians are used to dealing with economic problems, so too they help reduce the damage that this pandemic is doing to our society by using what evidence we have.

The Coalition at 10: the wrong turning on public services

Ten years ago, when the Conservative and Liberal Democrats entered coalition, there was a certain energy about the way the new government wanted to approach public services. Gone would be the lumbering, heavy-handed nanny-state of “New” Labour. In would come something more focused, less costly and with a greater community involvement. The Economist enthused about the coalition’s apparent radicalism. In 2020, almost nobody remembers this energy. If the verdict is not entirely negative, the Coalition’s record on public services was more failure than success. It is as well we try to understand why that was.

The energy came from a meeting of minds between the Conservative modernisers led by the Prime Minister, David Cameron, and the “economic liberals” from the Lib Dems, led by his deputy, Nick Clegg (often referred to as “Yellow Bookers”). Neither faction had a secure grip on their own party, but there seemed to a meeting of minds across the coalition’s leaders. Alas neither leader had a strong grasp on how to manage public services, and most Conservative ministers had their own take on how things should be done. The left has made its principal line off attack on “austerity”, and blamed lack of funding for the coalition’s failures. But problems went much deeper than this.

At the start, though, it is clear that something needed to be done. After 13 years Labour’s public service policy was both bogged down and bloated. Labour’s strategy had been borne out of a tension between Tony Blair, who favoured business-friendly and market-oriented approaches, and Gordon Brown, who favoured top-down discipline and expanded budgets. Mr Brown won, mostly. The result was mountains of guidance coming down from on high, a highly complex system of numerical targets, and in the case of the NHS, a massively over-engineered commissioning system (“world-class commissioning”) supported by the biggest and most complex transfer-charging system in the world (“payment by results”). It was a job-creation scheme for management consultants, whose output was blather designed to incorporate as many as possible of the favoured buzz-words, and a slow atrophy of decision-making. Labour had achieved a lot in their 13 years, raising health spending and driving up standards in schools, but by 2010 the whole system was looking more than tired.

Unfortunately the Coalition found that sweeping out the nonsense was easier than replacing it with something better. The first thing to fall by the wayside was any idea of community engagement. Mr Cameron had promoted this through his idea of a “Big Society” which overlapped to a degree with the Lib Dem idea of community politics developed in local government. But Whitehall, both politicians and civil servants, jealously guard their power and nobody wanted to make concessions to interests not represented in Westminster’s lobbying industry. I had a sharp experience of this when local parents in Wandsworth tried to set up one of the government’s new “Free Schools”. This fitted the template of bottom up initiative promoted by Conservatives before the election, but the local, cross-party activists were quickly bundled out of the way, and the contract for the new school given to one of the well-connected academy-school groups. The Big Society was very quickly forgotten.

The next mistake was an obsession with structure over substance. The most costly mistake was a massive reorganisation of the NHS, which destroyed morale, but, to my knowledge, had very little benefit to show for itself. The minister in charge, Andrew Lansley, was given a free hand, and then sacked. Much of the new structure has shown itself to be useless or worse in the face of the pandemic, though that may have been as much to do with policies implemented after 2015 (such as cutting resources for public health), and hospitals have shown themselves to be in good shape organisationally. Another clear mistake was the energy put into the “acadamisation” of schools to take them out of local authority control. This proved to be a succession of costly errors. First managers of the new academies started overpaying themselves, then ministers found that academy chains were making the same mistakes that local authorities did. A huge amount of energy was wasted, and yet the country still suffers from the phenomenon of “coasting schools”. In both health and education the government would have been better off trying to make Labour’s structures work better.

A further mistake arose from a wrong-headed approach to outsourcing. There were two big problems. The first was a policy of divide-and-de-skill borrowed from the private sector. The idea was to divide services into separate functions, define their objectives, and then seek to meet these using as many untrained and inexperienced staff as possible. This may look fine on paper, but it is a complete misunderstanding of what public services are. Public services should be about solving problems, and especially the more complex ones, which will otherwise keep coming back at you. The private sector is not interested in solving people’s problems: it just wants people to keep coming back for more. Solvi8ng problems requires different services to be integrated, not carved up, and it requires highly skilled professionals to craft solutions around services users’ needs. The disaster that deskilling entailed is especially evident in social services and criminal justice.

There was one case where the government wanted to solve complex problems, using a people-centred approach implemented by skilled professionals. This was the troubled-families programme, which was to focus on 100 families that generated a totally disproportionate amount of impact on public services. Alas this fell foul of the second big problem: the idea of “payment by results” – the same words as Labour’s NHS transfer-charging system but with an entirely different use. The idea was to pay organisations more if they achieved measured results. Unfortunately, in the case of troubled-families, there was no good numerical basis of measuring success on the sort of timescale needed, so it simply led to the usual perverse incentives. Furthermore this type of remuneration ruled out smaller social enterprises that were unable to manage this type of financial risk, but which were more likely to embody the kind of public service ethos needed.

The coalition’s record was not all bad. The reform of university funding stood outside other reforms and was based on the recommendations of a commission appointed by the previous government, not to mention being led by two of the government’s more intelligent ministers – Vince Cable and David Willets. It secured additional resources for universities, allowing them to expand their intakes, including to more disadvantaged students. It compares favourably with the zero-fees approach used by the Scottish government, which forced universities to restrict access to the disadvantaged. Gradually people understand that the loan finance system works like a graduate tax, though the more recent imposition of high interest charges undermines this. That leaves plenty of problems with universities their financing, but it was a major step forwards.

Other bright spots on public services included improving school provision for disadvantaged pupils, through the pupil premium and better accountability, and a much stronger focus on mental health. But many big problems, like social care, were left unsolved.

After the coalition ended in 2015, the Conservatives doubled down on all the worst aspects of the coalition’s policies, with an almost vindictive cutting of public money. This came just as the longer-term problems stored up by earlier policies started to come back, with an increased crime rate, for example. In 2016 the new prime minister, Theresa May, tried to reverse this, but was quickly overwhelmed by the Brexit nightmare.

Labour’s top-down approach had got stuck, but the Coalition and the then the Conservatives on their own, looked for the answers in the wrong places. Readers of this blog will know what I think. Public services must become people-centred, allowing complex problems to be solved by crafting solutions across the boundaries of existing agencies. That cannot be achieved using a structure answerable to Westminster, or even at regional level (Scotland and Wales have just as many problems), but by devolution of power and accountability to a much more local level. This should be standard Lib Dem policy, though was not pushed in coalition; a few more Labour people talk about it nowadays, though it looks far from the way current Tories approach things. I would like to think it could be the basis of a Lib Dem-Labour-Green coalition, but I’m dreaming.

The Coalition’s failure shows just how hard our political system makes the effective management of public services.

Boris Johnson should be very worried by Keir Starmer

In the middle of a pandemic, Sir Keir Starmer’s start as leader of the British Labour Party has been inevitably muted. The news is dominated by the epidemic and the government’s response. There isn’t much time for any opposition party. But in these early days the portents look very good for Labour. Its members have made a very good choice.

Most of the attention has been drawn to Sir Keir’s performance at the weekly ritual of Prime Minister’s Questions (PMQs). In the first two weeks the Prime Minister, Boris Johnson, was ill and could not attend. But instead of handing over to his deputy, as previous leaders have done, Sir Kier took it on himself. This was an interesting side-stepping of the usual parliamentary protocol games. And then when Mr Johnson did become available, he easily overwhelmed the prime minister. His style was quiet but focused. “Forensic” was the description universally used, referencing Sir Keir’s former job as QC and Director of Public Prosecutions. It is a style to which a bluffer like Mr Johnson partially ill-matched.

How much does PMQs matter in the great scheme of things? The public barely notices. But it damages the morale of Conservative backbenchers, and the pressure on an immature government team could lead to it to make silly errors. The idea floated by the government that all MPs should return to Westminster, so that the boisterous atmosphere of PMQs might be restored, and so make things look a bit less bad, looks to be just such a silly error.

A second portent comes from Sir Keir’s cleaning out of the front bench team. His predecessor, Jeremy Corbyn, valued loyalty over competence and the front bench was full of weak performers. Sir Keir’s team looks much stronger, though the parliamentary Labour Party is not as strong as it once was, so choice is constrained. But Mr Johnson is also a loyalty over competence operator, and his own front bench looks particularly weak. Which for a “no-details” style of leadership is a big problem. Sir Keir’s aim is to challenge the government’s competence by contrasting it with his own.

A third, and highly significant portent comes from Sir Keir’s refusal to challenge the government on the Brexit transition. Many are saying that the transition period should be extended, not least because of the virus, as there is not enough time to negotiate a trade deal by the end of the year. It’s a fair line of attack, but Sir Keir’s failure to take it up shows that he is the first Labour leader since Tony Blair to have a clear sense of political strategy.

As opposition leader, Mr Blair was very careful to pick his fights with John Major’s Conservative government only on a very limited range of issues. His aim was to take the fight to the Conservatives and win over their former supporters. To that end he projected similar policies but superiority in style and competence. The next Labour opposition leaders were Ed Miliband and Mr Corbyn. Neither were prepared to take the challenge to the Tories. Instead they hoped to win by rounding up a “progressive majority” from Lib Dem and Green voters, and from people who had previously not voted. Anybody who supported the Tories was suspect, and the party did not want to make the compromises needed to win them over. Instead they challenged the government on a very broad front, portraying them as something close to evil. This motivated the activists. They succeeded in winning over many Lib Dems and Greens, and even (especially in 2017) bringing out previous non voters. But these were neutralised by people put off by their perceived extremism, who moved over to the Tories.

By showing restraint in his attacks on the Conservatives, on Brexit, and indeed on the Coronavirus crisis, Sir Keir shows that he has grasped this. The priority is to win power, and this can only be done by persuading former Conservative voters to come over. And it is particularly important not to put off people who support Brexit.

Let’s look ahead to see how this strategy might play out. The most likely scenario is that Mr Johnson’s government will muddle through the crisis, and intervene enough to limit the damage to the economy. In this event Sir Keir’s message will be “the same, only different”. He will pursue the government on issues of competence rather than policy. Mr Johnson looks very vulnerable here, and with a little luck his government could go into free fall like Mr Major’s, and never recover.

A second possibility is that the Conservatives will lurch to the right. After a hard Brexit, the government tries to roll back the extension to government seen as the crisis has developed, in the hope of creative destruction from which a leaner, healthier economy emerges in time for the next election. There are undoubtedly some Conservatives who want to go down this route. But it would be highly unpopular in the country at large. If this develops, then Sir Keir will broaden his attack to favour stronger public services as well as competence.

A third possibility is that the stress of the Coronavirus crisis causes the government to completely unravel, leading to a Conservative rebellion which results in a National Unity government involving Labour. This is after all what happened in both the world wars in the last century, when the prime minister (Asquith then Chamberlain) was perceived to be out of his depth. There is no Lloyd George or Churchill in the wings, though, so this does look rather unlikely. If this happens it will provide Sir Keir an opportunity to demonstrate fitness for government, while doubtless the Conservatives would tear themselves apart.

Should Labour leftists feel betrayal? Certainly they will see their wilder causes sidelined or squashed. Sir Keir has signalled a tough line on antisemitism; this covers those who criticise Israel obsessively while taking an indulgent approach to countries like Russia and Venezuela. But they should stay calm. Once in power it will be quite easy to tilt policy in a socialist direction in the aftermath of this crisis. Getting power is the main thing, and then consolidating it. Mr Blair and Gordon Brown showed the way. It is not widely appreciated on the left just how far Mr Brown in particular advanced the boundaries of the state and the cause of practical socialism.

How should Lib Dems react? it is commonplace to hear the thought that the party flourishes if Labour leadership is moderate, after the party failed to make much impression when Mr Corbyn was in charge. This is clutching at straws. If Sir Kei8r’s leadership develops as I expect, the Lib Dems’ only chance is if Sir Keir is indulgent towards the party because he thinks it could be useful. He might if he thinks that it could keep the Conservatives out of 20 or more seats that Labour would struggle to win themselves. He would certainly much rather deal with the party in a hung parliament than the Scottish Nationalists. The Lib Dems might get some political space around immigration, since Sir Keir will not want to open up too big a gap the Tories there. Brexit will be a more troublesome issue for the Lib Dems. Otherwise there will be little open space.

What you will not see is Sir Keir taking up electoral reform. He might duck and weave, as Mr Blair did, or he might rule it out. He will not want to distract attention from his core message that the Tories are not fit to govern.

Of course, in the early days of a new leader it is very easy to project your expectations onto him or her. Perhaps that is what I am doing here. But this is my working hypothesis, and Mr Johnson should be very afraid.

How do the achievements of the Coalition look ten years on?

Ten years ago, in May 2010, a new government was formed from a coalition of the Conservatives and the Liberal Democrats. It lasted the full five year term, but it is usually regarded as a political failure, especially for its junior partner, who have been marginalised ever since. If coalitions don’t work for all parties than they are unlikely to be repeated. I don’t want to go over that well-trodden ground, though, but to ask whether the coalition served the country well. Its leaders thought that however unpopular they were at the time, they would be vindicated by history. How is that working out?

I had envisaged doing that in a single post, but on reflection I could not do the topic justice. I will attempt it in three. In this post I will look at the Coalition’s handling of the economy, and in particular the controversy around austerity. In the second I will look at the attempt to reform public services. And finally I will look at its record on the country’s governance, where the most important event was the referendum on Scottish independence in 2014.

The Coalition’s record on the economy usually gets a bad press, except from confirmed Conservative supporters. The government inherited the aftermath of the Great Financial Crisis, and in particular a budget deficit of an eye-watering 11% (though we may soon learn to regard this as being a bit tame). All parties in the 2010 election promised to eliminate this deficit to bring the national finances back to order. The trajectory offered by the Conservatives was the steepest, and this was the target adopted by the coalition. It involved some tax rises (especially raising VAT), but most of the strain was taken through expenditure cuts. The scale of such cuts was spectacular. Only the NHS and education were spared, and, with demand on the NHS rising through an ageing population, even the NHS budget amounted to a real-terms cut. The cuts were less spectacular in execution than planned, and the government’s targets for the deficit were missed repeatedly. The actual outturn was strikingly similar to that promised by both Labour and the Lib Dems in the election.

These cuts provoked a massive depth of anger from the left. “Austerity” has been turned into a totem of hate, alongside the nebulous idea of “neoliberalism”. For all this anger, or perhaps because of it, it is hard to take this seriously. Rational debate has become impossible. All cuts are always evil, in this way of looking at life. There is no such thing as wasted public spending (though some might debate spending on weaponry, trade union allies quickly close that thought down). In the country at large this is a minority view though. One of the critical truths grasped by Gordon Brown and Tony Blair before their victory of 1997 was that until Labour showed that it could embrace austerity if necessary, not enough people would ever believe that the party was fit for government. That is probably still true.

But the criticism of the Coalition’s austerity policies goes much wider than the angry left. Most neutral economists join in. In fact I don’t think I know of a respectable academic economist who has been prepared to defend it. The argument here is that as the country was in recession, there was massive spare capacity, and the country needed fiscal stimulus to put this capacity back into use, and reduce long-term damage. Instead government cuts prolonged the recession and stunted the subsequent recovery. Few defenders of austerity bother to respond to this criticism. Instead they suggest that national debt was out of control and it was vital to bring it down to calm financial markets so that the government could finance itself. This thought was clearly on the minds of coalition ministers in 2010. It was the time of the Greek debt crisis, and nerves were jangled. The Treasury undoubtedly played the risks up – fiscal conservatism is in their DNA. The academics respond that as the UK had its own currency, the government could always pay its debts; anyway interest rates on government debt did not suggest market panic.

This is an interesting line of debate. The complication in the case of the UK is that it has a large and persistent current account deficit, and so is dependent on foreign finance, unlike Japan, another major economy with a floating currency and big debts. There is strength on both sides of the argument here. Ten years on the academics look closer to the mark than the Treasury types. But there is some strong hindsight there.

I am much more interested in taking on the academics’ core case against austerity though, which is that there was a lot of spare capacity in the economy in 2010. This view arises from an idea that economies have a natural rate of growth, arising from steady productivity growth, in turn arising from improved technology and more sophisticated management methods. In the 2000s they thought this rate for developed economies was about 2% a year. If GDP fell below the level suggested by this “trend rate” than that suggested spare capacity. This meant not only that the gap was bigger than it first appeared in 2010, but that with the slow rate of growth once the economy started to recover, that gap was never closed.

That line of reasoning suggests that all was well with the British economy in 2008 when it was hit by the financial crash. But that was far from true. A closer inspection of the country’s productivity growth in the years before the crisis shows that it was entirely based on two sectors: finance and business services. The crash proved that in the case of finance this growth was a work of fiction – a product of stoking up risk and optimistic accounting. It was scarcely better in business services, which was riding the bubble. There are plenty of good reasons for thinking that the idea of a natural rate of growth is out of date – this is a favourite topic in this blog. The truth is that growth in the UK since 2000 was driven by the expansion of a financial bubble, the import of cheap products and services from Asia, and massive immigration from Central and Eastern Europe, all fuelled by fiscal and monetary policy that was surely too loose. By 2010 the financial bubble had burst, cheap Asian imports had run their course, and although immigration was continuing, it had slowed and the general view was that it was causing excessive social strains. It was not a question of quickly trying to recreate the pre-crash economy, but the much slower job of building a more sustainable replacement. Fiscal stimulus would simply have led to a flood of imports, not new and better jobs.

In fact “rebalancing” was widely spoken of as a necessary thing at the time, though most people fondly thought of this as a return of old-fashioned manufacturing. Looked at it a bit more closely, and much of the academic criticism of the coalition actually reflects this. They bemoan not the cuts to services and benefits that so angered the left, but the lack of public investment. There is some justice to this, but investing public money wisely is much harder than it looks. Usually the money ends up wasted in vanity projects. Some of the suggested ideas, such as the expansion of Heathrow airport don’t look so good in hindsight. Others: better interconnecting rail links between northern cities, look a better idea, and the coalition could have done much better there. A failure to support green energy projects was a constant complaint by some Lib Dem ministers.

As it happened, the economy did rebalance, and quite quickly. Unemployment was never as serious as the GDP figures suggested it should be, and the employment statistics became very healthy. The problem was that this rebalancing was towards a new and rather ugly economic model, with insecure gig workers at its base. Inequality did not get worse in the Coalition years, but it didn’t improve by much either. The generation gap, with younger people in insecure jobs and rented homes, their elders with nice pensions and property wealth, has got worse. The coalition did little for regional inequalities either. And yet none of these problems was easy to solve, and the government’s main priority was to dig its way out of the financial crisis.

Overall my verdict on the Coalition economic record is good, but not that good. Damning with faint praise, perhaps. But the country was in the grip of wider economic forces: catch up by China reducing the flow of cheap goods; the spread of the gig economy; the saturation of the “stuff” economy. The glib criticism of macroeconomists does not do justice to these forces.

Lib Dems will always argue that the worst aspects of austerity on public services came in the following Conservative majority government, which doubled down on the cuts. There is some justice to this, but we can’t let the party off that easily. The Coalition’s record on public services is about more than austerity, as I will discuss next time.

Universal Basic Income – why it doesn’t deserve the hype

To judge from my Facebook news feed and Twitter updates, the idea of Universal Basic Income (UBI) is gaining traction on the political left and centre-left. The extraordinary measures being undertaken by governments to prop up economies hit by Coronavirus and associated lockdowns somehow make it look less outlandish. In Britain the idea is getting closer and closer to being official policy for both Labour and the Liberal Democrats; it is already there for the Greens. I have always been a sceptic, and I still am.

The attraction is easy to see, and the crisis has highlighted its virtues. It is one answer to the massive information gap that lies between governments and the citizens they serve. This makes it impossible to target aid accurately to those in need. Government schemes like the furlough scheme leave many gaps, are subject to administration delays or injustices, and doubtless pay lots of money to those who don’t really need it, including fraudsters. On the other hand, attempts to target better involve humiliating procedures to verify need, which are often administered by officials that seem to take pleasure in the exercise of petty power for its own sake – and who are not empowered with discretion to use common sense nor accountable for the human results of their work.

This information gap has two main causes. The first is privacy, whereby we deliberately limit the information we make available to the authorities, or anybody else. The is one of the core aspects of what we understand by freedom, and all psychological benefits that come with empowerment and autonomy. But there is also the sheer scale and complexity of the information problem. Even in countries unworried by the idea of privacy, like China, face colossal problems trying to understand individual people’s needs, and often resort to arbitrary rules.

UBI is income that everybody is entitled to, on the minimum possible qualifications (such as nationality; there would likely be some form of age-based entitlement too). This would eliminate the need to provide targeted help in most cases, its advocates argue. In particular it would not depend on whether the citizen is working, and could replace unemployment benefit, or, in the UK, Universal Credit. There is no need for the state to gather data on income and work status in order to check entitlement.

Some support for this idea has recently come from Finland, where a randomised trial was carried out between UBI and unemployment pay. It was found that UBI did not reduce the incentive to look for work, while significantly improving the wellbeing of those receiving it. One worry about UBI, especially if it is substantial enough to replace entitlements to benefits, is that a significant number of people would give up the search for work, because they would not need it. But advocates point out that the incentive to work is improved because people keep all the extra earnings (subject to taxes), rather than having benefits withdrawn. The Finnish study provides some interesting evidence here.

But if the incentives argument falls away, there remains the question of how the state manages to pay for it. There is a dilemma here. The higher the rate of UBI, the more it can replace other benefits, and so deliver the advantages advocates want to see. In the UK Universal Credit is an obvious target, and so is the basic state pension. And yet as soon as it reaches this sort of level, the state outlays required to cover it become massive. Of course there are savings. Since the state pension is already a more or less universal entitlement, there may not be much extra outlay. Tax free allowances on pay could be withdrawn. But the gap remains massive.

Some on the left wave all this away, based on the insights offered by Modern Monetary Theory (MMT), which basically suggests that budget deficits can be funded by borrowing or printing money, and so traditional ideas of balancing budgets are old hat. Now I’m not as rude about MMT as most conventional economists seem to be, but it does seem to have encouraged the sort of magical thinking I last remember being widespread at the time of the tech boom in the late 1990s (“losses are the new profits”). The problem is that UBI would potentially unleash a wave of extra consumer demand across the economy, which could lead it to overheat and break down, through inflation or a debt crisis (because of the need to borrow foreign currency to buy imports sucked in by the excess demands). That is unless demand could be dampened down in some way, i.e. taxes raised. This is not a question of just taxing wealth, and top pay either. This may be a good idea anyway, but it is not likely to have a big enough impact on demand to head off trouble. Some combination of increases in basic income tax, national insurance and VAT will be needed too. This needs to be discussed more openly by the idea’s advocates.

But my reservation goes deeper. To me UBI seems to be trying to shortcut the sort of interventions that our society needs. It is an attempt to give people money in the hope that their problems will go away. That may work for a lot of people, but we will still be left with a vast residue of people with more complex needs, which a basic UBI does not begin to solve. I prefer solutions based on a highly devolved interventions by empowered professionals, able to tailor solutions across the whole range of public services from health, to housing, to law enforcement. The way to bridge the information gap is through people intelligently examining individual needs and crafting complex solutions. This will entail a judicious mixture of conditional and unconditional benefits. Our public services have been going in the opposite direction for two decades or more, as successive governments have sought to take the humanity out of public services and replace it with targets that turn out to be meaningless. By focusing so much on UBI, we are distracting attention away from the real crisis in public services.

The craze over UBI illustrates one of the biggest failings in a our politics. The search for simple, if radical, ideas instead of trying to understand the humanity of our society, and going about the messy and painful business of adjusting to this reality.

Tim Harford and “degrowth”: missing the broader point

In his weekly column last Friday, Tim Harford criticised the concept of “degrowth” now being promoted by some environmentalists. But I think he’s missing the main point.

Degrowth, as presented by Mr Harford, is the idea that the stopping of economic growth must be part of the policy toolkit towards creating a sustainable economy. As such he thinks it is misguided.

His reasoning is sound. The current Coronavirus epidemic has halted and reversed economic growth, and that has indeed has been mostly beneficial to the environment, by reducing carbon emissions for example. But the environmental effects are not proportionate. Even this scale of disruption is not enough to deal with the climate crisis, for example. Much deeper changes are required. Much better to focus on these instead, rather than being diverted into arguments over growth. He further argues that the idea is too blunt an instrument to deal with the environmental crisis, and that policies need to be much better targeted to be persuasive.

I agree on both counts. But Mr Harford quotes one supporter, Ricardo Mastini, as defining degrowth as “the abolition of growth as a social objective.” Put like that, I don’t think it can happen soon enough. Economists and policymakers are far to focused on growth, and its companion, productivity. They need to abandon this if they are going to help with the transition that the global economy surely needs. For conventional economists, the idea that growth will reduce to zero or even reverse is very scary. Our entire financial infrastructure seems to built on an assumption that we will keep growing. There is also an assumption that in order to find the resources to deal with environmental and social ills, the best way is to divert the proceeds of growth. And as growth has slowed in the developed world, these economists are getting increasingly anxious. They moan loudly about low productivity growth and try to find culprits. Instead they should be trying to think through the implications of slow, zero or negative growth, and the best way of promoting public policy in that environment. If that means big changes to the financial system and policy framework, then we have no time to lose in working out what those changes should be.

The first thing that economists need to appreciate is that the main reason that growth is slowing is through the freely made choices of people based on a rational appreciation of their needs. It is not some kind of disease that needs to be cured. That would apply whether or not an environmental crisis was engulfing us. Productivity gains apply to a shrinking proportion of the economy; consumption of goods is long past rational saturation. Productivity improvements in one part of the economy are balanced by losses elsewhere as people pursue less intensive lifestyles (think organic farming), or demand more expensive healthcare treatments. That is the way things are. Get used to it.

Meanwhile, chasing after productivity can be positively damaging. Direct environmental damage is easy to see, for example as modern agriculture decimates biodiversity. But it is also more subtle: the systematic hunting down of resilience in the name of improving efficiency is one of the reasons that the Covid-19 epidemic has been so destructive.

This leaves society with two huge problems. The first is changing lifestyles to the environment to recover, rather than degrade further. The second is to reduce inequality and the piling up idle financial resources while too many others pile up debt. This is what economists need to be thinking about, rather longing for steady economic growth.

To me “degrowth” is about changing the conventional policy mindset. And that is an urgent task. More people need to be talking about it, not fewer.

Suddenly then gradually is how the economic downturn will be

On Friday (1 May) I was astounded to hear that the US stock market index S&P 500 had its best month since 1987, after its dramatic fall in the earlier months of the year. I was aghast when I further thought I heard that it had recovered practically all its lost ground in 2020. That reinforced an impression that many people are in denial about just how bad things are, especially in America.

Some notes of caution before readers rush to sell their American shares, or short the index. The S&P 500 was in fact still 13% below its starting point at the end of April, and fell nearly another 3% on that Friday. I probably misheard a comment about the tech-heavy NASDAQ, which was just 2% down. The movements of share prices arise from dark forces, whose nature only becomes apparent long after the event, if ever. Newspaper headlines attributing movements to some coincidental event (on Friday it was trade relations with China) are just speculation. There may well be a much more rational explanation for the stock index level other than delusion. Though it still looks like a long-term “sell”.

The impression of delusion was heightened by statements, from the President among others, that the USA is past the peak of the virus outbreak, and many states are relaxing their lockdowns. In Britain the Prime Minister, Boris Johnson, has been saying the same thing about being over the worst, though still very reticent about relaxing the lockdown. Economically at least, however, the world’s troubles have only just begun. The troubles are in several layers.

The first issue is that the virus has proved itself to be both very infectious and deadly, and it is still very far from beaten. The relaxation of restrictions in the USA is most likely to result in a surge of infections that will overwhelm the hospitals in the states where it happens. This is a complex business, and some US states may not in fact be very vulnerable, because their populations are very dispersed and populations relatively static. But that does not apply to many of the states relaxing restrictions, such as Georgia. In Europe each country is wrestling with how to relax the lockdown, without reigniting the crisis. Only a small number of states (and not in Europe) seem to be able to relax lockdown significantly, and that only by drastically limiting travel in and out. It will be impossible to get back to normal until a freely available vaccine or cure is found and distributed en masse. That’s a long way off.

The second issue is that this crisis is a global one; no country will be able to bounce back and lead the recovery. In the Great Financial Crisis, a relatively small number of countries took the initial brunt (the USA and Britain mostly); others (in particular other European countries) suffered in the aftershock, but while the initial impacts had stabilised. Across the globe countries were able to launch a massive stimulus to use up the spare capacity created by the crisis, with particular credit to both the USA and China. This will not happen this time; both of these countries have had suffered severe shocks to the supply sides of their economies, which limits their ability to carry out effective stimulus. States across the world are intervening massively to limit the economic damage of the pandemic, but this is strictly damage-limitation. Reversing much of the damage already done is another matter.

And this leads to a third problem, which is the biggest of all. The world is coming to the end of one of its 40-year growth cycles, and the crisis is about to cause a deep unravelling of the growth model that drove it. They old tricks don’t work any more, just like Keynesian stimulus did not work in the 1970s.

The current growth cycle began to take off in the 1980s. It was driven by three main things. The first was continued productivity growth by developed world businesses, partly through the application of new technology, and partly by a ruthless cutting away of “slack” regardless of whether this represented waste or sensible resilience. One feature was the extensive use of outsourcing, and the stretching of supply chains. The main problem with this steady transformation of business was that the rewards were skewed towards the owners of capital and the top managers and their advisers, and not most of their workers. The second growth driver was steadily increased consumer spending, driven by steadily increasing private sector borrowing, in turn linked to increasing property valuations. This allowed the mass of consumers not benefiting so much from the productivity gains to nevertheless keep growing their consumption. The problem with this is that it is not sustainable in the long term – but as the saying goes, tomorrow never comes. The third factor was the entry of the less developed Asian economies as a source of cheap labour. Japan was the first, followed by Korea and Taiwan, and then China and India. It is important to note that this development was not exploitative for the most part. Those Asian economies benefited hugely, which allows those taking a world view to say this 40 year cycle has been by far the most beneficial to humanity (if you gloss over environmental impact). What was happening is explainable using the ancient economic principle of comparative advantage, and benefited both sides. What people did not appreciate at the time, and for the most part still don’t, is that these gains are time-limited. As the developing nations catch up, their labour increases in price, and so the developed world ceases to benefit. And so it has been as China in particular closes the gap.

The whole system is now unravelling at speed. Just how much developed world industry has been relying on reduced resilience to get next year’s increase in profits is only now becoming clear. As an illustration this Economist article on the US meat industry shows how scary it can get. And, of course, reliance on cheap foreign labour to keep prices down looks like a bad bet too, as hospitals scramble to find masks and gowns to protect their workers. But the most worrying development in terms of its potential impact is that the shock will puncture the ever growing cycle of consumption, debt and property values.

What this amounts to is a prolonged and almighty economic slump. Demand management through government stimulus will only help so far because the crisis is killing productivity and supply. What will emerge from this is hard to say. Many hope that it will be a kinder, more sustainable and more equal economic system. But there are other possibilities of course. I have written before that there will be a huge impetus to get back to familiar world of before, and this will undo many of the short-term hopes raised by the crisis. But over the longer term something better is possible.

“Gradually and then suddenly,” is the famous Ernest Hemingway quote about bankruptcy. With this crisis it will be the opposite.

Will the Euro survive the Coronavirus crisis?

So far in this astonishing episode, the world’s financial systems have held up well. Remarkably, lessons have been learned from the Great Financial Crisis, both in the behaviour of policymakers, and in the resilience of banks. But many claim that the Euro is especially vulnerable. Are they right?

The crisis so far has not been good for the egos of the Europocrats. The response has been led almost totally by the governments of its member states. It turns out that the EU really is just a free trade area after all. When something more important than trade comes along it has nothing important to do. And when its leaders at last got together to sort out a financial response, the outcome was pathetic, and spoiled by the sort of bickering shows that there is little solidarity amongst the member states.

Yanis Varoufakis, the former Greek finance minister, called this out on BBC Radio 4. The most important part of the EU’s infrastructure, the Euro, has turned into an instrument of oppression. The rich northern states, notably Germany and the Netherlands, were vetoing any serious aid to the most afflicted states, such as Italy and Spain, while not allowing them to help themselves. He said that German leaders should level with their public: the Euro was really good for their economy, but to keep it going they needed to be more generous to other members. The Italians, in particular, are throughly disillusioned and could provoke an existential crisis for the zone.

There is plenty of truth in what Mr Varoufakis is saying, but nobody should bet on the dissolution of the Euro just yet. Critics of the system miss two things. Firstly, as this week’s Buttonwood column in The Economist has pointed out, the European Central Bank (ECB) has learned a lot from the previous crisis and has now become the EU’s most effective institution, and not bogged down by the bickering that undermines the more overtly political arms. It has, amongst other things, rushed to buy up debt from Italy and Spain, thus greatly assisting a strong fiscal response to the crisis. This has the effect of mutualising their debt by stealth. The ECB has learnt the art of doing just enough to keep the Euro going, while being unable to fix its deeper flaws.

The second point is more subtle. It is wrong to suggest, as Mr Varoufakis does, the Euro is in effect a plot by Germany to rob Italy. It is better understood as a conspiracy between German workers and Italian savers. The Germans get plentiful and secure jobs, because their currency is held down, allowing its industry to run a surplus. Italian savers get more buying power for their money in a currency that is stronger than their own would be, with less risk of inflation. The victims are Italian workers, whose firms struggle to make progress with such a strong currency, and German savers, who lose buying power. It is arguments between these victims that drive the acrimonious politics of the Eurozone. Politicians like to blame an outsider, so German ones like to blame lazy Italian workers for low returns by their savers, and Italian ones like to blame the Germans for screwing their businesses.

So the Euro’s losers drive the day to day politics, but as soon as it looks as if they might succeed in their goal of causing the collapse of the Euro, the winners, German workers and Italian savers, hoist it out of trouble with a twitch upon a thread. The clearest example of this is Marine Le Pen’s tilt at the French presidency. Her bid featured resentment at the Euro, and it got her into the final round against Emmanuel Macron, but it rapidly collapsed when, in one of the debates, she floated the idea that France might leave the Euro. French savers, many of them older voters sympathetic to Ms Le Pen’s anger at liberal elites, suddenly realised that there could be a cost to their protest and deserted her. Something like this effect will happen in Italian politics if anti-Euro politicians get too much traction there.

So the Euro is safe but the politics is grim. What is needed are two things: more enlightened self-interest from northern leaders, and more willingness to embrace economic reforms by southern ones. The big trading surpluses by northern countries mean that they could easily be more generous to their southern neighbours by buying their goods and services or through direct aid (though lending them money simply builds trouble for later). Each of the southern economies has economic inefficiencies that their leaders should do more to tackle. In Italy it is excessive petty regulations to protect economic vested interests. In Spain it is lack of labour market flexibility. In Greece it is a failure to collect enough tax, especially from the better off. Until they tackle these they will always be supplicants and politically vulnerable.

For all that, the Euro has some very challenging times ahead (as do the US dollar and the Chinese Yuan, for differing reasons). Italy could easily be faced with a banking crisis, at a time when the attempts to mutualise banking risk across the Eurozone are incomplete. The acrimony will continue.

And this will set the EU on a trajectory that makes it more and more resemble the Holy Roman Empire. This was a tangle of German states, led by an Emperor with little practical authority. It was much despised by Enlightenment thinkers, and finally brought to an end by Napoleon. But it was the foundation of the strong commerce and devolved administration that makes Germany (and Austria) such successful states today. This is something Anglo-Saxon observers almost never understand.

The political consequences of Covid-19 depend on what the government does afterwards

There has been an understandable rallying round by the public during the Covid-19 crisis. Here in Britain, as in most places, the governing party has seen its popularity rise (the main exception is the USA). Will this last?

As with so much else in this crisis the answer seems to depend on which party you supported in the first place. Conservatives think they will keep the opposition parties on the back foot for the long term. The obvious precedent is the Falklands War in 1982. In spite of the initial calamity, which could be blamed on a careless government, people rallied to the flag. Mrs Thatcher’s Conservatives had been doing very badly in public opinion polls beforehand, but they won a landslide in the next two elections.

Opposition supporters, on the other hand, think there will be a reckoning as the dust starts to settle, and the government’s handling will be judged as inept. We are starting to see signs of a concerted assault on the government this weekend. The Sunday Times is running a story claiming that the government failed to follow scientific advice at the start and lost five weeks in its initial response. Kier Starmer, the new Labour leader, has joined in, after being reticent beforehand. Will the charges stick?

I certainly think the government made a false start. Contrary to what is repeatedly being said, though, this was not because they were ignoring scientific advice. That advice was muddled and contradictory; there were plenty of senior science types who backed the government up, though others were urging an earlier lockdown. There was a disastrous dalliance with the idea that the country should allow the virus to spread and build herd immunity; this was following one of the many strands of scientific advice. What was lacking was political nous. Politicians, not scientists, should be the experts on what the public will accept, and how best to communicate what the government wants it to do. The reason why so many governments went fast and hard for a lockdown in other countries was mainly political. It was a very simple message to communicate and it made them look decisive. Boris Johnson, the prime minister, showed poor judgement and has nobody else to blame.

But once the government grasped that the critical issue was not to overload hospitals, they started to do much better. The NHS built up capacity in intensive care with impressive speed, and, unlike in Italy, they have not been overloaded. The whole chain from reporting symptoms to admission to the ICU has been thought through and works (unless you live in a care home, unfortunately). Two issues nag, apart from neglect of care home residents: the slow rate of testing and the lack of personal protective equipment (PPE). Both partly go back to the government’s slow start, as other countries got ahead of the UK in stressed global markets. There has also been organisational ineptitude, especially in the case of testing. Public Health England, in charge of the testing (not actually part of the formal NHS) seems to have been using methods copied from Soviet Russia. They have been slow to take up available capacity, and getting the tests to the people that need them has been not been given much thought. Most people are expected to drive themselves to facilities set up in car parks, and even this is badly managed – I was caught in a 20 minute traffic jam outside the facility set up in Chessington World of Adventures, which I just wanted to drive past, and which would ordinarily handle much higher volumes with no disruption at all.

Still, the public probably don’t think anybody else would have done better – it doesn’t bear thinking about what would have happened if Labour had won the election last December and Jeremy Corbyn had been prime minister. I suspect the attacks on the government will resonate with the usual suspects and change few minds.

Much more important is what happens as the crisis subsides. There are some tricky decisions ahead about how and when to release people from the lockdown, but I don’t think the government is going to get this badly wrong. For all the criticism, it is managing the issue quite sensibly. The real risks are when life starts to return to normal, and the government works out what to do next.

Top of the agenda is our old friend Brexit. The government insists that it will not ask for an extension to the transition period, which ends on 31 December. It evokes too many bad memories of how Theresa May’s government lost control; there is also a powerful myth in the government’s inner elite that delaying deadlines weakens the government’s negotiating position. This is risky; the country is likely to plunge head first into a hard Brexit that could be very disruptive. On one view it would be throwing salt onto the woulds left by the pandemic; on another the pandemic will have dome so much damage already that few people will notice. We’ll have to see.

Next comes the economy. This deserves a separate post. The signs are that damage to the pre-crisis economy will be severe and there will be no quick bounce back. Also government finances will be in tatters. The challenge will be to make sure that panic about the latter does not prevent action about the former. With ultra-low interest rates, government finances are not nearly as scary as they will look. The early signs are that the Treasury has learnt from its mistakes after the Great Financial Crisis, and ministers are not ideologically averse to throwing government cash around. That should prevent catastrophe; the public will forgive a degree of recession.

But the big issue will be catching the zeitgeist of how to change things after the crisis. In my last post I said that people will want to get back to where we were before. But there will still be some shock and reevaluation; the public will expect more than a shrug. What to do about the working-class heroes of the crisis, the nurses, hospital workers and care home workers, will be central. There is a public perception that these groups are undervalued by society. But what to do? Paying them more will be very expensive on public finances and almost certainly need more taxes to balance it. If the government picks up and runs with this idea they could prove unstoppable at the next election. It would mean trashing 40 years of Conservative ideology. But that doesn’t mean it won’t happen.

Alas other issues thrown up by the crisis, such as the precarious nature of so many jobs, and the poor housing conditions of so many of the less well-off, will be rapidly forgotten by most people, and the government will take little or no action. A more interesting question is whether people will feel more sensitive to environmental issues, forcing the government to take these more seriously. Previous crises would suggest not, but this is a different crisis in a different time.

Politically all crises represent both threat and opportunity. There is plenty of both this time. It will be a real test of political mettle. We haven’t seen anything yet.