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.
“The obvious precedent is the Falklands War in 1982”
I do not think the Falklands war is comparable with Covid-19. The Falklands war was done and dusted in less than 3 months. Covid-19 will likely still be with us next year.
British and Argentinian deaths during the was totalled less than 1000 if this wiki article is right https://en.wikipedia.org/wiki/Falklands_War#Casualties
So far the UK and Argentina between them have clocked up over 21,000 fatalities from Covid-19 according to the Worldometers site. It is affecting directly through death, illness and loss of loved ones far more people than the Falklands war.
And the UK government ministers involved in any way deserve immediate P45s
I agree with this post that we have two major issues looming in the post-covid19 world; that of UK’s Brexit (where it seems to me that a no-deal Brexit would compound the woes of covid-19 for manufacturing and service industries) and the issue of what the Zeitgeist will be. On the latter it is an unfortunate feature of the lock-down that it is hitting the poorer and more maginalised parts of society particularly hard, with the delays in receiving payments under the universal credit scheme; the difficulty in getting aid to workers in the ‘gig’ economy; and the need for manual workers to go out into a dangerous environment to work, while professionals work at home from their computers – in moreover more spacious houses than the difficult housing conditions for many of the less well-off. The danger of pandemics has suggested the need for more capacity in the NHS, to reduce the dangers of supply shortages of key equipment and the knock on effect in postponement of operations. So might not the Zeitgeist turn against the Government to one better able to address these issues? – as Churchill won the 1939- 45 war but lost the subsequent 1945 election?
And how will the public judge the Government’s slowness to act in the period mid-Feb to the lockdown introduced over the period 16- 23 March? The danger is that the delay will have increased the UK’s mortality figures to amongst the worst in Europe, while not buying any real advantages as compared with those countries that kept up a ruthless policy of trying to contain the disease and introduced social distancing measures more quickly. (eg Germany, Denmark). The crisis is going to be with us for quite a bit longer, and has further episodes to run.
It is going to be important to get the economics right afterwards too. I would question that your comment “with ultra-low interest rates, government finances are not nearly as scary as they will look” is the right way to look at the problem. Money isn’t the main issue.
The partial shutdown of the economy is causing both a reduction in aggregate demand and aggregate supply. The much predicted coming recession won’t be like the post 2008 GFC period. That was mainly a problem of lack of demand. If there are supply reductions due to factories closing down, and crops not being harvested in the fields, the amount of produce which is available for the Government and everyone else to buy is going to be reduced too. A reduction in aggregate supply will inevitably make us worse off in total but the extent of the reduction, left to the workings of the ‘market’, is likely to be very uneven and add to an already previously high degree of inequality with all the political consequences that will bring.
We can, generally speaking, divide up stay-at-home individuals according to whether their income has been significantly reduced, or even been lost completely, or whether they have managed to carry on nearly as usual, and are still receiving close to a full income. For the latter group, which might include both wealthy retirees and well paid footballers, life may be somewhat boring in that they don’t have much to spend their money on right now. They are therefore very likely to notice a considerable improvement in their bank accounts. They are accumulating spending power they would otherwise have used on holidays, restaurant meals, clothing, hairdressing, drinks in night clubs and pubs, petrol for their cars, air travel etc. Those who are less fortunate will probably include those who were previously working in hotels, restaurants, retail, night clubs and pubs etc. There will likely be significant exceptions but, generally speaking, the ones who are doing well at the moment were the ones doing well previously. Those who weren’t doing so well are now likely to be doing even worse.
We are starting to hear the inevitable “how do we pay for it?” question. The correct question should be if tax rises are going to be needed to prevent a surge in inflation when the economy starts to get underway again but productive capacity hasn’t fully caught up with aggregate demand. This is not certain but it is possible and even likely if the shutdown is longer than expected. Those lucky enough to have received their full incomes during the lock-down may well decide to catch up with their spending. Their healthier bank accounts will allow them to do just that. On the other hand those who have been struggling won’t be able to compete and so they could lose out again in a flurry of price rises. It will be important to direct any tax rises that may be necessary towards the lucky group, and some thought should be given to making sure that those who have had it relatively easy during the lock-down do lose some of their spending power afterwards. Those who have had a harder time should be given a little more help, should overall higher taxes be temporarily needed.
Yes I’m trying to think my way through this issue. The most convincing commentators I have read suggest that demand will be more constrained that supply as the economy revives, even though some people will go on a spending spree (which will include me, as we will have just moved into a new house). The crisis is making a huge mess of both many individuals’ and businesses’ balance sheets. Too much government aid is in the form of loans. If that is so then raising taxes on the general population would be a bad idea, although finding some way of targeting the winners would be worth considering. But people might be scared at the size 0f government debt – even though they shouldn’t be.
@ Hugh Brown,
“And how will the public judge the Government’s slowness to act in the period mid-Feb to the lock-down introduced over the period 16- 23 March? ”
It’s unlikely to be remembered at the next election. In any case, it wasn’t about short term mortality figures. The lock-down was a “flattening of the curve” exercise to prevent the NHS becoming overwhelmed. The Govt just about succeeded in preventing that.
In mathematical terms, the integral to infinity, of a “flatter curve” isn’t necessarily lower than a more spiky curve. We’ll have to see how it works out for Germany and Denmark. If there is a quick vaccine found then their policy will be proven to be the right one. But if it isn’t, then they could be spreading the same problem out over a longer period.