How Coronavirus will change British politics for good

Harold MacMillan never actually said “events, dear boy, events” are what blows a government off course. Nevertheless, like all the best apocryphal Westminster tales, it captures something essential about politics the Government might ruefully reflect upon in the coming weeks.

For make no mistake, the Government’s agenda lies in tatters. It is not just that grappling with Coronavirus will inevitably delay all other political business in the short to medium term (and yes, that includes Brexit). It is also that when we do finally emerge from this crisis it will be to a world turned upside down. What seems like cast-iron political logic now might prove somewhat brittle on the other side.

If this seems an overreaction, a sharp intake of epidemiological statistics should prove corrective. Earlier this week Health Secretary Matt Hancock suggested the Government’s “very best assessment” put the expected fatality rate at around 1-2%. Meanwhile, estimates suggest the rate of infection could, at the upper end of projections, be roughly the same as for the ‘Spanish’ flu outbreak of 1918, which killed around 50 million people. Even on a more optimistic reading, we may be talking about tens, if not hundreds of thousands of deaths here in the UK. We are in uncharted territory here – this is emphatically not a drill. There is no modern-day precedent.

Politics however, must pretend to continue as normal. The Government faces a nightmarish balancing act; with one hand it must take social fabric-altering decisions – such as closing schools – with the other it must soothe a nervous country. This is the unenviable context for Rishi Sunak’s first Budget next week.

In the parallel universe where we still pay lip service to politics as usual, the preamble has been all about fiscal rules. Well, trust me Rishi – this year you can forget them. Before long, coronavirus will present a difficult demand shock – already you can see pubs and restaurants beginning to look empty.  Then, as the world’s workers go into social isolation, we might see a sizeable supply shock too. Fiscal stimulus feels inevitable, yet timing is everything. A spending splurge now might curtail room for manoeuvre later, not to mention frightening the horses.

Yet if there is one area of largesse the Chancellor must accept, it is the need for an urgent patch-up job on Britain’s creaking welfare state. This is not purely a matter of compassion, nor is it – yet – an expansionary economic necessity. Rather, action is needed simply to help delay the epidemic and save lives.

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Πηγή: capx.co