How will Coronavirus change Britain? How shape Kier Starmer’s time as opposition leader? It feels too early to ask. We’re living in the present. I get hundreds of emails each week from people needing help. The news is bleak, and will be every day until the corner is turned. The only uplifting thing is seeing so many people organising to help their communities. But it’s already clear that Coronavirus will change things profoundly.
First, there’ll be huge pressure to increase spending on the NHS even faster, (despite ongoing real terms increases) and increase the wages of low paid key workers. Mass public clapping for NHS staff exemplifies the mood, and we must rise to this. A White Paper on social care was due anyway: why not seize the moment for a new and lasting funding settlement for both health and social care? Just as in 1945, people hope the crisis leads to something better
But the second big effect of COVID-19 is that we’ll face the same obstacle to building a better tomorrow we did in 1945: we’ll be massively in debt. The Institute for Fiscal Studies think we could easily end up borrowing £200 billion this year – around the share of GDP we inherited in 2010.
Rishi Sunak is quite right to throw the kitchen sink at helping people through this crisis. But there’s no guarantee it will end any time soon: we could be racking up debts at a mindboggling pace for some time.
In 1997/98 debt to GDP was just over 40 per cent of GDP. Gordon Brown left it on course for roughly double that. We had it on course to fall from a peak of 80 per cent to 75 per cent. But instead, it will now surely soar past the 100 per cent mark in the next couple of years into what used to be seen as banana republic territory.
With an aging society, managing this huge debt is going to be a serious constraint on grand plans. How we respond to this double whammy of greater demand for NHS spending but dramatically higher debt will frame Starmer’s time as Labour leader. Labour will, of course, continue to say that whatever we are spending isn’t enough: that’s politics.
But across the world less credible governments will be tottering under the weight of their borrowing. And anyway, Starmer will surely want to restore some credibility on the economy. So will he embrace the government’s offer to join cross-party talks on social care funding?
Third, the case for open borders will be met with more scepticism.
Unemployment is likely to remain elevated for some time. We have just had a million claims for Universal Credit. Yet last week the Guardian carried a piece with the headline: “Fruit and veg ‘will run out’ unless Britain charters planes to fly in farm workers from eastern Europe.”
Really? With unemployment soaring, surely such arguments belong in the past. We must get better at matching the tragically large number of unemployed people we’re about to have with new opportunities opening up: even now there are some sorts of businesses expanding.
This dynamic will be a tricky one for Keir Starmer as a human-rightsy, open-bordersy kind of guy. His campaign video boasts that “Keir took the last Labour government to court for its decision to deny welfare benefits to asylum seekers.” One of his top campaigning promises is that he will: “Defend migrants’ rights: Full voting rights for EU nationals. Defend free movement as we leave the EU.”
Is unlimited free movement really what people want now? Personally I’m getting more emails asking why borders are open at all. (So people can get home, is one answer.) Giving people from any other EU country who happen to be here the right to vote in our general elections? Starmer must change surely direction now.
Fourth, the crisis has made “sinoscepticism” mainstream in British politics.
Coronavirus is indeed China’s version of Chernobyl. I don’t just mean its likely origin in “wet markets” that were supposed to have been shut after triggering SARS in 2002. I mean in a deeper sense. On the one hand, the Soviet and Chinese communist systems enable extraordinary things to be done once a problem emerges, because of their frightening, iron grip on society.
On the other hand such systems make it harder to stop problems occurring in the first place: the Soviets suppressed information about fatal flaws in their reactors, while Chinese authorities arrested doctors who tried to blow the whistle, and denied the extent of the problem: in fact they may well still be doing so.
Even without Coronavirus, we were overdue a reappraisal of our relations with China’s rulers. The Communist party has brilliantly practiced innovation mercantilism, and wiped the floor with the west for decades with a mix of policies both fair and unfair.
This year’s joint statement by the EU, US and Japan represents official recognition that the West’s gamble of the 1990s has failed utterly. China has totally subverted the rules of the WTO and far from democratising, has developed a scary personality cult around now permanent ruler Xi Jinping. (And of course “Xi Jinping Thought”)
Sinoscepticism, like Euroscepticism, cuts across political parties. There are some Baizuo on the left who are prepared to uncritically accept what the Chinese Communist Party say because they are “against the west”. But there are also people on the Left, like the Right, who have concerns about a regime that is visibly oppressive in Hong Kong and imprisons hundreds of thousands of Muslims in re-education camps.
If I were Starmer I would want to be the leading voice for Chinese human rights even if some people in his party don’t like it.
The question of China leads to two final changes this crisis will surely spur.
Fifth, we’ll surely want to put rocket boosters under our industrial policies to protect critical national capacities.
Why is Germany doing better on testing than the UK and France? As Matt Hancock said, Britain “didn’t go into this crisis with a huge diagnostics industry.” Developing such capacity is now underlined as a government priority, but the same considerations can apply elsewhere, from 5G to nuclear power.
In a more unstable world, there are certain things we must be self reliant in, and others where we should trust only close allies.
Sixth, there will be a demand to scrape the barnacles off the ship of state, and slice through bureaucracy. On the one hand, building the “Nightingale” hospitals in just a couple of weeks changes our sense of what’s possible, just as the Second World War did.
On the other hand, watching Public Health England in action – and its slow, centralised and bureaucraticresponse, makes us realise how much needs to change.
Surely its time to learn from Korea? It’s no coincidence that countries with the most effective industrial and innovation policies have also been leaders in controlling Coronavirus.
The case for a Singaporean-style civil service with high pay, small numbers and sharp accountability has never been stronger. This could mean a battle with unions and Starmer by extension. But we must win hearts and minds: many in the civil service work hard for low wages; are sick of carrying weaker performers; and hate losing ambitious colleagues to the private sector.
The coming weeks are going to be tough. For backbenchers like me the focus will be on helping people locally. For the government, on urgent action to manage the crisis. But when this is over, things won’t go back to how they were. Who will best speak for the new mood? I trust it will be us.