Who could have foreseen the extraordinary events of March when the Covid-19 crisis led the Tories to shred every orthodox belief of the past 45 years?
Boris Johnson has been forced to subsidise the wages of millions of workers while throwing more money at business than during the 2008 bank bailout.
Business has been paramount in his calculations. But Johnson has been running to catch up with the reality of infection and deaths.
As recently as 11 March, Chancellor Rishi Sunak was complacently pledging a £12 billion aid package to business. By the following week, £330 billion in loans and credit guarantees had been added and the Bank of England had cut interest rates to barely above zero.
Up to 16 March, the government was committed to a strategy of pandemic “mitigation” which researchers suggested would mean 250,000 deaths by August. Johnson’s abrupt switch to a strategy of “suppression”—with the aim of limiting deaths to 20,000—marked a realisation that the higher rate was unacceptable.
The consequences of a decade of austerity and previous decades of slashing hospital beds and staff were all too clear. General and acute NHS beds have almost halved since the 1980s.
The NHS went into the pandemic with far too few intensive care beds, nurses and ventilators to prevent hospitals being overwhelmed. Rushing to make up the shortfall by turning a conference centre in London’s Docklands into two 2,000-bed wards was unlikely to compensate.
Johnson’s switch to stringent restrictions could yet have an impact, aided by warmer weather, or could prove too little too late as the Tories’ own former health secretary Jeremy Hunt warned.
The pro-business logic of Johnson’s measures led the government to contract—to pay—to bring the entire private health sector in England into the NHS rather than nationalise it. The suspension of rail franchises in effect nationalised rail operators’ losses for six months.
It’s too soon to gauge the political impact. A YouGov poll on 20 March found 59 percent of respondents thought the government was handling the crisis well while suggesting public opinion was ahead of Johnson on measures such as food rationing.
Whether a majority continue to support the government measures is another matter. A soaring death rate or exposure of inadequate NHS equipment or funding could at any point trigger a furore.
The largesse towards business will need to be paid for and experience tells us the bill will fall on the working class. The government may pay up to 80 percent of the wages of millions who are laid off now. But businesses which take loans and defer tax payments will have to pay these back and will cut jobs to protect profits as payments fall due.
There are multiple unknowns —the duration and depth of the pandemic and whether it returns in waves, the depth of the downturn, and speed and extent of the subsequent economic recovery.
But whatever happens, every pre-crisis plan has been derailed including the pledge to “get Brexit done” by December.
There will be pressure to increase spending on the NHS to cope with a return of the virus, and a return to a “normal” winter health crisis is unacceptable.
The government is likely to be left holding stakes in multiple sectors of the economy despite ridiculing Jeremy Corbyn’s modest plans just months ago.
Financial Times columnist Robert Shrimsley noted, “The Johnson government we thought we knew is over. The rest of his premiership will be spent on this crisis and its aftermath. If he gets through this crisis he may be broken by it.”
The impact extends further. The crisis has thrown into question the normal order of capitalism, pushing the free-market economy wholesale to the brink of bankruptcy and stressing the critical role of the state. A societal response has proved the only way to address Covid-19.
It has also provided a glimpse of how whole sectors of industry could be turned to meet society’s needs—bolstering arguments for social planning and production for need.
Most striking it shows the scale of response required to tackle the climate crisis. The aftermath, Shrimsley argued “is likely to be long and painful”. Who it will be most painful for depends on how we all react.