The COVID-19 pandemic: the world reels
Within hours of the Prime Minister’s decisions to first request and then impose restrictions on the daily life of the British people, the streets of our cities and towns were almost deserted. By this past Monday even parks were emptying.
Rarely in our history has there been so graphic an illustration of the wisdom of former Labour Prime Minister Harold Wilson’s adage that ‘a week is a long time in politics.’
But much more than the physical appearance of the United Kingdom has changed this month. Fear has transformed the mood of the British public (and its politicians) to the institutions of state – most obviously, the National Health Service.
The sentiments of Robert Jenrick, Housing and Communities Minister, on the BBC’s flagship ‘Today’ programme yesterday morning, that ‘people working in the National Health Service are absolute heroes’ have been echoed by government ministers from the Prime Minister down.
In a budget statement on March 11th, rapturously received on the Tory party back benches, the Chancellor of the Exchequer, Richi Sunak said: ‘whatever extra resources our NHS needs it will get.’ Even then, given the Prime Minister’s record of promising more than he delivers, scepticism was still warranted.
After all, this is a government that only last year was forced to deny that it was negotiating a trade deal with the United States which involved ‘selling off’ the NHS. That charge was never plausible; but discussion of a deeper involvement of private sector USA firms in the British health system was part of the negotiations.
Now, as the current COVID-19 outbreak unmasks the threadbare patchwork of a USA health system that ‘Obamacare’ ultimately failed to resolve, any appeal of the American model is vanishing.
As Robert Shrimsley, the Financial Times’ political columnist noted on Tuesday, as he dissected the shift in the political winds: ‘There will be an absolute demand to fund spare capacity in the NHS… the Tories already face a reckoning on under-funding… voters will not tolerate another NHS winter flu crisis.’
The BBC, another national institution under attack, has sniffed the wind too. Its presenters are now studiously avoiding confrontational interviews that would leave it open to charges that they are undermining the national interest because of their alleged political bias. There is, as one reporter noted on the World at One this week, a conscious effort to ensure that it is fulfilling what he described as ‘its public service mission.’
Instead, however, the BBC is going back to what some of its top executives have grown up with, solid, impartial, reporting. Ministers have been given plenty of air-time. But there has been no shortage of interviews with senior doctors and nurses revealing the dire shortages of personal protective equipment: nor of the now emerging cost of the government’s failure to heed the early warnings about what Professor Hugh Montgomery described on Channel 4 News on Wednesday as the ‘tsunmi’ of COVID-19 cases now sweeping towards hospitals.
A couple of months (at most) of data means it still too early for professional economists to predict how hard the British and world economies will be hit by the current COVID-19 outbreak. Kristalina Georgieva, Managing Director of the International Monetary Fund, is warning of a global slump far worse than in 2008/9 recession.
For the UK, given that, according to the government’s Office for Budget Responsibility, Brexit would already be hitting Britain’s economy this year, and looking at the latest indicators across Europe for business activity in March so far, a deep and protracted recession looks unavoidable.
This means that Britain is again facing a surging budget deficit and a potentially destabilising rise in the level of government debt to national output, currently an unnerving 80%. Unlike in 2008/9, however, public sector institutions like the NHS will not be in the firing line.
And, in a world reeling from a pandemic, ‘global Britain’, has lost its allure. It is not just prospective trade deals with America but also increasing immigration from far off countries like corona-ravaged India (the price of any trade deal with the sub-continent) that look like a bridge too far.
So too the risks from higher trade barriers and tariffs with the European Union, or the costs of developing and launching our own satellite-based military communications system rather than asking for re-admittance to Europe’s functioning Galileo system. The loss of our varied roles in the EU, including hosting the European Medicine Agency, are also looking a bit like shooting ourselves in the foot. There will be no move to re-join the EU, but when you are in trouble you tend rely on our neighbours and friends for help – indeed the Prime Minister is now urging us to do just that!
What are your thoughts about the political and economic ramifications of the COVID-19 emergency? Do add your comments to this blog
Stewart Fleming, journalist and previous foreign correspondent for the Financial Times in Washington.