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26 August 2020

The world to come: The crisis next time

The virus exposed deep fractures in the UK’s society and politics, and the government’s mismanagement of the crisis made Britain a global laughing stock. It is time to break out of this humiliation.

By Jonathan Powell

Let us try to be optimistic. Despite the complete mess the government has made of managing coronavirus, the crisis could lead to us finally grappling with the deep fractures in our society and politics that the virus has laid bare.

Having allowed our care homes to become mortuaries for our old people, we cannot ignore the chronic problems in the way we deal with our ageing population. We cannot continue with underpaid staff, families facing catastrophic care costs and bankrupted local authorities. The problem is not a lack of answers – they have been set out in repeated studies. But no government has yet had the courage to tell the people what the costs are and how they will be met, and no opposition has been interested in bipartisanship on such a thorny issue. Now they have to act.

The crisis has also revealed the holes in our welfare safety net. Efforts by the Treasury to support people through the juddering halt in the economy, while admirable, couldn’t cope adequately with the gig economy and the self-employed. We have to accept that the economy has changed since the 1950s and we need a new way of ensuring no one sinks into penury. Perhaps the government will have the courage to consider a universal basic income and see if it can be adapted to ensure the welfare system really is a safety net rather than a sieve.

When we decide how and when to pay for the staggering costs of the crisis, we will have to address the unfairness and over-complication of our tax system. There will be a unique opportunity to make tax genuinely redistributive by tackling the inequitable concentration of asset wealth for some and the inequitable burden falling on salary slaves. Perhaps the government will have the courage to bring capital gains tax into line with income tax, reform inheritance tax and consider a wealth tax.

The world of work will change. Many people who can will continue to work from home rather than go back to the office. And many of the jobs that have disappeared during the crisis will not return. We had already reached the stage where AI and automation were replacing jobs. Instead of trying to restore the jobs that have gone, we have an opportunity to be on the leading edge of the technological revolution and give people the skills they need for the new world. A wise government would be introducing radical innovations in the way we educate people throughout their lifetimes.

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The crisis has exposed some of the fundamental unfairnesses in our society. Not only has my generation already eaten the lunch of our children and grandchildren, but we are loading them with debt and reduced life prospects. Young people stayed at home during the crisis to save the older generation and now we are going to have to rebalance between the generations, for example by making the housing market accessible to the young. This unfairness applies even more to the BAME community, which has suffered disproportionately from the virus.

The catastrophe has also exposed the dysfunctionality of our politics. The Brexit revolt was a sign of how fed up people had become with the unresponsive political system. Now there is an opportunity to fight our way back from polarisation to the sort of cooperative politics that marked the 20 years after the Second World War, where the two main parties built a consensus on social reform. If we are to tackle the problems facing us, we need a government that thinks long term, and that in turn will require more cooperation, more effectiveness and less venom.

Lastly, coronavirus illustrated how bad government is at predicting the next crisis or preparing for it. We have to make fundamental reforms to ensure that we not only spot the problem – scientists have been predicting a pandemic for decades – but are adequately prepared to deal with it. The next crisis is global warming. We know it is coming but we are not doing enough to meet it. Perhaps our experience with the virus will force the government to take serious steps before it is too late.

But being optimistic is not enough.  The world did not change after Spanish flu in 1918 and it will not change now by itself. It did change after the Second World War, but only because serious-minded officials and politicians, such as William  Beveridge, devised the radical ideas and policies that would create a country fit for heroes. Now we need to do the same thing all over again.

Britain has become a laughing stock around the world because of the government’s mismanagement of coronavirus. We need to break out of this humiliation and show we can address the wreckage that has been exposed by the withdrawing tide. But it will only happen if the people force politicians to act.

Jonathan Powell was Downing Street chief of staff from 1997 to 2007

Read the rest of the “world to come” series here

This article appears in the 26 Aug 2020 issue of the New Statesman, The world after Covid