Graeme Cooke, Research Affiliate at the Bennett Institute, reflects on whether Covid-19 will prove to be a watershed in terms of the current public policy paradigm, and considers which issues are most likely to become prominent in the UK’s policy landscape, in its wake
As well as being a major, human tragedy, Covid-19 is presenting a set of interconnected and dynamic public policy challenges of unprecedented scale and complexity. While the political focus is on the immediate crisis, debate about what might follow is already underway. The pandemic, some argue, is a juncture on the scale of 1945 or 1979 that will change the terms of big arguments, open up new opportunities and forge new alliances that can propel generational change. At a more instinctive level, there is a powerful sense that ‘we can’t just go back to normal’.
It is too soon to know if history will judge this to be a major turning point. That will depend on whether causes, ideas and agency come together to turn social, economic and cultural forces into political change. History suggests that this is far from inevitable, as the aftermath of the financial crisis showed. Injustices and righteous demands for change are not always addressed — at least not immediately. For now, we can begin to map out the new policy terrain opening up, either because an issue or challenge is becoming more pressing or pervasive, or because potential solutions or responses seem more plausible.
First, and most obvious is the NHS and social care system. The crisis has starkly revealed the fragility of the health service and brought the perilous state of social care to the top of the political agenda. Significantly more generous funding allocations for the NHS in the coming years are a given, and any future reform will have to grapple with the issue of social care. The big stumbling block has long been funding, where there is a new dimension to the challenge given that the baby boomer generation, whose wealth has long been seen as the route to funding a new social care settlement, have suffered most at the hands of Covid-19. However, if the horror of older people’s experience of this pandemic does not force wholesale reform, it is not clear what will. The larger tax-paying population should probably prepare to contribute to the costs, though with the long-term gain of pooling risk and removing the price mechanism from the provision of dignity and care for older people.
The big political choice here will be between a social insurance model and one that seeks to extend the key features of the NHS to the social care sector. Moreover, the locus of a reformed health and care system will need to be negotiated – especially the appropriate balance between national funding and entitlements, specialist and acute health care services organised across fairly large geographies. There is also a real need for much greater integration between primary, community and social care at local level. These issues add up to a major reform challenge, given the institutional and cultural barriers between the NHS, which looks up to the centre, and local councils, which look out to their localities.
The second, major post-Covid public policy theme relates to the welfare state and key areas of labour market regulation and practice. The crisis has dramatised specific gaps in protection and support, such as for the self-employed or those facing eviction by a private landlord, and these have been made more apparent by the sheer numbers affected. The requirement for government to innovate so quickly, on so many fronts, to patch up the holes in our welfare state has potentially opened the door to wider reform and shattered a number of policy shibboleths (especially for the Conservative Party). Benefit rates have been increased, evictions have been outlawed, and rough sleepers have been housed. This has arguably created the most propitious conditions for forging a new social settlement for many years.
A reform narrative built around the need to provide greater protection from risks so often beyond people’s control, could be deployed to justify a range of specific reforms aimed at building greater security and resilience for individuals and the wider society. Stronger rights at work for non-employees; higher replacement rates for those facing cyclical unemployment; a job guarantee scheme to prevent long-term unemployment; universal childcare; better protections for those in private, rented accommodation; greater access to affordable credit and relief from crippling personal debt; continued increases in the National Living Wage; major surgery to the design and delivery of Universal Credit; and a complete reset on income and employment support for people with disabilities, would all be candidates for fundamental reform.
Even if advocates for change can build a compelling case for, and public consensus in favour of, a new social settlement, major challenges to reform will remain. Most obviously, it requires a government willing to enact those changes. The general election shifted the ideological centre of the Tory parliamentary party, with its successes in the Midlands and the North of England. And Boris Johnson could yet seize the mantle of Tory social reform in the tradition of previous Conservative Prime Ministers Disraeli and Butler. But it would be optimistic in the extreme to count on it. Then there is the fiscal challenge, which grows by the month. The wealthy and large corporations can no doubt contribute more, but reformers will also need to make the case for broadening the tax base, alongside re-directing the proceeds of a more fully employed, productive economy, to foot the bill.
The third theme certain to dominate post-Covid public policy debate is the economy, given the scale of the recession we are now entering. The emergency response by the Treasury and the Bank of England has illustrated the immense capacity of the state to intervene in the economy, where political will or necessity exists. One of the ironies of the last few weeks has been the sight of previously pro small-state, low tax Conservatives wielding extraordinary state power and spending unprecedented sums of public money. The pivotal question is whether this has given Tory Ministers a taste for – and an ideological openness to – economic activism. Whether Boris Johnson embraces this more assertive and proactive role for government in the economy will define his premiership, along with his strategy on the public finances.
At the more micro-level, much will rest on how the corporate and business worlds react to the Covid convulsion. Lockdown poses a major challenge to the UK’s consumer-driven, service-sector model. And business models based on heavy debt, just-in-time supply chains, low stock levels and a hyper-flexible workforce suddenly look vulnerable. There is certainly the possibility that a set of ideas associated with ‘stakeholder capitalism’ could come back in from the cold. This might include those related to company ownership, corporate governance, executive pay, employee voice, vocational training and so on. We will also need interventions to provide work for people where the market is not doing to do so, in order to avoid mass, long-term unemployment, which neither Universal Credit nor fashionable ideas like UBI are designed to do. All this will depend in part on the strategies – and power – of organised labour and the ability of the trade union movement to adapt and respond to these new circumstances.
The final theme where the terms of engagement for public policy are likely to be significantly impacted by Covid-19 is climate change. In reducing traffic levels, improving air quality and forcing down energy consumption, the lockdown provides a tantalising glimpse of a cleaner, greener future. In addition, the Covid response has shown that, when faced with an existential crisis, government can take bold and decisive action, while citizens can rapidly change their lifestyles in dramatic ways.
However, any assertion that the Covid-19 experience will inevitably force decisive action on climate is overly simplistic. The transition to a decarbonised economy, while bringing opportunities, will be harder to navigate when households and governments are financially distressed. After a period when climate had become prominent in our national debate, the pandemic has knocked it off the agenda. And, co-ordinated international action is required in this area which presents a huge challenge in its own right. In this case, the key question may be the extent to which alliances of business, investors, sub-national leaders and citizens can plug the global leadership gap in this area.
Standing back from these issues, the key question for those seeking to analyse and shape public policy in relation to them is whether, how, and to what extent, Covid-19 reshapes discourse on the main policy challenges that need to be addressed, impacts the terrain of ideas competing to respond, and mobilises the forms of agency needed to bring about real change.
In democracies, change is never straightforward or easily achieved. It arises from the contention for competing causes, ideological battles and clashes of power and interests. The scale of the crisis triggered by Covid-19 does not automatically mean that everything is changed, but it creates the conditions in which fundamental change becomes possible. We may be entering one of those unusual historical moments when the settled order is shaken to the core, and the previously impossible or unimaginable become feasible. But none of this will happen automatically. And this leaves a huge role for those interested in reshaping public policy.
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
