No return to free market mayhem

Virgin Atlantic is among the companies who have asking the government for a coronavirus bailout (photo © Richard Humphrey (CC-BY-SA 2.0))

Coronavirus has seen us experience wartime levels of state intervention. Duncan Bowie says this new normal must be a signal for a different society

There has been a dramatic shift in the role of the British state and the attitude of the public towards it over the three months of the Covid-19 crisis. Over the last fifty years, under successive governments, we have seen a continuous intentional change in the balance of power between the state and citizens and corporate bodies – to a smaller state, with a lower tax take up and spending a lower share of the national gross domestic product. An almost universally held view has been “public sector bad, private sector good”, and that tax is bad because it takes money away from individuals and out of the productive economy.  

As in both world wars, and to a lesser extent during the 2008 global financial crisis, Covid-19 has dramatically changed that balance. Not only has the government taken control of the operation of most private sector functions, from companies to shops, but it has in effect nationalised some services (such as the railways, and it has taken at least part control over Transport for London), and is now directly paying millions of private sector workers. It temporarily stopped the private sector housing market and took away the power of private sector landlords to evict their tenants.

The government issued restrictions on individual movement much stricter than the curfews which operated in wartime, with fines for breaches. This has been under a Conservative government which has in the past advocated deregulation, privatisation, contracting out of services and lower taxation. What has also been significant, and perhaps less subject to comment, is that the population of the UK as a whole not only expects the government to get the country out of this crisis – which, to be honest, despite failures in pandemic preparation and NHS resourcing is not primarily of their creation – but expects the state to actually provide them an income until the pandemic is reduced and the overall economy restarts.

This is not just in relation to what can be regarded as the productive economy, but anybody unable to generate an income in their usual way in the current circumstances – so it is not just the producers of aircraft and cars, but estate agents, artists, actors and musicians. We not only have multi-millionaire company owners like Richard Branson seeking bailouts, but homeowners putting their cleaners and gardeners on the government payroll. Even charities can get government money to pay their ‘furloughed’ staff. Yet this package of interventions does not involve state food or petrol rationing (though we had some local rationing of toilet rolls), or any direction of labour. This is where the comparison with the world wars fails: no one furloughed has been forced to go fruit picking, so we are still flying in fruit pickers from Eastern Europe, even if most other long distance travel is restricted.

The state is now viewed as a deus ex machina that can and is expected to solve all our individual problems. The state is seen as something distant, which is now responsible for us, but for which we ourselves bear no responsibility. There is a belief, which follows from the 2008 banking bailout, that the state can just print money – no recognition that there is a long-term cost to all this short-term state funding.

There is also a view that if the state can put all this money in now, why can’t this also be for the longer term – for example, all homeless households should get permanent homes or that all private tenants’ rents should be paid, that everyone should get a state-funded basic income and that all care homes, GP surgeries and dentists should get state-funded PPE, rather forgetting that some of these services are now private profit- (or loss-) making enterprises. There now seems to be a view that not only should government enable private sector profits but that it should cover all private sector losses, whether individual or corporate. Not surprisingly, there is a more balanced perspective that state funding (that is, funding from our tax payments) should carry with it not just public sector regulation but public sector ownership and reinvestment of any surpluses.

This raises the key point that reconstruction cannot be back to normal, if that is perceived as a focus on using public resources to restart the economy to seed-fund what will in effect be private sector gain, driven by market demand and the potential returns on private sector investments, rather than by any national assessment of prioritised needs in terms of a baseline standard of welfare service provision and quality of life for all residents of the UK. We however do need a return to stat- led planning at all spatial levels – the UK, the four nations, the English regions and localities.  

This also raises the issue of whether our lifestyle – in terms of how and where we live and work – need to change. Quality of life and health must be central to all planning and investment decisions. Where resources are limited, they must be directed both spatially, in terms of location within the UK, and to those households who need them most. We know that it is those in the worst housing conditions who have suffered most from the virus and from lockdown, as well as that there have been disproportionately high deaths amongst people from some BAME groups, though we are still not entirely clear why.

We know that workers in some jobs involving close face-to-face contact with large numbers of other people – not just NHS staff and care workers, but bus drivers and taxi drivers – have also had high infection and death rates. We also know that the experience of lockdown has been far worse for people living in small flats than for those in houses with gardens, and that life has been much easier for those able to work from home compared with those who have either been unable to work, or who have had to continue travelling to work. So perhaps we need to think again about what type of residential settlements we plan for and how we plan for future employment patterns – more polycentric development with less concentration of the population in high density urban agglomerations. We are entering a very different future, not just in the UK but across the world. 

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