Comment

For how long can we keep locking down before there’s nothing left?

It sounds harsh, but some way of segregating and protecting the old and vulnerable must urgently be found

Regent Street
Regent Street in London stands empty with shops closed after strict lockdown measures were first introduced in March in an attempt to tackle the coronavirus pandemic Credit: Dan Kitwood/Getty

Crises tend to make or break political leaders, but this one seems destined only to break them. Scarcely any head of state has thus far emerged from the pandemic with any credit – unless it be the ever saintly New Zealand premier, Jacinda Ardern, whose success in dealing with the virus is frankly largely accidental. Happily for her, New Zealand is in the middle of nowhere, making it comparatively easy to insulate from outside infection.

Otherwise, political reputations are tumbling like ninepins. Unprepared, clueless and incompetent – these are just some of the kinder words used to describe our Western leaders over the past six months. As the second wave hits, the criticism grows ever louder.

There is still just about time for Trump to turn things around, but on his increasingly unhinged performance so far, you wouldn’t bet on it. At this stage, Covid is very likely to be his political nemesis. It would be the same for President Macron in France if he similarly had to face the voters next month. Fortunately for him, the French presidential election is still a year-and-a-half away. However badly he might be polling, there is also for now a distinct lack of plausible alternatives.

Here in Britain, Boris Johnson is even luckier with his timing, having managed to win his “stonking majority” just before the crisis hit. Theoretically, then, he’s still got a little over four years to restore his fortunes, by which time the pandemic ought to be long gone, or so we must all hope. Whether it will also be forgotten is another matter. Getting Brexit done, which helped propel him into Number 10, will no longer be an issue, but the little matter of demonstrably making a success of it may still have a way to go. That’s going to be doubly challenging with the economic legacy of the pandemic to deal with.

Perhaps remarkably, Johnson’s polling was impressively high in the initial stages of the pandemic, despite the Government’s late and chaotic response. But lately, his popularity has been wearing thin. In the middle of April, 66pc of respondents to a YouGov poll said that Boris was doing well as Prime Minister. In the latest poll at the end of September, just as new restrictions were starting to bite, this had sunk to just 39pc, with 54pc saying he was doing badly.

There are also signs of growing cut through for Keir Starmer’s forensic style of “constructive opposition”. Together with a number of regional Labour mayors, he has been particularly effective in challenging many of the new restrictions. Repeatedly, the Government has struggled to justify them with hard evidence of need and efficacy.

For now, Johnson doesn’t have to worry too much about Labour. His majority makes the Opposition largely irrelevant. The bigger threat comes instead from his own party, and takes two forms, both potentially quite serious. First is the growing suspicion that Johnson is not up to the job. A crisis as complicated and many faceted as this one requires thoughtful grasp of detail and hard-working professionalism. Instead we see only jocular, faintly flippant and smirky showmanship, loved by some of the party faithful, but frankly not characteristics you would want in someone who is supposed to be getting you out of a hole.

A potentially more potent rebellion comes from the party’s libertarian types, who simply don’t believe in lockdown strategies per se. The irony here is that the more serious the second wave of infections, hospitalisations and deaths, the less potent this form of opposition gets. It is almost as if Johnson needs the crisis to get worse if he is to reinvigorate faith in his own leadership. In any case, for the moment, he remains Prime Minister. There is little immediate chance either of him being dislodged or throwing in the towel.

So we beat on, with the same old confused and economically destructive policy. The August GDP update last week dashed all hopes of a continued, V-shaped recovery, leaving GDP still 9.2pc short of its pre-pandemic level. The rebound of the early summer has seemingly already run out of steam, and with the widespread reimposition of social distancing measures, is now very likely stalling.

That loss of momentum is however very much sector specific. Outside hospitality, entertainment, airlines and events, most businesses have learned to live with Covid restrictions, and operate relatively effectively within them. Assuming schools remain open, and that travel isn’t again banned, there is no reason to believe that the rest of the economy is about to slump back down again. Admittedly, there is not much to look forward to these days, but much of the country has indeed learned to live without fear, as Rishi Sunak, the Chancellor, has urged.

As for the mortgage market, that’s going gangbusters, despite the almost universal belief that house prices are heading for some kind of correction once the stamp duty holiday ends next year. The Prime Minister is keen to keep that going, with an out of the blue suggestion at the Conservative Party virtual conference of bringing back mortgages that require only a 5pc deposit.

The banks, and indeed the Bank of England – which confusingly issued a report last week which significantly increases the risk rate it attaches to mortgage lending, and therefore the amount of capital banks have to put against it – might have something to say about that, given the experience of negative equity in the last two housing market crashes. Unless the Treasury is prepared to further use the public balance sheet to underwrite such mortgages along with everything else, there seems little immediate chance of the idea becoming a reality. From the Treasury, answer comes there none.

Still, the Government can at least expect the banks to be part of the solution to the crisis this time around, unlike last time when they were the major cause of it. With capital buffers restored, and little sign so far of the tsunami of corporate insolvencies widely predicted in the initial stages of the crisis, they have ample scope to support the economy with balance sheet expansion. But for second wave fears, the road to recovery would by now be clear and broad.

Instead, we lurch from one lockdown to the next, threatening permanent structural harm. Too much hope is being vested in the eventual mass immunity of a vaccine, for which there is no guarantee and in any case is still likely to be some distance off.

It beggars belief that six months after the pandemic began, the same old bogey of an overwhelmed health service is still being trotted out to justify the imposition of restrictions. It sounds harsh, I know, but some way of segregating and protecting the old and the vulnerable must urgently be found, so that the rest of the economy can function normally again.

Still, here’s one good thing to have come out of the renewed sense of incarceration; at least we can all look forward to dining alone at Christmas.