Boris is at the mercy of the money markets and the Macronavirus

Rarely has a government been so much at the mercy of events outside its control. Will there be a vaccine? The answer is swinging towards “yes.” What about a deal with the EU? No-one knows. The Macronavirus is not under control, and no French politician ever won many votes by being favourable to Britain. Equally, British Francophilia has seen better times. These days, a lot of those acquainted with Sidney’s charming poem which includes “that sweet enemy France” are inclined to drop the “sweet.” If there is no deal and Boris Johnson could blame French intransigence, this would help to reduce the political damage.

In view of all the uncertainty, it might seem foolish to look further ahead than the latest news bulletin. Forget “a week is a long time in politics.” A single day can bring bouleversements, in which the hitherto unthinkable becomes the new common-place. Even so, we have to prepare for whichever version of normality emerges in a few months’ time. The government will face political, economic and moral challenges, all related, and its ability – or failure – to rise to them will have a decisive impact on this country’s fortunes – and indeed on the UK’s very survival.

Leaving the Scottish degringolade for another occasion, let us start with morals. In that regard, the campaign against Covid has had two malign consequences. First, the furlough has accustomed large numbers of people to being paid for not working. The end of this programme is bound to lead to withdrawal symptoms. Was it really necessary for the Chancellor to extend the scheme so far into next year? The quicker it ends, the better for the nation’s moral fibre. Second, a lot of people did find employment in a new industry spawned by Covid: bossing other people about. Too many of them enjoyed it too much. Some restrictions were necessary, though much more could have been left to common-sense and stoicism – and the infantilising tone of much government propaganda has been repulsive. But a number of illusions about one’s fellow-countrymen have not survived. There have been too many reports of curtain-twitching. If, God forbid, malign authorities had ever tried to establish a Stasi, they would have found it depressingly easy to do so.

One part of the United Kingdom was occupied by the Nazis: the Channel Isles. It has generally been assumed that the locals took their cue from the Dame of Sark, that beacon of light in the midst of occupation and darkness. There were a few jerry-bags; those who were excessively enthusiastic in their horizontal collaboration. After the war, they were firmly advised to resettle elsewhere, while everyone else rejoiced. But recent scholarship has uncovered a less reassuring story, in which the Germans found plenty of cooperation. In the post-war years, that was quickly forgotten. Let us hope that we can also forget the virus-induced little Hitlerism.

The economic challenges also have a moral aspect, which arises from the unprecedented level of borrowing. Imagine if Margaret Thatcher had been told that under a Conservative government, the Bank of England had effectively printed almost a trillion pounds. Imagine every Tory’s reaction if Jeremy Corbyn had managed one tenth of that. Thatcher absorbed her views on debt in her father’s grocery shop. Mortgages, yes: any other form of borrowing: a resounding “no.” I once heard her say that she had actually been sent a credit card. “What did you do with it?” I enquired. She replied with great emphasis, shuddering as she did so: “I cut it up.” It sounded as if she could not imagine a more indecent proposal.

Although there is an inevitable gap between Grantham economics and the G7 version, we are on a journey into the unknown. The route-map seems to be in the hands of modern monetary theory, which is relaxed about borrowing and printing as long as it creates jobs and output. So does this mean that a generation of prudent sceptics have been refuted, and that there is such a thing as a free lunch? Or will the bill mount until it is eventually presented, in the form of higher inflation, higher interest rates and no economic growth? As far as one can tell, nobody knows. We can surely agree that this cannot go on for ever – but how long does that give us?

There is one obvious conclusion. Everything depends on economic growth. The nearer we will find ourselves to a V-shaped recovery, the better. In some areas, however, the ascent will not be so rapid – if indeed there is an ascent. The high street has its problems, which cannot all be blamed on Sir Philip Green. It is an irony that he runs Arcadia. It is hard to think of a less appropriate name for a venture under his control. To be fair to the man, he does not express political views, which is just as well. His advocacy would be disastrous for any cause he espoused, including free enterprise.

Shopping as we have known it would be under threat irrespective of his fortunes. After 2003, it took seventeen years for on-line shopping to capture twenty-five percent of the market. It required about seventeen weeks to increase that to sixty per cent. That will probably fall, but not all the way back. A lot of low-grade commercial property will also become redundant and again, jobs will be lost. Some of the empty shops and offices could be converted for residential use, which would help to alleviate the housing shortage. Even so, former office workers and shop assistants may find little demand for their services, especially if they are middle-aged. This all needs thought, now. Answers may be harder to find.

Even if the outcomes are favourable, there will still be a fiscal problem. For the economy to return to health, the growth rate ought to be higher than the annual addition to the public sector borrowing requirement. In the longer term, much higher, while interest rates gradually rise; money ought to have a price. In the short term, Labour leader Sir Keir Starmer will no doubt be advocating fiscal tightening at the expense of the better-off. Conservatives need to be ready to counter that and make the case for low taxes as an engine of growth. That is also a moral argument. As always with moral issues, Boris Johnson will need help.

Yet there is one way in which he could help himself. Even as the season of jollity approaches, vast numbers of parents’ pleasure is over-shadowed by anxiety. What is to happen to their children’s exams? As matters stand, they must look to reassurance from Gavin Williamson, who last week announced that next year exams will be made easier in several ways.

In the 1890s, consoling a friend who had not been promoted to the Cabinet, Sir Edward Grey wrote: “Cabinets, if let to have their way, oscillate between mediocrity and meanness.” That was unfair to the two great Cabinet-makers of the day, Gladstone and Salisbury. It is also unfair to Williamson, who is not guilty of meanness. But mediocrity? That is a huge understatement. By retaining him in office, Boris Johnson is displaying his contempt for millions of parents and pupils. With all the other difficulties he faces, why is the PM determined to inflict gratuitous and enduring electoral problems for himself and his party?