Barring the emergence of some terrible new variant, the nation has turned a corner on Covid-19. Boris Johnson has announced a full re-opening in England; the Shadow Health Secretary says we need to learn how to “live well with the virus”.
On the face of it, this is a good news story for a government in desperate need of something to smile about. But a shift towards “post-pandemic politics” holds a new set of dangers for the Conservatives.
Specifically, this is the moment when decisions made in the heat of the emergency, many widely supported at the time, will come under the cold, 20/20 scrutiny of hindsight.
There will be the grand inquiry, of course – at least one. But the initial skirmishes are already underway, and the Treasury’s decision to write off more than £4 billion in debt lost to fraudulent claims on the Covid emergency loans scheme is a case in point.
Rishi Sunak risks a backlash on at least two fronts. First, the sum will be thrown back in his face whenever the Government makes the sort of tough spending or tax decisions he clearly feels are necessary to put the public finances on a sound footing after two years of extraordinary spending.
Second, opponents of rigour in other areas of Treasury policy will seize the precedent. One viral tweet contrasts the energy HMRC puts into chasing tiny tax bills with the Chancellor’s decision; commentators suggest it means the Government should ease up on benefit fraud.
Neither of these follows. And whilst the sums involved might be galling – and the Treasury should definitely explore extra funding for the task force, as tax experts suggest – if £4 billion is the eventual price-tag for the Chancellor’s “bazooka” there can be little doubt that it was a price worth paying.
Cast your mind back to the moment Sunak pledged to do “whatever it takes” to support the economy. The country was in the foothills of the pandemic, and full-fat lockdown was the order of the day.
In those circumstances, the Government had two choices. It could either set up a generous scheme with minimal checks, in order to get the money out as quickly as possible, or it could try and set up a more carefully monitored regime.
Politically speaking, the latter really was impossible. Designing the tests, setting up and staffing the necessary oversight body, and so on would have taken time we simply didn’t have. Legitimate businesses would have gone to the wall in that initial phase, and others would have been caught in an inevitably ill-designed and haphazardly-enforced set of rules and requirements.
The result would have been measured not just in the Government’s poll ratings, but in enterprises shuttered and jobs lost.
Given that there wasn’t the time for a perfect system (even if the State could ever have designed such a thing), it was far better to simply accept a degree of loss to fraud as a cost of doing what had to be done.
Those who argue otherwise are making the perfect the enemy of the good – or more likely, mounting bad-faith attacks on the inevitable consequences of a decision which commanded near-universal support at the time.
Nor are they right to argue (whatever the other merits of each proposal might be) that this decision, made in this very specific context, justifies tolerating systemic laxness in our tax and welfare system.
Such arguments, like those wags who suggested that the Tories could find the magic money tree when they really needed it, fail to make the essential distinction between emergency measures and normal policy.
In fact, the extraordinary levels of borrowing and economic intervention over the past two years are best understood as the fiscal equivalent of lockdown, and few even of those who fully supported lockdown think it should become a normal part of the State’s public-health policy arsenal.
