UK Politics: Coronavirus set to overshadow Sunak's first budget

Max Liu
08 March 2020

Sunak will deliver his budget this week

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Brexit delayed? Elections postponed? While everyone else is panic-buying toilet paper Max Liu considers the short and long term political implications of Coronavirus...

"It's possible that the local elections that are slated for May 7 will be delayed. That would involve the London Mayoral Election, which Sadiq Khan is 1.132/15 to win, and could help Labour in the wide council elections."

"When the facts, change I change my mind. What do you do, sir?" So said the economist John Maynard Keynes. The new chancellor of the exchequer Rishi Sunak is no Keynesian but those words may be ringing in his ears as he prepares to deliver his first budget this Wednesday.

Since winning the general election in December, Boris Johnson's government had planned to pump money into the northern constituencies that unexpectedly voted for the Tories. But the coronavirus means the government's immediate priority is to find funds to help limit its spread and meet the challenge of thousands of workers potentially being off sick.

Sunak vague on government plans

Sunak sounded vague and evasive when he said today: "We will provide the NHS with everything it needs to get through this."

When pressed by Andrew Marr, Sunak didn't say whether the government would help businesses meet the cost of sick pay or how it would provide for those members of Britain's gig economy who find themselves off work without pay.

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What, for example, would the notoriously dysfunctional universal credit system do for them? Sunak, who only last month became the second most powerful figure in government and is the favourite on the Exchange to be the next Tory leader, had no answer.

Brexit delayed? Elections postponed?

There will be political implications of the coronavirus which has taken governments across the world by surprise. When the Dow took a record plunge last week, some analysts said the virus could shake the economy on the scale of the global financial crisis of 2008 - an event that's subsequently been blamed for austerity, Brexit and the rise of authoritarian demagogues.

Sunak argued that it was because successive Tory governments had been fiscally responsible that they could now meet the challenges of the virus. His opponents, on the other hand, say the virus will expose the threadbare state of Britain's public services after a decade of austerity.

What about Brexit? If the coronavirus reaches pandemic levels it could delay the Brexit trade talks which would infuriate the Brexiteers. Conversely, perhaps Britain will realise isolation isn't much fun and you should now take the 5/1 available on Brexit being reversed by 2026.

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More likely is that the local elections that are slated for May 7 will be postponed. That would involve the London Mayoral Election, which Sadiq Khan is 1.132/15 to win, and it could also help Labour in other ways.

By then Keir Starmer, who's 1.071/14 to be unveiled as their new leader in four weeks, will be in charge, along with his deputy Angela Rayner 1.031/33. They're planning to hit the ground running in opposition and a local election delay would give them more time to show the electorate what they're about and could help them win more of the 118 councils that are up for grabs this year.

Coronavirus to change the political weather?

The truth is that nobody knows what's going to happen with the coronavirus which is what makes it frightening for the public and difficult for the government.

Governments in other parts of the world have more experience of contending with unforeseen seismic events but that doesn't stop them getting it wrong.

It's only a few months, for example, since Australian PM Scott Morrison was castigated for his mishandling of the wild fires that swept part of his country. His government looks unlikely to recover in time for the next Australian Federal Election.

Further back, it was George W. Bush's pathetic response to Hurricane Katrina in 2005 - arguably more so than the Iraq war - that finally destroyed his popularity.

In both cases, these events changed the political weather less than a year after said leaders had won elections.

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