The “New Normal” is an ominous phrase, in large part because it has no specific meaning. If one is to believe the newspapers, then the world of the new normality will be a clinical one – a world devoid of spontaneous encounters, bereft of meaningful interaction, and watched from above by states with dramatically expanded surveillance apparatus.
Many economists offer little better in their predictions of 1980s levels of unemployment, or the prospect of hundreds of millions of people in developing economies being pushed back into poverty. A world dominated by distortions of capitalism, social inequality and ineffective monopolistic markets seems to await us, but it’s not the one I want to live in. Yet, in many ways, it is the world we’ve been living in for the past few decades. The opportunity for wide-reaching reform and the revival of liberalism is upon us and we must grasp it.
One such issue we must reconsider is migration. The current pandemic has surely disavowed much of the nation of the notion that we should artificially push down the numbers. Migrants account for many of those currently powering our health and care sector. But to dwell only on the latter would be to play into the narrative of “good” and “bad” immigrants, when no such binary exists. We should use the current crisis to make the case for wholesale immigration, for immigrants as the heart of the engine of human development we will need to rebuild the nation’s economy.
The furlough scheme, meanwhile, has demonstrated the limits of the current welfare system. The 12 or so million jobs enrolled on the scheme represent many that simply won’t exist following the withdrawal of government support. The government would therefore be wise to focus its efforts on individuals rather than jobs, through a Universal Basic Income or Negative Income Tax. Giving everyone a greater certainty of income would allow the peace of mind needed to experiment and innovate in the uncertain post-pandemic world. It may, too, help to alleviate the demand shock that will surely exist even in the absence of government lockdown restrictions.
Much has been said about how the young will be disproportionately impacted by the economic effects of coronavirus. Another area in which younger generations were already disproportionately affected is the housing market, where “generation rent” sets aside huge portions of its income to pay landlords, rather than spending to keep the economy going or saving for their futures. The government should correct this with a liberalisation of the planning rules, particularly with regard to the green belt. Current regulations are preventing the building of many new houses in convenient locations. According to the Adam Smith Institute, building on the 3.7% of London’s green belt closest to train stations would provide a million homes for the strivers of the nation’s capital.
The cleaner air and lack of cars on the road was one of the few silver linings of the lockdown. The need to tackle climate change, however, should make these occurrences more permanent. The sad reality is that we have simply left things too late to rely entirely on the market to prevent climate change. The era when merely correcting neighbourhood effects could constitute enough action is long gone. That’s not to say that such action can’t form part of the process, however. A form of carbon pricing is a necessity if we are to face up our environmental challenges. But so too is government intervention, in the form of reviving our town centres as pedestrianised communities of restaurants and bars, keeping cars out of city centres through congestion charges, and investing in green power and infrastructure.
The fiscal stimulus required to revive the economy post-corona is simply too big an opportunity to miss. We must ensure we retrain people for green jobs, and offer incentives for living greener lifestyles. One such example would be a beefed-up petrol and diesel car scrappage scheme, to accompany a ban on new sales of said cars from 2032. The pandemic has proven that we can do a lot more from home using technology. Corporate and individual innovation has been evident throughout, and this is a positive development. Just as we must return to a world of human contact, we must also recognise when we do not need to travel to meet in person. The latter has clearly been true more of the time than we thought.
You may agree or disagree with my view on what the “new normal” should look like. But my overwhelming point is that it doesn’t have to be bad and it mustn’t be forced on us by government. Instead, we must come together and determine exactly what we want our economy and our society to look like, and what it needs to look like. The new world is ours to define.