January 1, 2021

We all failed to see 2020 coming. Coronavirus sent us for six, delivering a triple crisis that challenged our health, economy and politics. It has already left nearly two million dead, more than 80 million infected, the worst financial crisis since the Second World War and a massively expanded state. The collateral damage will be with us for years, if not decades, to come. But when we look ahead to 2021 will the pandemic be the game-changer that some claim it to be?

It’s interesting to look back at debate in the early months of 2020; it was all confident predictions about how Covid-19 was going to change our world — it would usher in the end of globalisation, populism, big cities, individualism, the Anglo-American model and bring about responsible, competent, expert-led government. We all got very excited. More than a few commentators also tried to turn the crisis into a proxy battle, appearing gleeful as the heavy casualties in America and Britain were traced to the actions of ‘right-wing governments’ and contrasting them with the supposedly more successful and enlightened responses in other political systems.

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But look at where we are today; new lockdowns in Austria, Italy, the Netherlands and the UK, noticeably high death rates in Belgium and Spain, an extended lockdown in Germany where cases have soared and death rates have hit a new high and an increase of cases and record deaths in Sweden. As Janan Ganesh points out, and for once I actually agree with him, maybe there is no grand lesson here for the world — no particular political or economic system has consistently outperformed its rivals. Similarly, when we look ahead to geo-politics in 2021 there may not be any seismic change or watershed moment. Maybe we’ll just pick up where we were before the crisis hit.

Coronavirus could more like The Great Accelerator, than The Great Game-Changer; exacerbating existing inequalities and divides that have been on the rise since the 1970s. We already know, for example, that this pandemic is sharpening levels of inequality and divides between the low and high educated, and the workers and professionals. And if you look ahead, then it is not hard to see how politics will be characterised more by continuity than disruption.

Here in Britain, some things will have to change, including how we pay for the mountain of debt left by the crisis. In the past eight months alone, government borrowing has surged to an eye-watering £241 billion while our total debt is over £2 trillion, or 100% of GDP. Rishi Sunak ends this year as the most popular politician in Britain but it is easy to be popular when you are giving away money. In 2021, Johnson and Sunak will likely break their pre-Covid promise not to raise VAT, national insurance and income tax, and will need to carve out an approach to tax that chimes with their wider promise to do more for the ‘have nots’ and less for the ‘haves’. Everybody will feel the pinch and this will bring new challenges to Johnson.

But in other areas much will return to where we were before this crisis arrived. After delivering the Withdrawal Agreement, Brexit trade deal and approving not one but two effective Covid-19 vaccines, Boris Johnson’s government will turn back to its pre-Covid agenda of ‘levelling-up’ the country and defining what ‘Global Britain’ really means. And there will be strong tail-winds. While ‘declinists’ will tell us over and over again that Brexit Britain is in decline, the reality is that most economists share a consensus that we will see a strong economic bounce-back as pent-up demand is released and spending returns. The OECD forecasts that after a fall of GDP of 4.2% in 2020, Britain will witness stronger rates of growth than the Eurozone, at over 4% in 2021 and 2022 — forecasts that were also issued before the approval of the latest Oxford-AstraZeneca vaccine.

And Labour will continue its slow and perhaps painful electoral recovery. Keir Starmer and his party have closed the gap in the polls, since their disastrous defeat. But Labour has not won the popular vote in England since 2001 and there is still little evidence of gains in parts of the country that really matter. This is why a new set of local elections in May, in particular across Metropolitan boroughs in the north and Midlands are key; they bring us the first opportunity to see if a Labour recovery is underway in the Red Wall. Starmer will need to demonstrate major gains if he is to claim that Labour is on track for a return to power but I am sceptical that will happen.

Further north, in Scotland, pressure for a second independence referendum will continue to mount after a strong performance by the SNP at Scottish parliamentary elections. In the latest polls, the SNP holds commanding leads of more than thirty percentage points while over the past three months there has been a clear shift in support for Scottish independence; the latest poll puts support at 52%, opposition at 38% and the undecided at 10%. While a referendum will not arrive in 2021, the campaign to obtain one will intensify and our debate will shift from the fractured the European Union to the fractured United Kingdom.

And what of populism? In some respects, 2020 was a disastrous year for outsiders. Trump lost, Marine Le Pen failed to deliver gains in France, Jair Bolsonaro tanked in the polls and the world turned away from the identity issues that dominated the 2010s back to questions of competence and crisis management — all of which we were told would signal the end of populism and polarisation. But here too there is unlikely to be a radical break from the past.

The pushback to economic and social liberalism remains clearly visible; Trump added another 12 million votes to his tally in 2016, he widened rather than narrowed his base by making striking gains among non-whites and while Biden failed to deliver the ‘blue wave’,  he has also retained Trump-style positions on protectionism and China.

America will gradually and symbolically return to the liberal world order but US-China tensions will remain a prominent feature of geo-politics and I am sceptical that the Democrats will win the rapidly approaching Senate races in Georgia to take control of the Senate, which in turn will dramatically curtail Biden’s capacity to become a truly transformative president.

Meanwhile, last year also saw Law and Justice won in Poland, Bolsonaro eventually recovered in the polls and while Italy’s Matteo Salvini struggled, the even more right-wing Brothers of Italy have risen to enjoy their strongest ratings to date. Two years ago, in National Populism, Roger Eatwell and I argued that national populism would remain entrenched in most Western democracies and, so far, there is little evidence to suggest that we were wrong. Even at the big election in 2021 in Germany, we are likely to see more of the same — a strong result for the established centre-right with perhaps around 10% or less going to the populist right and the Greens remaining centre-right, alongside a more strongly conservative Christian Democrat movement.

And the old challenges that have hampered Europe will once again bubble back to the surface — the explosion of debt, declining prospects in Spain that now seems to be following the Italian model, a recovery that could entrench rather than close economic divergence between north and south, lingering rule-of-law disputes between east and west and a new deal on migration are all likely to see the debate turn back to questions that were asked before the pandemic erupted.

When we face big external shocks it is always tempting to think that they are game-changers and that life as we know it will never be the same again. But look ahead to the next 12 months and we might just find ourselves back in familiar territory, debating many of the questions and issues that occupied our minds before we had heard of coronavirus and were pushed into the Great Lockdown. And I don’t know about you but from where I am sitting that would be just fine. Welcome 2021!