Neil O’Brien: Lessons we can learn from fast-growing countries to help us to grow faster

8 Mar

Neil O’Brien is co-Chairman of the Conservative Party’s Policy Board, and is MP for Harborough.

Here’s a striking thing: several countries which suffered decades of communism are now richer than large parts of the UK. In 2018, the GDP per head of Yorkshire, Northern Ireland and the East Midlands (where I’m writing from) were all below Slovenia. Wales and the North East were lower: below Portugal, Estonia and Lithuania. All are now poorer than the old East Germany.

Radical change is needed to claw our way back into the top economic league. And unless we raise growth we won’t escape from demographic trends putting upward pressure on taxes. If you look at countries that have enjoyed rapid growth, they have in common a conscious drive to increase their knowledge, investment and technology.

Take the east Asian countries. Japan, Korea, Taiwan and now China, all followed the same playbook and saw dramatic growth.

Between 1945 and 1970 Japan went from a 20 per vent of the GDP per person of the US to two thirds, rising to 85 per cent by the late 80s. When I was born GDP per person in Korea was a quarter of the UK level. Now they are roughly the same. To have seen as much economic growth as a Korean pensioner has in their lifetime, a British pensioner would have to have been born in the reign of George III.

All four invested heavily in bringing new technologies to the country. Through a mix of government support for new industries and control over the financial system they supported firms to enter new higher tech industries, and soak up the inevitable losses as they learned on the job. For example, TSMC, now the world’s leading chipmaker, was a originally part owned by the Taiwanese government. Likewise Korea’s POSCO, now one of the world’s leading steelmakers.

But unlike many poor countries, they used internal competition between firms and global markets to discipline such subsidies. Companies that grew the national knowledge base and proved capable of export success got subsidies, tax breaks, free land and infrastructure; those that failed were ruthlessly culled (the opposite of what we did with British Leyland).

Industry ministries like MITI in Japan systematically researched and plotted the conquest of one industry after another. China’s NDRC and “Made in China 2025” are similar today. Taiwan created a huge science park and established consortiums of firms to share research, development and knowledge.

Various kinds of regulations and incentives encouraged sky-high rates of investment: even after easing off a lot Japan invests about 25 per cent GDP each year and Korea 30 per cent, compared to 17 per cent in the UK. All four went through periods of importing, copying or frankly ripping off western technologies.

Or if that seems too distant, take an example closer to home. Since 1990 average wages in Ireland went from being 5-12 per cent lower than the UK to being 7-15 per cent higher, depending how you measure it. Ireland attracted four times more inward investment than the UK relative to the size of its economy. Those foreign-owned firms have higher productivity: employing 22 per cent of people but accounting for 57 per cent of value added and 70 per cent R&D investment.

Some recent growth has been driven by highly specific and aggressive tax policies. But the seeds of Ireland’s growth were sown in earlier decades, when Ireland opened up to foreign direct investment and introduced a zero tax rate for manufacturing exporters. From the mid 80’s, Ireland specifically targetted investments from higher tech firms: Microsoft arrived in 1985, Intel arrived in 1989, Amazon, Bell Labs, MSD, Google, Twitter and Facebook in the 90’s and 00’s.

The Irish Development Agency operates a sort of concierge service for inward investors, and recent court cases like that brought by the European Commission regarding Apple show how far Ireland has been prepared to go to attract leading tech firms.

What would it mean to learn from these fast-growing countries today?

First, attracting firms with leading knowhow. We’ve done it before: Mrs Thatcher wooed Nissan to Sunderland with tax breaks. Although evidence suggests previous tax breaks increased foreign investment into poorer parts of Britain, we gradually phased them out, only partly due to EU rules. So the creation of the new Office for Investment is a good start.

Second, improving our innovation-industrial system. Total investment in R&D in the UK is just way too low. The UK invested 1.7 per cent GDP on R&D in 2018, China 2.1 per cent, the US 2.8 per cent, Germany 3.1 per cent, Sweden and Japan 3.3 per cent, South Korea 4.5 per cent and Israel 4.9 per cent. Across the world there’s a clear correlation between government investment and business investment.

However, government investment is more geared towards prompting business investment in some countries. We’re now growing government investment in R&D after decades of neglect, but we must also make it more business-focused. Government should implement the proposals set out in a recent NESTA report to support innovation in poorer parts of the UK.

Third, we need to bring the same focus to manufacturing and tech policy that we’ve had for decades on financial services. We have a city minister, and have quite rightly intervened and changed the tax system to promote financial services, because finance has high wages and productivity growth.

But so do manufacturing and IT. Between 1998 and 2018 output per hour grew £20.60 in manufacturing and £22.70 in IT, compared to £11.90 in leisure, £11.50 in retail, £9.50 in admin support services and £7.20 in accommodation.

Outside London, weekly pay in manufacturing is nearly a quarter higher than the economy as a whole. However, over recent decades poorer parts the UK have seen employment dramatically shifting out of manufacturing, and into these slower-growing local services. Though this holds down unemployment, it represents a sort of economic Dunkirk. The pace of this shift has dramatically slowed since 2010, but not been reversed.

Fourth, we need to address the UK’s longstanding low rates of physical investment. As the excellent Plan for Growth published last week noted: “The UK has a lower proportion of innovating firms overall than other advanced economies and weaker business investment”.

One cause of this is that Britain has had the most miserly tax allowances for investment in the G20. So the “super deduction” unveiled by Rishi Sunak last week is a huge step in the right direction. It should boost investment everywhere, but particularly in poorer places where there is more manufacturing.

Last but not least, a lesson from the high growth countries is about making sure that finance serves growth, rather than itself.

Again, the budget saw steps in the right direction. The Hill Review will enable dual class shares, which tech firms (like Google, Facebook, Lyft, Pintrest etc) increasingly use to offset market pressures for short termism. The new Infrastructure Bank in Leeds will catalyse private infrastructure investment, while further extensions of the British Business Bank will support lending and equity for growing companies (it is gradually filling the hole where 3i used to be).

The next challenge is to unlock more institutional investment into venture capital. Sunak has set in train a review of the EU-imposed Solvency II regulations for insurers. Shifting even a small sliver of such vast institutional cashpiles out of gilts and into growth enhancing venture capital could be transformative for growing businesses. There’s also arguments for reviewing similar rules around pensions too.

Making Britain into a tiger economy is a daunting challenge – particularly its less prosperous parts. But the challenges facing other countries at different times have been at least as daunting. If we don’t want a future of ever higher taxes and slow growth, we simply have to make it happen.

Richard Holden: We shouldn’t try to win a spending arms race with Labour in this Budget – which we would lose anyway

1 Mar

Fight Fitness Guru, Consett, Co. Durham

During the last fortnight, the white wasteland of frozen fields has given way to the flora of spring in County Durham.  The thaw in the land of the Prince Bishops is being met with a broader feeling in the towns and villages that spring is on the way.  With 20,000,000 vaccinations done and accelerating, as well as the Prime Minister’s roadmap providing clarity for the future, there is a real feeling that the tide is turning.

This week’s Budget must be another step along that road.  However, with so many competing concerns it will be a difficult balance to strike.  To get it right, it’s going to be essential to zoom out and look to where we want to be in a few years’ time.

Our economy has taken a pounding because of Covid-19.  Three hundred billion pounds in extra spending and support, paying people’s wages through furlough and supporting jobs and businesses has been provided.

Three hundred billion pounds extra: that is wartime levels of additional expenditure. For context, it is more than twice the size of the NHS budget annually. It’s an extra £4,500 for every man woman and child in the UK, or about £12,000 for every income-taxpayer in extra spending: money that’s had to be borrowed.

The support has been colossal and necessary. It has protected businesses and jobs and crucially will enable our economy to bounce back as quickly as it can. But this backing wouldn’t have been possible if the Government hadn’t taken the necessary decisions to keep spending under control during the last few years.

Colloquially, this point is made frequently by my constituents, along the lines of: “I’m glad it was you lot in and not Labour. If they’d been in ,God knows what would have happened.”

Which takes me to the political.  One of the biggest gateways to so-called “Blue Wall” voters switching from Labour to Conservative was Jeremy Corbyn. But this wasn’t just because of the terrorist sympathising and antisemitism. Or Keir Starmer’s policy of betraying democracy over Brexit. It was also because of Labour’s economic credibility.

People stopped listening to Labour’s promises when they became increasingly outlandish.  Remember them? Free broadband for all, give WASPI women £30,000 each, cancel student debt and make university education taxpayer-funded. The list went on – all with no plan to pay for it: it was fantasy economics that lacked basic credibility.

This is where we Conservatives now need to be careful, and why Rishi Sunak needs to tread a fine line. We cannot, nor should we wish to, win an arms race with Labour over who can spend more taxpayers’ cash.

We’ve not spent the long, hard yards of the last decade, undoing the catastrophic position Labour left in 2010, to let that credibility go. The reason we’ve been able to support the country through the global pandemic is because we’d had credible spending plans for the last decade. The reason Labour couldn’t win in 2010 is because Labour believed its own hubris about having ‘abolished boom and bust’ and, to nab a much-loved phrase from George Osborne, “failed to fix the roof while the sun was shining.” And the result was the famous note from Liam Byrne, then Chief Secretary to the Treasury: “there is no money left.”

Given such an analysis of where we are, then: what’s next? The budget must focus on three things:

  • Recovery. Allowing the country, especially our hardest hit sectors to bounce back from Covid – and in doing so avoid a massive spike in unemployment.  This week, I led 68 Conservative backbenchers in writing to the Chancellor about support for pubs (massive employers of young people) via keeping beer duty down. It’s vital that he also allows our high streets breathing space regarding business rates. And for families in constituencies like mine, where for so many a car is essential, fuel duty rises, which Conservatives have found hard against for a decade, need to be avoided.
  • Delivery. Keep building towards our key manifesto commitments on public services: more police, more nurses, crucial infrastructure and deliver on the levelling up promise that was made.
  • Credibility. Long-term economic stability with borrowing under control to allow us to keep our debt – and crucially our debt interest payments – under control.  We can’t just hope that interest rates stay this low forever: they won’t. Only a balanced plan will allow the Government the space to deliver on the first two objectives of recovery and delivery.

It’s a tall order, and the Chancellor needs to be clear, honest, and fair in what he spells out. Those who’ve profited during the pandemic and those with the broadest shoulders should take the lion’s share of slack as we now deal with the consequences of it.

As for Keir “Goldilocks” Starmer – naturally, nothing will be ‘just right’.  But he won’t come up with any other real proposals, either. He’s opposed to anything that will raise revenue, but Labour MPs will doubtless demand more spending.  The party is all over the place, with a front bench hopelessly out of its depth, and a broader one so divided as to the way forward that it’s hardly a surprise Sir Keir is unable to get them to agree on anything but to abstain.

So Labour’s economic credibility will remain in tatters. We need ours to remain strong.

This spring in North West Durham and across the “blue wall”, let’s ensure that the growth we see is built to last. Unsustainable borrowing might be Labour’s answer, but it can’t be ours. Without doubt, at some point, winter will come again.

And when it does, we’ll need to respond to it from a position of strength with flexibility – as we have this time.  The electorate will not forgive us is we don’t ensure long-term credibility. Without it we put both a sustainable recovery from the global Coronavirus pandemic and delivery of our manifesto in jeopardy.

Perhaps the simplest way of putting it on the Budget is: it’s all about economic credibility, stupid. Because come 2024, it certainly will be.

Garvan Walshe: We can be sure that those who have been vaccinated won’t die of Covid. So the case for lockdowns is vanishing fast.

18 Feb

Garvan Walshe is a former National and International Security Policy Adviser to the Conservative Party.

Having detected three cases of Covid–19, Melbourne has been put into lockdown. The European Centre for Disease Control suggests it might have to be maintained until the summer. Germany is getting increasingly jumpy about new variants, despite never exceeding 300 cases per 100,000 people.

Spurred by vaccine delays – particularly acute thanks to the European Commision’s utter mess of procurment – a narrative is taking hold. It states that the vaccines are ineffective against new variants, and could be ineffective against variants yet to emerge. What is needed, the argument goes, is to prevent the circulation of the virus, and therefore the chance that these variants could ever emerge.

We know, of course that for the elderly, and for those with co-morbidities, Covid is lethal. In old and fat Western societies, these can easily be millions of people. For the rest of us, it, with a few exceptions, is not unlike other afflictions: it ranges from utterly harmless to deeply unpleasant – sometimes with long-term effects. We don’t shut society down to eliminate these in the case of other diseases.

For the last year, most of these populations have been deprived of their freedom. They have sacrificed their ability to pursue their normal life and exist as social beings in order to protect the vulnerable in society. Perhaps the introverted don’t mind do much: the other day I asked a friend, a writer of scholarly books who lives in America, how he was coping, and he replied “since I’m a hermit, I’ve nothing to complain about”.

But some of us like company, and have been hard hit. And since in our open societies people tend to gravitate to jobs that suit them, the inequality is sharpened.

Strict, long confinements like France’s and Belgium’s are the toughest to bear. In Spain, by contrast, cafes and restaurants have usually remained open, if for fewer hours. People with secure jobs in the public sector will come out of this pandemic with higher savings ,because there’s nothing to spend money on.

But if you run a small business, the difficulty in meeting people makes finding new clients extremely hard, even if you’re not in a sector hit by restrictions. It’s worst of all for workers in hospitality and travel – hugely improtant in sunny southern Europe.

The mental health effects of enforced solitude are only slightly leavened by our knowledge that everybody else is going through the same thing. Thankfully, Spanish and Italian authorities have been less draconian this time, and don’t restrict people from walking outside.

That’s not the case in Paris, where you are formally limited to staying within a kilometre of your home. It goes without saying that it helps to be richer: self-isolating in a cramped flatshare with unsympathetic housemates is much more difficult than in a spacious family home with a garden. For people trapped in abusive relationships, it’s a living hell.

It’s one thing to endure all this in order to prevent people dying, and for a relatively short period of time; quite another because something could happen that might return us to this situation. Our nerves are already wearing thin, capital running low and reserves of hope becoming exhausted.

As the most basic level, the aggregate effect of vaccination is to reduce the number of people susceptible to the virus. So what would happen if restrictions were lifted entirely once the vulnerable were vaccinated?

If 80 per cent of the vulnerable are vaccinated, instead of 10–15 per cent of the population being at serious risk, then two to three per cent are.  If their infection fatality rate is five per cent, they are all infected, and vaccination is 70 per cent effective, that would result in 0.2 per cent death rate – or around 90,000–120,000 deaths in the UK.

But in reality, their death and serious illness numbers would be considerably lower than that. For a start, they would not all be infected. Though vaccination is at least 70 per cent effective against infection, it is 100 per cent effective against serious illness and death: this is true even for the variants. We can be sure that anyone who has been vaccinated won’t die of Covid.

Indeed, evidence is now emerging that vaccination reduces transmissibility as well as severity of infection: this is good in itself, and also because it reduces the number of copies of the virus that are capable of generating mutations, and therefore the likelihood of more troublesome variants emerging.

Finally, with good surveillance of infection strains, we will have time to adapt the vaccine to variants that emerge. This is because the maths of exponential growth leads to an explosion, but only after a phase of slow expansion. That phase, which lasts several months with Covid, is enough time to refine vaccines, provided the mutations are detected early.

This changes the calculation that justified the earlier lockdowns. Last year, Imperial College’s modelling calculated that 550,000 people could die, and so justified the extreme restrictions that were imposed.

As the threat recedes, reopening should not be an all or nothing affair. Measures that don’t cost very much, such as tests before international travel, masks on public transport, working from home where possible, limitations on capacity for cinemas and theatres, bans on large events where superspreading can occur, and so on, should continue for longer.

But basic restrictions on seeing our fellow human beings, particularly outside, and on people who make their living serving food and drink while we do so need to be among the first to go.

Timing is critical, of course, because vaccinations take a few weeks before they generate strong immunity, but their effects can be tested by observing the number of more severe cases and hospitalisations. The dramatic success of Israel’s vaccination programme has been overshadowed by the ultra-Orthodox community’s refusal to take part in even basic social distancing but, even there, the make-up of hospitalisations has changed. As vaccines are distributed, the proportion of severe cases will go down, and pressure on hospitals will ease, allowing more opening up. This – not the mere fact of vaccines being administered, nor the complete elimination of Covid cases – is the essential metric.

Actual eradication of viruses is extremely difficult, and seems only to have been achieved with smallpox. Covid will stay endemic and mutate in the world population. However, that’s not as scary as it sounds. The virus only cares about replicating and finding new hosts. Mutations that help it spread harmlessly are much more useful to Covid than the ones that kill us.

As long as most of us are exposed to it while young, like the other coronaviruses that circulate and cause colds, it won’t cause a public health crisis. That, not zero-covid, is an outcome that we, and the virus can both live with.

Ryan Bourne: The lifting of lockdown. Yes to prudence but no to pessimism. The projections of these gloomy scientists seem absurd.

16 Feb

Ryan Bourne is the author of Economics In One Virus, a forthcoming book available for pre-order on Amazon UK. 

As Boris Johnson’s February 22 “roadmap out of lockdown” day draws closer, the Prime Minister faces sharply conflicting advice. The backbench Covid recovery group (CRG) demands that schools return on March 8, and that all lockdown restrictions are lifted by April’s end.

Scientists and Covid-19 modelers from Warwick University and Imperial College, on the other hand, say a gradual lifting of restrictions from March through July would see between 83,000 and 150,000 people perishing from a massive fourth wave death spike. They recommend “non-pharmaceutical interventions” remain intact through summer.

Who is right? Given what we know, the politicians appear slightly too bullish. The modelers, on the other hand, seem ridiculously pessimistic. But a great deal of uncertainty remains and value judgments abound.

Committing to the CRG’s timetable would leave the Prime Minister a hostage to disappointment if first vaccine doses prove less efficacious against death than widely believed. Precautionary prudence demands we wait to see clear trends in the data before delivering major policy change. Especially because a release, amplified by its signal, will inevitably raise the prevalence of the disease over time, including among those still susceptible who would be vaccinated soon.

Looking at the collapse of children’s infections during lockdowns suggests that school closures may have had a large impact on disease prevalence. So here, in particular, I’d be more cautious as first doses continue to be administered to groups 1-9. Yes, the societal damage of lost schooling is enormous. But is re-opening them entirely in early March, rather than a month or so later when prevalence is much lower, really so crucial to life chances, on the margin, to risk the lives of those for whom vaccinations will occur within weeks?

This is not to say that targeted relaxations cannot begin. Outdoor activity, certain sports, and indoor retail could be green-lighted relatively safely, with the usual social distancing protocols and stronger guidance on ventilation. If schools can do rapid surveillance testing, we could have targeted closures only if multiple cases arise. In the depressing absence of that, localised returns in rural low disease prevalence areas seems reasonable. But until the high first dose efficacy against death or severe disease is confirmed and we’ve vaccinated more people, I’d probably opt for slightly more caution.

For all that I might quibble with the CRG on timing, they appear to understand the coming trade-offs better than certain scientists. Pretty soon, almost all over-70s will have been vaccinated once. These demographics make up 88 per cent of deaths to date. Vaccinations should therefore slash deaths rates observably in March, in turn reducing lockdowns’ benefits.

Hospitalisations will prove stickier, because of the large numbers of middle-aged people susceptible to severe disease. The capacity of the hospital system will remain a binding constraint, hence why everyone is advocating a glidepath to normalisation, rather than a “big bang” reopening.

That said, the modelers’ pessimism for even gradual relaxations is jarring. The Warwick model predicts 2,000 deaths per day in August if we “fully reopen” by July, even if 95 per cent of care home residents and 85 percent of over 50s are vaccinated. That would mean more deaths this summer than the pandemic to date. Imperial’s model assumes an 85 per cent general population vaccine take-up, but similarly predicts 130,800 more deaths even if vaccines are administered at a sustained rate of three million per week.

The logic behind these shocking figures is that if 85 per cent of people get a first dose which is, say, 70 per cent effective against symptomatic disease, then 40.5 per cent of people remain “at risk.” Presuming normal Covid-19 death risks apply to those with symptomatic infection implies lots of people still susceptible to death. On the path to everyone getting vaccinated, then, they believe a gradual release of restrictions will see an increasingly unmitigated spread that kills many, even accounting for the higher efficacy Pfizer vaccine and second doses.

Yet these assumptions seem absurd. Vaccine take-up rates have been higher so far. Official data for England through 7 February suggests 93.5 per cent of those eligible in care homes have been jabbed once, as have 91 per cent of over 80s, 96 per cent of 75-79s, and 74 per cent of 70-74s already. The modeling, meanwhile, seems to ignore entirely the evidence that vaccines might mitigate against severe disease or death, even among those vaccinated who still catch Covid-19. If confirmed in data, that alone would invalidate these results.

What’s more, modelling restriction relaxation as if this is synonymous with unmitigated spread seems misguided. Those in vulnerable groups who cannot take vaccines will surely remain cautious. In fact, they would probably be even more careful in the knowledge others are mixing more. A host of voluntary social distancing, mask-wearing, and an ongoing preference for outdoor activity will surely remain for many younger people too ,as they seek to avoid disease in spring and summer before being vaccinated or boosted. Releasing government mandates, in other words, won’t return us to “normal” behaviour.

But even if we did a lot of normalisation, lockdown-like measures would still be disproportionate against the end risks. If severe disease and death rates will indeed plunge after one dose, the value of the health benefits of population-wide restrictions fall dramatically relative to their extraordinary costs too.

Some scientists advising Johnson use banalities such as “the lower the cases can get, the better.” But the idea that nationwide restrictions remain the most cost-effective policy in a world where the overall fatality and severe disease risks are low, and highly concentrated in a tiny slither of the population, is clearly absurd.

Once priority groups have had their vaccines, the Great Barrington Declaration will be essentially correct: “focused protection” for those still vulnerable will be the order of the day.  This will be all the more feasible given the smaller number of people still at risk. For a much lower social cost than lockdowns, we could send these people a healthy supply of N-95 masks, indoor ventilation machines, a year’s worth of rapid testing kits for any guests, and have taxpayers finance carer networks that minimize disease-spreading risks for them.

Such measures will obviously be far cheaper in mitigating the remaining risks than imposing massive restrictions on everyone indefinitely. And, of course, ongoing surveillance will continue to monitor new mutations and local clusters, just as many businesses will also maintain mask requirements that mitigate risks for vulnerable patrons.

What scientists must acknowledge, then, is that the same logic that said lockdowns’ benefits were huge when vaccinations were imminent says they could be tiny once vulnerable people are protected. If first dose efficacy proves as strong as we think, the Prime Minister will have to break with those overly cautious scientists who fail to think about the marginal costs and benefits of lockdowns as vaccinations proceed.

Neil O’Brien: Imperfect vaccines, new variants, domestic mutations. Why there must be no rush out of lockdown.

8 Feb

Neil O’Brien is co-Chairman of the Conservative Party’s Policy Board, and is MP for Harborough.

At last, the happy ending.  As EU politicians squabble, we’re vaccinating faster than anywhere else in Europe. The Church of England is allowing cathedrals to be used as vaccination centres, and the footage of orderly queues in Salisbury and Lichfield made me feel like we were in the happy ending of Powell and Pressburger’s patriotic war movie, A Canterbury Tale.

But whenever a movie has a happy ending, I worry someone will make an awful sequel: 2020 the revenge. As the Prime Minister said, alluding to The Great Escape, it would be tragic to “tangle ourselves in the last barbed wire” just as we escape from the pandemic.

He’s right. Ministers face two uncertainties.

The first: how fast we can go in opening up without triggering an upsurge in conventional Covid.

The second: how to manage the risk of new, vaccine-resistant Covid strains being imported – or equally importantly, developing here.

Armour with holes in

Clearly, we can’t just open everything tomorrow. Until mid-February we’re vaccinating the over 70s. But half of Covid patients in intensive care are under 60. Even once we vaccinate younger groups, it takes up to three weeks to fully kick in.

And the vaccination programme is a suit of armour with holes in. Some older people won’t get jabbed, and no vaccine is 100 per cent effective. The Oxford vaccine showed a 59.5 per cebt reduction in the symptomatic cases in clinical trials. A more recent paper suggested a 67 per cent reduction.

Currently, older people are protected not just by growing vaccination rates, but national lockdown and their very high levels of social distancing. Only over time, as we open up, will we really find out how big the holes in our armour are. And we don’t yet know how long we’ll be in this tricky phase between vaccinating the most vulnerable, and getting to the full benefits of herd immunity.

We need to pace ourselves. We don’t want to go for a big bang reopening only to trigger a new wave and be forced backwards. In the coming weeks we’ll start to fully reopen schools – quite rightly – as the first step back to normality. Reopening schools will increase virus transmission. The uncertainty is by how much.

A study in Nature looked found closing educational settings was the second most effective intervention to reduce transmission. A study in The Lancet found school closures cut transmission. A study from the US showed statewide school closures reduced new cases. In December SAGE concluded that “overall, accumulating evidence is consistent with increased transmission occurring amongst school children when schools are open, particularly in children of secondary school age (high confidence)”.

The Nature paper found similar effects for both primary and secondary schools, and the number of school based outbreaks in the UK is similar for both, though ONS data (about to be updated) suggested older children were much more likely to be exposed to the virus. There’s options about how we reopen in areas where rates remain high: primary and secondary; different rotas or protective measures – there are lots of choices if needed.

Given the uncertainty about the effect of schools reopening, we should allow time between opening one thing (schools) and the next, so we can judge their effects.

It’s time for Burkean conservatism: As Burke wrote: “By a slow but well-sustained progress, the effect of each step is watched; the good or ill success of the first, gives light to us in the second; and so, from light to light, we are conducted with safety through the whole series”.

New variants

The harder question is how to manage the risk from new variants. We’re seeing lots of them around the world, but also within the UK. There was the Kent variant, now there’s Bristol and Liverpool variants. A variant from South Africa sadly made its way here, but one from Brazil seemingly hasn’t.

How big is the risk from vaccine-evading variants?  Evidence is emerging. The Kent variant has a less dangerous N501Y mutation, which makes it more infectious, but doesn’t let it dodge vaccines.

The South African variant has that plus the E484K mutation, which may reduce vaccine efficacy.

The Financial Times reported last week that in clinical trials Novavax’s new vaccine was found to be 89 per cent effective in its UK trial (where the E484K mutation is rare), but had just 49 per cent overall efficacy in South Africa.  Lab evidence also suggests it may make the holes in our armour much bigger. The paper also recently reported that the South African strain reduced the effectiveness of the Oxford / AstraZeneca strain too.

Concerningly, the Liverpool variant adds the E484K mutation to “old” Covid, while the Bristol variant combines the Kent variant with the E484K mutation, making it like a home grown version of the South African strain. We’re still learning how coronaviruses evolve to dodge immunityhow they do it, and how we should respond.

I support the measures the government is taking to tighten our borders for starters: requiring negative tests pre-travel, hotel quarantine from risky countries, making sure travellers do isolate. It’s a monumental task to set these systems up. But worth it. Covid is likely to bounce around the world mutating for some time. Once in place, we can steadily toughen these border controls as appropriate.

The prize of us getting back to normal life in the UK seems worth the price of inconvenience for travellers: if you hate lockdowns, you should back the toughening of borders.

Sadly, managing the risk from new variants isn’t only about borders, because we’re seeing new variants originating in the UK. As vaccinations rates go up, the evolutionary incentive to mutate and dodge them increases. It’s like anti-microbial resistance. The reason doctors tell us to finish antibiotics courses is that it is dangerous to wound but not kill bugs: that way you end up breeding superbugs.

The less of the virus we have in circulation, the fewer new variants we will see, and the lower the risk of a really bad vaccine-dodging variation emerging inside the UK.

Manaus in Brazil shows the dynamic in extreme form. The Covid-sceptic government failed to act so, in spring 2020, it became the Covid capital of the world. They buried huge numbers of people in vast mass graves, but never reached herd immunity. Instead, uncontrolled spread has made it a hothouse for new more dangerous strains: a new local variant has emerged to re-infect survivors.

So there’s a second consideration for ministers. It’s not just that we have to pace ourselves to avoid a new wave of “old” Covid.  Driving down infections more also reduces the uncertain risk of a vaccine-dodging variant which could set us back a really long way.  And small differences in the timing of opening measures can make big differences to infection rates.

The Prime Minister set out a clear timetable and set of criteria for making decisions on reopening, one of which is that nothing game-changing emerges to blow us off course. We should stick to the plan.  The other day, he said we were making progress but it’s too soon to “take your foot off the throat of the beast”.

As a classicist, the mutations of Covid-19 might remind the him of the mythical beast Hydra, which grew two new heads if you chopped one off.  Heracles eventually solved this problem by cutting them all off, burning the stumps, and burying the last head under a giant rock. We might not need to take quite such drastic measures.  But so close to a happy ending, it’s wise to keep controlling the virus while we gauge these emerging risks.

George Freeman: The industrial strategy reforms I led helped to deliver Britain’s vaccine success. Now for the next phase.

1 Feb

George Freeman is a former Minister for Life Science and Chair of the Prime Minister’s Policy Board (2016-18). He is co-author and editor of the 2020 Conservatives book Britain Beyond Brexit.

The combination of Covid-19 and the Crash of 2008 have left this country facing the most serious crisis in our public finances since 1776. Unless we make the post-Brexit, post-Covid recovery a transformational renaissance of enterprise & innovation on a par with that unlocked by Thatcher Governments of the 1980s, we risk a decade of high debts, rising interest rates and slow growth.

We have a truly unique opportunity before us. As a science and innovation superpower, with the City of London now outside the EU’s rules for the first time in nearly fifty years, we can unlock a New Elizabethan era of growth – with Britain a world-leader in global commercialisation of science, technology and innovation. It is what our entrepreneurs have been crying out for. Now is the moment to make it happen.

That’s why I’m delighted to have been asked by the Prime Minister to help set up the new Taskforce for Innovation and Growth through Regulatory Reform (TIGRR) with Iain Duncan Smith and Theresa Villiers.

Reporting directly to the Prime Minister & the Chancellor’s Cabinet Committee on deregulation, and supported by a secretariat in the Cabinet Office, the Taskforce will consider and recommend “quick wins” to use our new regulatory sovereignty to unlock high growth sectors of the economy to drive post-Brexit post-Covid recovery.

Rest assured: there will also be no big report or a thousand pages of footnotes to wade through. We will be crowd-sourcing the best ideas from the business community and the entrepreneurs and innovators who are the engine of our economy.

The Prime Minister has asked me to bring my career experience in business starting & financing high growth bioscience technology companies as well as my experience as Minister in Health, BEIS and Transport leading our groundbreaking Industrial Strategy for Life Science which has paid such dividends this year.

The reforms I led in our Industrial Strategy – launching Genomics England, the Early Access to Medicines Scheme, MHRA and NICE reform, Accelerated Access procurement have been fundamental to our ability to lead the world in developing a Covid vaccine.

We now need to make Brexit & Covid the catalyst for bold reforms to unlock big UK opportunities for recovery & GlobalBritain across a range of high-growth sectors such as those I have worked on extensively as both entrepreneur and Minister:?

  • LifeScience: harnessing the potential of the NHS as a research engine for new medicines, unlocking digital health & innovative approaches to Accelerated Access, clinical trials & value-based pricing.
  • Nutraceuticals: health-promoting “superfoods”, cannabis medicines.
  • AgriTech: smart clean green twenty-first farming technology like the blight resistant potato banned by the EU.
  • CleanTech: new biofuels, Carbon Capture & Storage & digital “smart grids” to reward households & businesses for generating more and using less.
  • BioSecurity: harnessing the potential of Porton Down and UK vaccine science for plant, animal & human biosecurity.
  • Digital: removing barriers to UK digital leadership outside the EU GDPR framework.
  • Hydrogen: using the full power of Gov to lead in this key sector as we did in genomics.
  • Mobility: making the UK a global test-bed for new mobility technologies,

Before being elected to Parliament, I spent 15 years working in life sciences around the Cambridge cluster, financing innovation. I saw time and time again how the best British entrepreneurs and their companies struggled to build business to scale here in the UK.

So often we have invented the technologies of the future and failed to commercialise them effectively.

After several years working as the Government Life Science Adviser, I published my report for the Fresh Start Group on The EU impact on Life Sciences: Avoiding the Global Slow Lane.

Three years before Brexit, the report was the first to highlight the growing hostility of the EU to ‘biotech’ and the increasing tide of ‘anti- biotech’ legislation – driven by a combination of the German Green Party, Catholic anti-science and lowest commons denominator regulation by the “precautionary principle” which was having a damaging effect on the Bioscience Economy and risked condemning the EU – and by extension the UK – to the global slow lane in biotechnology.

The report set out how the genomic revolution was beginning to offer untold opportunities across medicine and agriculture to help generate huge economic, social and political dividends for mankind. Billions of people were being liberated from the scourge of insufficient food, medicine and energy. The main threat to that? The EU’s hostile regulatory framework.

This was seen clearly in numerous case studies. At the time, the EU’s hostility to GM led German-based BASF and major U.S firm Monsanto to announce their withdrawal from Europe in agricultural research and development. My report argued that unless something was done soon, other companies would follow suit, with dire consequences for the UK Life Science sector.

The report recommended a shift away from the increasingly widely used risk-based ‘precautionary Principle’ and greater freedoms around data protection, using public healthcare systems to help accelerate early access to medical innovations, and for the UK to be able to ‘go it alone’ in designing appropriate regulatory frameworks for GM crops.

The UK’s departure from the laws and requirements of the EU provides us with a once-in-a-generation chance to redesign and improve our approach.

This new Taskforce, therefore, is emphatically not another long-term Whitehall de-regulation ‘initiative’. Neither is this is about cutting workers’ or environmental rights that we rightly guaranteed in the 2019 election manifesto.

It is of vital importance that the UK maintains the high regulatory standards that we have consistently championed. In some of the fastest growing new sectors like Digital Health, Nutraceuticals and Autonomous Vehicle Tech, clear global regulatory standards are key to investment confidence. By setting the new global standards here in the UK we can play a key role in leading whole new sectors.

But we must think innovatively about supporting businesses to start and grow, and make the most of the cutting-edge technologies and sectors we nurture in our universities for global impact. For example, why don’t we use our freedom to pioneer new disease and drought- resistant crops, and use our aid budget and variable tariffs to help create new global markets for UK Technology Transfer?

We won’t unlock a new era of the UK as an Innovation Nation generating the technologies and companies of tomorrow with technocratic tinkering. We need bold leadership, clear commercial vision and reforms to support innovation and enterprise. The two go hand in hand. We won’t unlock an innovation economy without an enterprise society. So we will need to look at tax and regulatory incentives for high risk start/ups like the “New Deal for New Businesses” I proposed back in 2010 to drive recovery after the Crash.

This is a once-in-a-generation moment. Together we must seize it.

Ryan Bourne: A reassuringly conservative speech from Starmer’s Shadow Chancellor. The Tories will need to up their game.

20 Jan

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

Just in case the Conservatives hadn’t got the message: Labour under Keir Starmer is a very different beast to the party under Jeremy Corbyn.

Dueing the past fortnight, the Labour leader has parked his tanks on conservative lawns, talking first of Labour as “the party of the family,” then setting out a foreign policy vision of the UK as a “bridge between the U.S. and Europe.” Annelise Dodd’s Mais Lecture on economics was perhaps more striking still in the break of tone and type of criticisms made of Conservative policy compared with the last leadership.

Gone were the unhinged attacks on “neoliberalism” that characterised Corbynite bloviating. The fault-finding was specific and targeted. Dodds acknowledged the difficulties any government would face in a pandemic. Her surgical critique was that the UK’s Covid-19 outcomes were worsened by government foot-dragging on tightening lockdown restrictions, and Treasury attempts to fine-tune the balance between economic and public health.

Specifically, she claimed that its mixed-messaging on financial support to businesses, first delivering it and then threatening to withdraw it based on firms’ “viability,” created needless uncertainty. With the vaccines hopefully soon ending the pandemic, she argued that supporting firms until reopening was now more prudent than letting the chips fall when furlough ends in Spring. On the balance of costs and benefits, most economists would probably now agree.

There was little Corbyn-like wailing about past “austerity” either. Dodds’ criticisms of the last decade of government fiscal policy were restrained, and more plausible for it. She claimed that some spending cuts may have adversely impacted the pandemic response; that 16 fiscal targets coming and going since 2010 has created instability; that there should be more focus on the long-term public finances rather than the short-term; and that rapid deficit reduction coming out of the pandemic (including tax hikes, as Rishi Sunak reportedly wants) would be economically destructive. All these criticisms, individually, would not be surprising in ConservativeHome op-eds.

Yes, Labour still wants a bigger state than the Conservatives. Yet unlike many on the Left, Dodds appears under no illusions that running up debt is riskless or a free-lunch. “…it would be an irresponsible economic policymaker who planned on the assumption that low interest rates will continue indefinitely,” she said, while musing about a longer-term inflation risk. Her new “fiscal framework,” focused on planning to balance day-to-day spending and tax revenue, would be based on the recommendations of the Institute for Fiscal Studies.

Now none of this is particularly exciting. The speech was littered with boilerplate progressive assertions and the usual touching faith in the power of government. But it’s telling that Dodds actively shirked the opportunity to announce some glitzy new retail offer to grab newspaper headlines. There was no promise even of a Labour government “creating” high-wage jobs, or “transforming” the economy.

Instead, the speech was quintessentially small-c conservative. Labour, we were told, would protect the independence of the Bank of England, be “responsible” with the public finances, embrace free trade, protect businesses from Covid failure, focus policy on thorny structural problems rather than chasing day-to-day media coverage, and deliver “value for public money” from government spending.

Indeed, peer through the mundane parts of the speech, and you see a rhetorical critique of the current government that wouldn’t have looked out of place coming from Conservatives a decade ago. Dodds’ subtle message was that government decisions on infrastructure and procurement contracts were often determined more by short-term, pork-barrel political considerations than sound economic judgment, bringing with them at least a whiff of crony capitalism.

The speech highlighted waste and mismanagement through Covid-19, for example, including on the test-and-trace programme and the purchase of faulty antibody tests. Any errors are more forgivable in a pandemic when there were potentially huge returns on such investments and time is of the essence.

But those types of criticisms will likely amplify with Conservatives’ newfound penchant for large regional infrastructure projects (prone to massive cost overruns) and place-based revival packages (prone to political cronyism). Again, the argument that Conservative economic decisions are politically-motivated and wasteful is a very different attack than the more ideological opposition from Corbyn and McDonnell.

None of this is to say that all of Dodds’ analysis is coherent or correct. The theme of the speech was “resilience” – that is, how the pandemic shows the need for an economy robust to future shocks. Mercifully, Labour has not jumped on the bandwagon of saying the pandemic proves we need the government to actively re-shore a whole bunch of medical manufacturing production—the braindead, yet widespread “fight the last war” recommendation of those unable to conceive of shocks originating here. Yet there was still a bit of a “this crisis proves much of what I’ve always believed to be true” about her analysis.

Dodds suggested, for example, that a lack of savings among the poor, job insecurity among gig economy workers, and “socio-economic inequality” all help explain Britain’s poor Covid-19 outcomes. Perhaps on the margins those factors did make things worse. But the overwhelming reason why the UK has performed badly so far relative to countries such as South Korea, Taiwan, Australia, and New Zealand, is surely little to do with the labour market or macroeconomic policy, and almost entirely explained, to the extent that policy can actually explain things, by public health decisions at various times.

It is within Labour’s comfort zone to say reducing inequality and strengthening workers’ rights would have mitigated the costs of this pandemic. It would have been braver for them to expose failures in government bodies: say, Public Health England, whose centralisation of testing proved a disaster; or the NHS, with its systemic rationing reducing the incentive for spare capacity; or government scientists, who downplayed the early need for tough measures and told people mask wearing was unnecessary. If they really want “resilience,” they would surely explore the future case for deregulation in medical innovation. Earlier human challenge vaccine trials, for example, could have sped up delivery or a working vaccine, negating much of the last year’s pain.

Such a broad evaluation was perhaps always too much to hope for. But this speech proved that Labour is developing a more refined critique of the Conservatives. This is not the sort of emotional “blood on their hands” or anti-capitalist screeching we saw from Corbyn’s Labour.

Instead it is a crisp focus on the need for decisiveness, competence, and propriety in delivering effective government. The upgrade in opposition may well, in time, sharpen government decision-making. But a party with half-baked plans to rebalance the economy through massive infrastructure projects and shifting around government departments, led by a Prime Minister known for making late calls, may find such criticisms difficult to shake off.

David Gauke: The Covid paradox for Johnson: the nearer to normality we get, the more difficulties he’ll have

16 Jan

One consistent characteristic of the Covid-19 outbreak in the UK is that at the bleakest moments in the health situation, Boris Johnson’s position in the Conservative Party has been at its strongest, but when the health news is less unremittingly grim, the internal politics become harder for the Prime Minister.

Overwhelmingly, the country rallied around Johnson last spring. His popularity started to fray once the simple ‘stay at home’ message was replaced by a more complex and nuanced one. This was also the point at which some of Conservative MPs started to argue that restrictions needed to be relaxed more quickly.

By the autumn, the process of relaxing restrictions had to be reversed. A pattern started to emerge. The Government’s scientist advisers, Matt Hancock and Michael Gove would favour tighter restrictions; Keir Starmer would eventually called for these; Conservative MPs would complain that the existing ones were bad enough; the Prime Minister would delays making a decision until the evidence was overwhelming, and would then act. Whether with hindsight or foresight, the evidence suggests that the Prime Minister was right to act but that he should have done so earlier.

This approach – as seen with the autumn lockdown, the Christmas restrictions and the January closure of schools – is far from an ideal way to handle a pandemic, but timely interventions would have made party management all the more difficult.

We are now entering into a new stage of the crisis. Notwithstanding that Covid deaths are at record levels and likely to rise for another week or two, there are now reasons to be optimistic. The most recent lockdown is working and cases are falling. The first stage of the vaccine rollout appears to be accelerating. Focus now appears to be moving to be where the country will be in mid-February when, all being well, the first four priority groups – who have constituted 90 per cent of fatalities – will have received a first dose. What happens then?

Steve Baker fired a warning shot, albeit one aimed at his own foot, in writing to Parliamentary colleagues calling for them to contact the Chief Whip demanding that the Government set out “a clear plan for when our full freedoms are restored and a guarantee that [the lockdown] strategy will not be used again next winter”. If not, “the debate will become about the PM’s leadership”.

Within a couple of hours of this communication leaking, Baker tweeted his undying loyalty to the Prime Minister. All somewhat embarrassing, but maybe this was just an error of timing. Many MPs will be calling for a return to complete normality once the first phase of the vaccination process has been completed, and will react in horror if they do not get their way. The Government will have to lift restrictions or have a good explanation for failing to do so.

It will not be enough to say that the people most enthusiastically calling for an immediate “restoration of our full freedoms” are the same people who have been consistently obtuse in understanding the implications of the pandemic.

Some of them may have argued that the virus would disappear in the summer, that we were close to herd immunity, that rising cases were caused by false positives, that there have not been many excess deaths this winter and that lockdowns do not work (although it is unclear as to whether they question whether the virus is spread through human contact or whether lockdowns reduce human contact).

Such positions may have been understandable at earlier stages in this crisis but should have been long abandoned. The best anti-lockdown argument – ‘we cannot do this forever’ – is no longer applicable now we have a vaccine.

Nonetheless, if the Infection Fatality Rate is going to be reduced to a very low percentage, there is clearly a case for easing restrictions given the enormous economic costs of the lockdown. Why might this not be the approach the Government takes?

First, deaths may well start to fall substantially in March, but pressure on the NHS – especially Intensive Care Units – will remain high. Many of the people in ICUs are under the age of 60.

Second, the new variant is very transmissible. A rapid return to normal is likely to result in very high infection levels. The IFR might be very low, but if the numbers infected are very high, deaths – and deaths of relatively young people – will still be significant whilst Long Covid will be a major problem. Meanwhile, those vulnerable people who are not vaccinated or for whom the vaccine might not work will be very exposed.

Third, in the circumstances of widespread infections, consumer and employee behaviour will not return to normal. A lesson of the last year is that there is not a straightforward trade-off between health and the economy – scared people change their behaviour.

Fourth, where there is an opportunity for widespread transmission of the virus, there is a greater opportunity for the virus to mutate and escape the vaccine.

I make these points not to argue that all restrictions should remain in place for months on end (I happen to think that there is a very persuasive case to reopen primary schools before long, but that the speed at which restrictions are lifted is going to require some finely-balanced decisions on which reasonable people will disagree. Or to put it another way, there is going to be an almighty row in the Conservative Party in late February and early March.

There are two things the Government could do to contain this.

The Government would be wise to start explaining the considerations sooner rather than later, even if that means dashing some unrealistic expectations. They have to retain flexibility to react to new circumstances (which is why calls for ‘guarantees’ are ill-judged), and detailed programme of how restrictions will be removed would be unwise, but the public deserve to be treated as grown-ups.

Assuming that the removal of restrictions will be gradual and cautious, the Government should make that argument now, even if it antagonises some MPs earlier than otherwise. Prepare the ground.

It also needs to be ambitious in completing the rollout of the vaccine. At present, the process appears to be going very well, and there are reasons to think that the Government is, uncharacteristically, under-promising and over-delivering. The February target for the top four priority groups looks attainable, and the rest of phase one looks set to be done by early April at the latest.

It is vital, however, that momentum on the rollout is not lost once the priority groups have been done. If at all possible, completing the vaccination programme in the early summer, rather than the autumn, will help the country – and the Government – avoid a whole heap of pain.

The main constraint appears to be supply but if this can be addressed, there is a case for being more imaginative in the delivery of injections (I have argued for using the local government infrastructure that sets up polling stations to deliver vaccinations). However it is done, the Government must keep its foot on the pedal in terms of vaccinating the whole population as quickly as possible.

It is sadly inevitable that many thousands of Covid deaths will occur in the next few weeks, but this does appear to be a case when the darkest hour will be just before the dawn. The new dawn, however, may bring new challenges for the Prime Minister.

Daniel Hannan: Britain is utterly skint. We must use our post-EU freedom to grow ourselves out of this mess.

6 Jan

Daniel Hannan is a writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

Remainers were right after all. Almost every catastrophe they predicted has come about. Our economy has collapsed, unemployment is rising, several countries have closed their borders to us, civil liberties have been suspended and lorries have piled up in Kent. We have seen empty shelves and angry protesters and even (in East Africa) a plague of locusts.

True, none of these things happened as a result of our leaving the EU. Indeed, January 1 saw a smooth flow of traffic at the Channel ports – in marked contrast to the previous week when, still under EU law during the transition period, hundreds of mainly Eastern European drivers were trapped in Kent by France’s border closures. Still, however you cut it, we are in a worse place than anyone could have imagined a year ago.

These various catastrophes were, of course, supposed to be triggered by what Opposition politicians used to call (as if it were a single noun) “a-disastrous-no-deal-Brexit”. It is already becoming hard to remember how widely that outcome was expected. Several Conservative MPs, some of them good and sensible people, left their party because they did not believe that Boris Johnson would sign an agreement with the EU. In the event, he came back with the most comprehensive trade deal that the EU has with any sovereign country.

That gain, though, is insignificant next to the cost of Covid and its associated lockdowns – costs which, through a tranche of bad luck and a sprinkling of bad judgment, are higher for Britain than for almost any other country.

Eleven months of bad economic news have dulled our sensitivity to big numbers. Still, it cannot be repeated to often: we are utterly skint. The first lockdown caused a sharper contraction than any comparable period during the Great Depression or the two world wars. We have not yet had the chance to assess the cost of the second. Now we are in a third. The economist Julian Jessop reckons that every month of lockdown costs around £18 billion – 10 per cent of our GDP.

How are we going to recover? It may sound obvious, even trite, but the only way out of a mess like this is growth. The primary purpose of economic policy for the next five years should be to generate revenue. That doesn’t mean that we give up on improving public services, improving the environment, levelling up and all the rest. It simply means acknowledging the reality: without money in the kitty, these other things are impossible.

What can governments do to stimulate growth? They can stop putting barriers between businesses and their customers. Some of those obstacles are fiscal. Countries with lower, flatter and simpler taxes tend, other things being equal, to grow faster than countries with higher and more distortive taxes. We need to cut some taxes and suspend others – especially, in the short term, taxes on investment and employment.

Then there are the regulatory barriers – everything from planning restrictions that inflate the cost of housing to staff ratio rules that give us the most expensive childcare in Europe. I could fill a longer article than this one simply by listing them. Consider, as just one subsection, the EU laws we can now disapply: the Temporary Workers’ Directive, the REACH Directive, the End of Life Vehicles Directive, the droit de suite rules and other regulations that hurt London’s fine arts market, the Alternative Investment Fund Managers Directive, chunks of MiFID II, GDPR, the bans on GM.

Even as I ran through that list, you will have spotted the problem. A consequence of the pandemic has been to make voters around the world, including here, more authoritarian, more dirigiste, more demanding of state intervention.

It is hard enough in normal times to make the case for smaller government. Every privatisation is unpopular until it happens. Every regulation calls into existence a tribe of beneficiaries who arrange their affairs around it. But the perception of a common threat, as any psychologist will tell you, makes us even more collectivist and change-averse.

Our reaction may be irrational and atavistic, but it is no less real for that. If we were looking at the past year logically, we would see that the private sector often succeeded where state bureaucracies failed. PHE, Ofqual, NHS procurement and a hundred other agencies were unable to discharge their basic functions. But Tesco kept its shelves full, Amazon expanded to meet our demand and Pfizer found a vaccine.

The trouble is that we rarely think logically in a crisis. We instead fall back our Stone Age instincts, turning inwards, sticking to our tribe and demanding strong leadership. There might be a perfectly rational case to the effect that, for example, rising unemployment and falling wages make it impossible to keep increasing the minimum wage. But find me a politician who is prepared, in the current climate, to articulate that case. There might be an argument that a diminished private sector cannot continue to fund the public sector as though nothing had happened, and that the pain of lower wages should be spread. But, again, find me any MP who is prepared to explain that there is no money to Give Our NHS Heroes A Pay Rise.

We have won the right to make different decisions outside the EU. But the Coronavirus has diminished our appetite to exercise that right, just as it has made the need for reform more urgent.

Still, one way or another, change is coming. To succeed outside the EU, we need to be fitter, leaner and more globally engaged. The only question is whether we make the necessary decision now, or whether we wait to have our hand forced by economic reality.