Ryan Bourne: Are fears of a return of inflation overblown?

16 Mar

Ryan Bourne occupies the R Evan Scharf Chair for the Public Understanding of Economics at Cato, and is the author of Economics In One Virus.

“Inflation is coming” has been the perennial warning of conservative commentators over this past decade. After the financial crisis, it was feared that quantative easing would generate a sharply rising price level. Now, Rishi Sunak is kept up at night by the prospect of an inflation spike. Columns forewarning of one are increasingly common. Even some of the high priests of macroeconomic dovishness, such as Larry Summers and Olivier Blanchard, are sounding the alarm.

s this time different? And how worried should we in the UK be? When thinking through the economics we must unpack three related but different issues: Covid-19 price changes, the overall level of prices, and ongoing “inflation.”

Covid-19 price changes

As the economy reopens, certain sectors will see pent-up demand meet constrained supply. A lot of entertainment venues have gone out of business following a year without activity, for example. A freshly vaccinated public may suddenly be keen to go out and spend after June, despite less capacity in the sector than pre-crisis.

The flexible prices in such industries could therefore see sharp upward price volatility, with new entry taking time to reverse these relative price spikes. The scale will depend on whether demand peaks in a “big bang,” or if there is a gradual transition to whatever “normal” now is. But for a returning public, this will feel very much like a substantial cost-of-living increase.

The Price Level

“Inflation,” though, is “an ongoing rise in the general level of prices.” It is, as Milton Friedman famously said, a “monetary phenomenon,” seen when the money supply increases more quickly than the supply of goods and services. Here, the risks do look different to after 2008.

During the global financial crisis, the money base increased more than four-fold, but broader money supply measures (e.g. M2) barely changed.

Since the beginning of the Covid-19 pandemic, however, not only has the money base increased dramatically, but M2 has increased by over 25 per cent. This hasn’t “stimulated” higher overall nominal spending, since people have been unwilling or unable to engage in certain activities, leading to a sharp fall in money’s “velocity.” As velocity rebounds, extra funds circulating again will likely raise the price level as activity begins (i.e: we will see a “one-off” increase in prices, feeding through over a number of years).

This could see inflation temporarily running above the Bank of England’s two per cent annual target. Indeed, despite current CPI inflation at just 0.7 pe rcent, British macroeconomists believe the forecasts tilt upwards.

Asked which scenario was more likely to hold “on average” for the next decade, 37 per cent of Centre for Macroeconomics economists surveyed said inflation would be on target. But 41 percent said that the Bank of England would either “allow” or “wouldn’t be able to avoid” inflation exceeding its target (just 15 per cent thought inflation would be “allowed” or would inevitably remain below two per cent).

Whether inflation exceeding that two per cent target is considered a “bad thing” really depends on two individual judgments:

  • Whether “inflation targeting” is really the appropriate goal for monetary policy, or instead whether a level target for prices or nominal GDP is preferable, and;
  • Whether a period of significant inflationary pressure could or would be swiftly eliminated by the Bank of England afterwards without negative consequences.

The UK experienced a very dramatic collapse in nominal GDP last year, including a fall in inflation below the Bank’s inflation target. If one believes optimal policy maintains steady increases in the price level or in the level of nominal GDP over time, then a post-crisis overshoot of the inflation target in the service of returning to trend may be desirable. The Bank wouldn’t therefore need to drastically adjust policy, but could “look through” this price level uplift, aiming for the two per cent inflation target in the longer term.

Longer-term inflation

What would obviously be problematic is were the broader money stock to continue growing faster than trends in nominal GDP or desired inflation, generating sustained higher inflation. Few doubt the Bank of England would have the tools to choke this off.

So the questions that arise from this possibility really are,

  • How much damage would be done if above-target inflation altered inflation expectations in the interim? an
  • Would the Bank of England be willing to bring inflation back to target even if it meant the government’s debt service costs spiking?

Economists such as Summers, scarred by the 1970s and early 1980s, believe it “naïve” to think the alternative to a low inflation world is a modest inflation world with the promise of future low inflation.

Playing with significantly above-target inflation for a time can instead help create a high and variable inflation world. If people feel and so come to expect higher inflation, they start shortening contracts, demand cost-of-living adjustments, alter the balance of their portfolios away from non-interest bearing assets, and delay certain investments. This can make the economy less efficient, and entrench the combination of slow growth and high inflation.

It previously took painful efforts to “re-anchor” inflation expectations and cement central banks’ monetary credibility. So is this credibility at risk again?

There have been some recent jitters, but as yet little sign of widespread concern here. Inflation expectations jumped swiftly to 3.8 pe rcent in December, but have since fallen back to normal levels. Expectations implied by inflation-protected gilts predict inflation will exceed its target over the coming decade, but again are not historically abnormal. Recent increases in gilt yields are more likely to reflect the expectation of a more robust recovery than large inflation concerns.

Obviously, we should be cognisant of fears of how high government debts, or political pressures to change central bank mandates, can corrupt price stability. Certain historic episodes have led to “fiscal dominance,” with central banks prioritising keeping governments’ debt servicing costs low over price stability. The U.S. has officially changed its mandate with an asymmetric bias towards lower unemployment. Any change to the Bank of England’s official mandate, or even just prolonged above-target inflation, could risk fears of monetary policy here being driven by fiscal concerns about debt servicing costs or 1970s-style desires to try to push unemployment lower too.

But as yet, again, should the UK doubt its institutions? Andrew Bailey hasn’t said anything suggesting that the Bank would ignore sustained inflation. The Chancellor, if anything, is too eager to close the deficit through damaging business tax hikes because he fears the inflation risk—something that paradoxically could worsen near-term price level pressures by choking off investment in productive capacity as spending rebounds.

All this means that I think the current fears are overblown. But, yes, the broader context requires longer-term vigilance – the balance of risks on inflation, driven by economic and political trends, has definitely shifted.

Looking back at the Budget a week on, its plan for growth is not convincing

12 Mar

The only worse judgement about a Budget than a snap article is an opinion poll – and we write that regardless of the reception that polls gave last week’s.

For just as a snap view can be based on less than the full picture (a particular feature of Gordon Brown’s), so a polling one tells one nothing about whether a Budget will work, or indeed will be as popular a month after its release rather than a day after.

Our own snap take was largely restricted to asking whether the tax rises announced for future years will really happen at all – or whether Boris Johnson will be able to take advantages of higher revenues to cancel them, and then seek a quick general election.

The end of the week after the Budget may be a better time to take a fuller view.  It would start by trying to understand the position that Rishi Sunak is in.

The post-Budget piece on this site by his Treasury colleague, John Glen, set out the scene as the Chancellor sees it in the latter’s first presentation since Brexit was done in full, and vaccines gave us hope that the pandemic will end.

The economy has shrunk by 10 per cent, the largest fall in over 300 years.  And our borrowing is the highest it has been outside of wartime.

That suggests going for growth in the short-term, as this site has recommended, with fiscal consolidation taking place later, as it will have to do in spades if the growth doesn’t come.  The timing of Rishi Sunak’s measures suggest that he agrees.

We believe that tax rises inevitably have to play some part in that consolidation along with spending cuts, and recognise that the run-up to an election is a difficult time to do either: the Chancellor is cursed by the economic and electoral cycles being out of kilter.

Certainly, government will always have to tax something to pay for public services, and the sensible view is that that something should be spending rather than income (or business).

Which explains why early Thatcher and Osborne budgets alike put up VAT, and why the latter wanted two new council tax bands on more expensive properties – as he confirmed to ConHome last year.

However, Sunak is boxed in on VAT.  The final headline pledge of the last Conservative Manifesto was “we will not raise the rate of income tax, VAT or National Insurance”.

We may know more about his plans for property taxes if any on tax day, March 23rd.  There is a plan on the table to replace council tax (and stamp duty) with a new property tax, but it is revenue neutral.

Since it would already create losers in more expensive properties in London, Sunak is unlikely to adapt it to create even more of them there and elsewhere.

Business rates were a dog that didn’t bark during the Budget, and any eventual reduction to them looks to come largely from a digital sales tax, not a residential property tax.  Some who would pay it belong to an interest group with little direct leverage: foreign companies.

But unable to turn to VAT and unwilling to turn to property – or so it appears – Sunak targeted income tax allowances and business in his Budget, via corporation tax (assuming, as we say, that these hikes ever happen at all).

On the first, the Office for Budget Responsibility says that the allowances freeze will haul a million more people into the higher rate band.  Fiscal drag is scarcely new – as the Institute for Fiscal Studies noted two years ago – but the move will do nothing to improve incentives.

On the second, there are some detailed arguments for the increase, as set out by Anthony Browne on ConservativeHome recently, but a general one against, which is based on certainty.

In essence, lower rates of corporation tax have been a feature of Conservative policy from Thatcher through to Osborne and beyond – together with an emphasis on lower income tax rates, supply side reform and a smaller state.

If these higher ones ever come in, the Chancellor will essentially be trading off higher corporation tax from some companies for the new super deduction for some companies.

That would mean a shift from a relatively simple and neutral system to a more complex and partial one, which would be more likely to help firms in the Midlands and North, according to sources that this site has spoken to.

We are not convinced that such a switch, if it ever happens, is a net plus for Britain.  But now that Sunak has turned on the super deduction it would be best for him, in order to help provide that certainty, not to turn it off in two years.

Elsewhere, those Thatcher-to-Osborne orthodoxies are also in flux.  They were first challenged in recent times not by Johnson, but by Theresa May, with her mantra of “the good that government can do”.

The Industrial Strategy was a product of her approach.  We are all for one in principle if it has a clear aim, namely turning pure research into translational research.

As Greg Clark, who had charge of it under May, conceded yesterday on this site: “it may have tried to do too much in one White Paper”.  His successor, in his swashbuckling way, dismissed in the Commons this week as “a pudding with no theme”.

That directness is a part of what makes Kwasi Kwarteng such an engaging politician, and it may be that he plans a slimming down of the strategy that will deliver results.

But one source close to the process worries that “individual policies will continue anyway but without consistency, ownership or scrutiny”.  And Clark has a point when he says that any strategy must be linked to place as well as sector – in other words, to levelling up.

We’re concerned that the Government has come to see such levelling up as incompatible with supply side reform and institutional change.  We can’t see much of the former in Build Back Better – the Government’s “plan for growth”.

It’s big on intrastructure and net zero; smaller on skills and innovation: as May said in the Commons this week, there’s a limit to how many times Ministers can review research and development tax credits.

If it really wants to go for sustainable and more even growth, the Government will need to devolve more power.  As a former senior Minister put it to ConHome recently: “we can’t deliver levelling up, a skills revolution, an industrial strategy and zero carbon from the centre”

“The new mayors have a convening power: they can get local businesses, the Chief Constable, the NHS bigwigs, the university vice-chancellors, the local enteprise partnerships round the table, and come up with a plan.”

On supply side reform, we understand why Kwarteng killed a planned review of workers’ rights.  But what is the plan to ease supply elsewhere – especially on housing?

On institutional change, there are commitments to reform the civil service and the courts, but almost none that apply to the major public services, especially health.

To date, tax rises are taking the strain of future consolidation, and the danger for the Chancellor is that he finds himself boxed into that position permanently – with Downing Street spooked by the consequences of a proper spending review for Tory red wall seats.

The Budget promises infrastructure spending, possible tax rises, pots of money from the centre for those provincial seats, limited localism, plus some levelling-up but little reform.  That’s a mix of pluses and minuses, but not a plan for growth.

Andrew Gimson’s Budget sketch: The Chancellor quotes Tennyson and delivers a lesson in levelling up

3 Mar

“That which we are we are,” the Chancellor declared as he reached the end of his Budget Statement.

Could heavens! Could this prosaic figure be about to raise our spirits by launching forth into the final lines of Tennyson’s Ulysses?

There can be little doubt those words were in the mind of whoever drafted Rishi Sunak’s peroration:

…that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.

Sunak has the benefit of a traditional English education, and will surely have spotted the reference.

But Tennyson’s ending was presumably felt to be at once too lyrical and too modest. For although the Chancellor admitted the economy has suffered its largest fall “in over 300 years”, he had no desire to suggest we have been “made weak by time and fate”.

He adopted instead the manner of a teacher addressing a mixed ability class whom he intends to “level up”, as he put it, even though most of us are not much good at maths, and economics is dismal science we do our best to avoid.

So Sunak had to be slow, and lucid, and conceded that if we would rather leave the economics to him, that would be fine.

“I do want to be honest about what I mean by sustainable public finances,” he assured us, and then, a moment or two later, “I have and always will be honest with the country about the challenges we face.”

Not long afterwards, he said of the changes to corporation tax, “I recognise that they might not be popular but they are honest,” and announced that he wants to be “honest about the challenges facing our public finances”.

Even the dimmer members of the class were starting by now to get the message that the Chancellor wishes us to accept that he is honest, but not all of us were sure we fully understood what he meant by “challenges”, a term other politicians often use when they mean “insurmountable difficulties”.

The Chancellor proceeded to give us a geography lesson. He said that a Treasury which acts for the whole United Kingdom “demands a different economic geography”. In this way, he explained in a level tone, we shall achieve “the levelling up” which we require.

There followed the grand recitation of the eight new freeports in England, stretching from Plymouth to Teesside, after which we hoped to get Tennyson, but were disappointed. Perhaps the speechwriter just had a bet with a friend that he could get a line of the poet into the speech without anyone noticing.

Boris Johnson will certainly have noticed, for his head is full of poetry. He sat listening in a supportive way, emitting audible “hear hears” from behind his mask, but jiggling his right knee up and down in a manner suggestive of unbearable mental tension.

Sir Keir Starmer rose to reply, and was rather good: in a different league to Jeremy Corbyn. Insofar as it is possible to hold an almost empty Chamber, he held it.

But if he is to be Prime Minister, he needs this Government to fail, and Sunak spoke with the self-confidence of a man who has not yet failed at anything.

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.

Parliament should vote monthly from March on ending the lockdown

23 Feb

Perhaps the most significant moment during Boris Johnson’s statement on the Government’s roadmap out of lockdown came when he was questioned by Paul Bristow.

The Peterborough MP asked the Prime Minister about the five week gap between each of the plan’s five stages.  In sum, his question was: if the date on which each stage is due to begin can be put back, why can’t it also be brought forward?  Why a rigid five week delay?

Johnson’s answer was that the five week gap is “crucial…For instance, we will need four weeks to see whether the opening of schools has caused an uncontrollable surge in the pandemic, and then a week to give advice and so on”.

This five week delay, which gives the plan its inflexible character, is in the Prime Minister’s view “dictated by the science” – and suggests that we were wrong yesterday to suggest that it might be relaxed if better progress than expected is made early.

Strange but true: lockdown sceptics (such as the 13 Conservative backbench MPs, including Bristow, who yesterday urged a faster restiction lift) have today been joined by none other than the high priest of shutdowns – Neil Ferguson of Imperial College.

“Hopefully what we’ll see when each step happens is a very limited resurgence of infections. In which case, there’s a chance we can accelerate the schedule,” he said on Times Radio.  Number Ten insists that this won’t happen.

The sum of the Government’s view will be informed by figures that won’t be in the 60-page roadmap document: its estimate of death numbers, cases and hospitalisations if restrictions are lifted earlier (and therefore of the threat to the NHS’s operability).

The Prime Minister, his top quad of Ministers and SAGE will be worried about how high vaccination failure rates, the number of those unvaccinated and potential new variants could push those figures.

That anxiety was the sum of his answer to the Chairman of the Covid Recovery Group, Mark Harper, who pointed out that groups one to nine in the Government’s scheme will have been vaccinated by the end of April.

These are everyone over 50 and those aged 16 to 64 with a health condition that makes them vulnerable to Covid.  “Those groups account for 99 per cent of deaths and around 80 per cent of hospitalisations,” Harper said.

“So for what reason, once they have been vaccinated and protected from Covid by the end of April at the latest, is there any need for restrictions to continue?”  Johnson reverted to his point that vaccination doesn’t necessarily equal protection.

You might argue that the vaccines need a bit of time to kick in, and that Harper’s date is say a fortnight premature.  Or you may believe that the Prime Minister is right.  Or that all restrictions should end now bar voluntary social distancing, masks and handwashing.

Or you may have a quarrel with details of the proposals.  For example, the restriction on outdoor sports activity until March 29 seems Cromwellian.

Or you may think that some are already honoured more in the breach than the observance – such as the restriction on meeting outdoors with more than one person.

Above all, you may go back to Bristow’s point, and ask why restrictions can’t be lifted more quickly than explained if hospital numbers fall faster than expected.

We lean towards thinking that the roadmap journey looks on the slow side, but acknowledge that the calculations are not easy, and may change: essentially, they boil down to lives v livelihoods, and lives v lives, as they always have: cancer deaths, say, versus Covid deaths.

That’s assuming in this last case, of course, that the NHS is operating as normal, more or less.  But the most pressing question isn’t who’s right or wrong.  It’s who should take the decision – and how often.

Johnson confirmed to Graham Brady yesterday that there will be a vote on the renewal of emergency powers before Easter, which falls this year on April 4.

The Commons should also vote on these at least twice thereafter: at the end of April – which would give the House a chance to test Harper’s view – and the end of May.

Our best guess is that the Commons wouldn’t vote at any point to speed up the Government’s plan, since more Conservative MPs would vote with Ministers than against them, and opposition MPs would abstain at the very least.

But this is beside the main point – which is that the Executive should propose, the Legislature dispose, and that in this case there should be regular opportunities to test the will of the house as the facts emerge.

In that way, life would be breathed into the Prime Minister’s slogan of “data, not dates”.  At the moment, we are being offered data – and dates maybe later than those given, but not earlier.

On one point, however, all can surely agree.  It is wonderful to see so large a proportion of our vulnerable people being vaccinated so fast, due to good Ministerial decisions, scientific prowess and effective management.

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.

Liam Fox: Are we really going to close down the global economy every time a new virus emerges?

24 Jan

Liam Fox is a former Secretary of State for International Trade, and is MP for North Somerset.

Over 71,000 more people died in 2020 than would have been expected in a normal year. Apart from a deluded and dangerous minority whose addiction to conspiracy theories leave them in denial about the impact (or even the existence) of Covid-19, most people recognise that these excess deaths are due directly or indirectly to the pandemic.

The UK has been recognised as one of the world leaders in the vaccination programme. Britain has made £548 million available to the Covid-19 Vaccines Global Access facility (COVAX), to support equitable and affordable access to new coronavirus vaccines and treatments around the world.

The rollout of the vaccine to the UK population has also been impressive, although there is growing concern about the decision to extend the period between doses of the Pfizer (but not the Oxford AstraZeneca) vaccine.

If we are to continue to lead globally on the issue – and this year’s G7 summit gives us an ideal opportunity to do so – we must be clear about the reality in which we find ourselves, and recognise that the data systems we currently have will be inadequate to deal with the challenges of global pandemic.

We need to understanding that, contrary to a great deal of assertion, this is unlikely to be a “once in a generation” event.

The first major, and deadly, coronavirus outbreak of the 21st century was SARS in 2002.  The second was MERS in 2012. So we are now in the third major global coronavirus outbreak in 20 years.

While the first two had higher death rates than Covid-19, it is the transmissibility of the latest viral variant that has caused such damage. There is, however, no guarantee that we will not get both a more deadly and more transmissible outbreak in the future.  It is likely that Coronavirus is here to stay, and that we will have to deal with potential new variants emerging from time to time around the world.  To have any chance of dealing with this effectively, we need to develop international protocols, and this means having standardised recording of data.

In the UK, there is no single measure to calculate the mortality rate for Covid-19 accurately . We use inferences from total excess death rates, the number of people who have died within 28 days of a positive Covid-19 test, and those who have had Covid-19 mentioned as a contributory cause on their death certificate.

None of these on their own can give us a truly accurate picture about the cost in lives of the virus.  There are three different types of patients who may fall within the excess mortality figures.

The first group is those who have died of Covid, i.e: where this was the main cause of death.

The Coronavirus Act 2020 made changes to death certification which may cloud the waters in this regard. While it is still intended that the doctor who attended the deceased during their last illness should, where possible, complete the death certificate, the Act also allows this to be completed if a patient was not seen by any medical practitioner during their last illness.

If that happens, a doctor would need to state to the best of their knowledge and belief the cause of death.  Covid-19 is now an acceptable ‘direct’ or ‘underlying’ cause of death for the purposes of the certificate but, although it is a notifiable disease, this does not mean that deaths from it must be reported to the coroner.

This may well result in fewer post-mortems being conducted, and a valuable source of data missed.  Some autopsy studies of patients who died of “influenza” during the 1918 Spanish flu pandemic showed that, while almost all patients had evidence of bacterial pneumonia, fewer than 50 per cent tested positive for influenza viral antigens or viral RNA. In other words, there was a significant overestimate of the numbers who had actually died of influenza itself.

The second group is those who died with Covid19, that is, those who had been diagnosed with a positive test ,but who may have died of other, unrelated causes.

It seems strange to many that someone who tested positive for the virus but was hit by a bus within a month is counted as a Covid-19 death.

The third group is those who have died as a consequence of Covid-19, including those who did not access medical care because of lockdown, or those who were unable to access the appropriate care because hospitals were overwhelmed with Covid-19 patients.

This will be of importance in determining how we run our healthcare services, especially if pandemic is likely to occur more frequently.  It has long been the practice in the NHS to run at very high bed occupancy rates.

We have to ask, if pandemic is going to be potentially a more frequent event, whether this is tilting the balance between efficiency and resilience in the wrong direction.  Given that we have spent billions of pounds trying to stop the capacity of our healthcare system being overwhelmed, would it not be more sensible (and potentially more financially prudent) in future to run the system with many more beds available than we expect to need at any one time?

Given the overall cost to our economy and the impact on the future of our public finances, perhaps we need to re-visit some of the assumptions that have underpinned policy under governments of all political colours. ,

Britain has a real opportunity to lead the global debate and the government can lead the way with the shakeup of Public Health England and the Resilience Unit within the Cabinet Office, both of which should have been better prepared for any pandemic.

I have supported the Government in all the lockdown measures they have taken in relation to Covid-19 but, in future, are we really going to close down the global economy every time a new virus emerges?

If not, what are the international protocols that we will need to develop as a global community and what are the metrics that we will require to make them work? Without proper information, how will we be able to determine the case fatality rate (the deaths from a disease compared to the total number of people diagnosed in a particular period) which will be one of the key measures that we will have to make in the event of a new outbreak?

We will also need enforceable global rules around transparency and notification. As we head for the G7, there can be no better example of “Global Britain” than for Britain to take a lead in pandemic preparedness and work towards global definitions that will enable us to avoid the uncoordinated global response that we have seen during Covid19.