Garvan Walshe: Orbán, Le Pen, Morawiecki. Europe’s new national populist alliance is a sign of weakness, not strength.

8 Jul

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

Spin doctors for Marine Le Pen made a rather breathless announcement of a “rassemblement de patriotes”. Viktor Orbán’s followed suit . There is both more, and less, to this alliance than meets the eye.

More, in that it is part of a long-running effort. See this from Le Pen in 2014, or another announcement this April Fool’s day, by Orbán and Mateusz Morawiecki, Poland’s Prime Minister.

Less, in that this particular declaration falls far short of a full European political alliance, and relates only to the Conference on the Future of Europe, which, after a year of the Covid pandemic, has begun debating changes to the EU’s institutions.

Unlike British Eurosceptics, who were wound up by waste and fraud in European financial institutions, the parties signing this declaration are rather more exercised by attempts, such as the European Public Prosecutor, to uncover and punish the abuse of taxpayers’ money. It is I’m sure a coincidence that Orbán’s father’s agribusiness is doing so well that he can afford to build himself an enormous country house, dubbed “Putin’s Palace” by Hungarian wags.

Putin himself is relevant to one of the alliance’s other aims: keeping national vetoes on EU foreign policy. Their presence has allowed Russia and China to delay and even block sanctions against them and their allies, such as Belarus’s Alexandr Lukashenko, while Le Pen’s own party put itself $11 million in debt from a Russian bank.

A third piece of the puzzle is their opposition, in the name of sovereignty, to the EU’s rather delayed efforts to protect the freedom of the press and the independence of the judiciary in Poland and Hungary.

A recent spat over a Section–28 style law in Hungary and “LGBT free zones” in Poland has stiffened the EU’s resolve, with Mark Rutte, Holland’s Prime Minister, hinting that Warsaw and Budapest might do better to avail themselves of Article 50 if they have a problem with the supremacy of European law built into the EU’s governing treaties.

But the danger of Huxit or Polexit is rather exaggerated. This is not so much an alliance of patriotes, as for the capture and diversion of EU funds.

Moreover, the national populists’ protector in the White House has gone, replaced by a man who considers Putin a “killer” and the restoration of liberal democracy a central part of his foreign policy.

Their domestic position is also rather less steady. Marine Le Pen’s party failed to impress in France’s regional elections. Law and Justice is on course to lose the next Polish vote, following the emergence of a new moderate-conservative Polska 2050 party. Even Orbán is behind an opposition alliance in the polls, with an election due next year.

This vulnerability is probably behind the anti-gay culture war, which is proving at best a damp squib domestically, and a strategic error at a European level. Hungary (and to a lesser extent Poland) have operated a bargain with Austria and Germany, whereby they gave Austrian and German manufacturing firms good conditions close to Western Europe’s old border, and in exchange Germany, in particular, has overlooked corruption and the dismantling of democratic institutions.

This had caused grumbling in the rest of the EU, but not, until now, much political will to address it. Whereas on migration Orbán and Law and Justice were able to count on sympathy from significant portions of the European public, on gay rights they cannot. Instead of dividing Western Europeans, this culture war unites them.

Second, the creation of a common post-Covid recovery fund, under which Poland and Hungary stand to benefit significantly, changes the calculus. Europeans don’t mind helping each other out of the Covid mess, but are asking: why should we pay for these bigots? Furthermore, the Commission this week demanded revisions to Hungary’s plan to spend the recovery fund, because of weak anti-corruption safeguards.

Weakening at home and friendless abroad, the populist alliance finds itself on the back foot. The five pro-integration political groups are pushing for democratic reforms: from making the Commission answerable to the parliament, extending voting rights in national elections to all Europeans, giving elected institutions more power over EU taxpayers’ money, and the EU more power over areas such as foreign policy and the rule of law. The national populists can dilute these proposals but, unless they can win national power in a large member state like France or Italy, they stand little chance of stopping them altogether.

The proposals that emerge will not be to the liking of Warsaw and Budapest (or traditionally Eurosceptic capitals like Copenhagen). Nevertheless there is impetus to go beyond the Lisbon Treaty in the name of “European sovereignty”, but also to ensure oversight of the new common European debt. Here the old dilemma between widening and deepening Europe reemerges.

Countries in the west, led by France, (a partially-accurate shorthand, because the Baltic states would also be keen) prefer to deepen, and would not mind if a sufficiently large coalition went ahead to build new structures into which the laggards could later be incorporated.

In central Europe, however, there is a strong stategic as well as economic interest in keeping the Eastern and Western halves of the continent together: that’s why Germany has so far been reluctant to meet Hungarian and Polish provocation head on, and is wary of a “multi-speed” Europe. But France also knows that a deepening project without Germany would not be viable, so some sort of compromise needs to be made.

The effect of the national populist alliance, paradoxically, is to define the minimum of what the new Franco-German compromise must contain: end of foreign policy vetoes, democratic oversight of funds, and effective mechanisms for protecting the rule of law and guarding against state capture. Their gay rights culture war risks giving Western Europe the political will to enact it.

Chris Skidmore: If “Global Britain” wants to succeed, it must increase its spending on innovation and research

11 Jun

Chris Skidmore was Universities Minister twice between 2018-2020, and is Co-Chair of the All Party Group on Universities and Chair of the Res Publica Lifelong Education Commission. He is MP for Kingswood.

Boris Johnson knows that narratives matter. Levelling up, taking back control, building back better may seem slogans, but they point to a vision of a post-Brexit Britain that is free to renew itself for the 21st century.

Central to that vision is also the UK as a “global science superpower”, a phrase first coined by the Prime Minister in 2019, yet which now has more than a ring of truth in its utterance when we look at the UK’s commitment to investing in research to uncover a Covid vaccine, and as a result to continue to lead the world in its vaccination programme.

It’s clear from his arrival for this weekend’s G7 meeting in Cornwall that the vision of Britain as a global centre for science and technology remains undimmed. The Prime Minister chose to showcase the UK’s future horizontal space launch site at Newquay on his arrival in Cornwall— made possible thanks to a multi-million pound government investment in partnership with Virgin Orbit, in a few years’ time, space launch into low earth orbit will be a reality, and along with vertical launch sites at Sutherland and the Shetlands, promises to give the UK the first launch base in Europe.

Yet when it comes to overall spending on science, research and innovation, if we look at the other countries attending the G7, and compare the UK’s current investment, both in terms of total investment but also as a proportion of GDP, we need lift off soon.

Currently the UK spends around 1.7 per cent of its GDP on R&D. Yet the US and China are heading towards three per cent GDP, Japan spends 3.2 per cent, Germany is planning to reach four per cent. Only Italy and Canada are behind the UK in terms of R&D investment in the G7. Outside of this group, other countries are pushing even faster still. South Korea is already at 4.5 per cent and Israel higher still at 4.9 per cent.

Of course the Government has committed to spend 2.4 per cent GDP by 2027 on R&D — what was the OECD average back in 2017 — indeed the recent government commitment to double public R&D spending to £22 billion by 2024/25 has certainly given the commitment a boost. Yet by the time we reach July 13 in a few weeks time, 2027 is just 2,000 days away. Four years have so far past, with R&D activity having only risen around 0.2 per cent of GDP in this period. With five and a half years to go, we cannot afford to continue on the same trajectory. Even the OECD average that was the benchmark for the 2.4 per cent strategy has risen to probably over 2.6 per cent.

We only need to look ahead at the pack pulling ahead in this global technological race. Joe Biden has already placed research and innovation at the centre of his “building back better” strategy. In March 2021, The White House announced that as a part of its American Jobs Plan, it was requesting Congress to authorise $180 billion in federal investment designed to advance US leadership in critical technologies and American research.

It’s clear why R&D is the industry of choice. According to a 2020 report by Breakthrough Energy on the Impacts of Federal R&D Investment on the US Economy, if the federal government were to increase its investment into R&D to at least one per cent of GDP by 2030, then that investment would support 3.4 million jobs. Additionally, this continued investment would be projected to add $478 billion in activity to the American economy with a projected $81 billion in tax revenue windfall.

As the United States seeks to increase its investment into innovations driven by R&D, the German government has also pledged to both increase its tax allowance for companies investing in research, but also increase its central funding to the tune of €2.5 billion. This investment is specifically designed to target funding for electricity mobility, battery cell production and safe charging infrastructure. Additionally, the German government has announced that it was looking to provide a €1 billion bonus programme targeting “forward-thinking” manufacturers and suppliers, specifically in the automotive industry. In 2018 alone, the German government invested the staggering sum of €105 billion into R&D.

Elsewhere, China also announced a serious increase in R&D investment during the Fourth Plenary Session of the 13th National People’s Congress in March 2021. The announcement that it will be increasing investment in R&D by more than seven per cent every year over this Five-Year Plan, with expenditure on basic research rising by 10.6 per cent in 2021 alone. These investments are yet another signal that China is seeking to dramatically increase its domestic technologies such as for example artificial intelligence, quantum information, semiconductors, biotechnology and deep space capabilities, most of which are currently dependent on international suppliers.

In the wake of the pandemic, with many economies and sectors seeking to innovate and change their working practices, to reform their business, now is the time to double down on R&D investment, especially when we recognise where the rest of the world is heading. Even I have come to doubt whether 2.4 per cent, the OECD average at the present time, will be sufficient for the scale of change that is coming in the 2020s and into the 2030s.

The success of “Global Britain” now depends on matching countries that have transformed their economies towards innovation and research. I would now go further— and suggest if we wish to keep up with our G7 colleagues, the forthcoming Innovation Strategy should set a definite timetable for three per cent, and beyond to 3.5 per cent of GDP being spent on R&D. To fail to achieve this in contrast to the other major world economies be setting ourselves up to fail.

Iain Dale: People will die as a result of the EU’s Covid games. But don’t expect the media to criticise Saint Macron.

19 Mar

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

Another day, another attack from the EU on Britain and/or AstraZeneca (AZ).

It’s becoming a very unfortunate pattern. Once you can forgive, twice you can put down to coincidence. Three times and you start to wonder if there’s an agenda. And so on.

This started many weeks ago, when it became clear that the UK had forged ahead in its vaccine rollout, unlike the EU, whose bureaucracy and incompetence led to it being two to three months behind.

As this reality dawned, it seemed the only way it could cover its back was to accuse the UK of vaccine nationalism. President Macron of France even went so far as to cast doubt on the safety of the AZ vaccine with absolutely no proof whatsoever. The German newspaper Handelsblatt followed suit.

We should remember that Macron is president of a country where vaccine scepticism is already rife. It was one of the most irresponsible things I have ever heard come out of a so-called statesman’s mouth. If Trump had said it, Europe’s media would have been up in arms. Not so much with the sainted Macron.

A few weeks later Charles Michel, the President of the European Council, erroneously, and totally without any foundation, claimed that Britain had imposed an export ban on vaccines or vaccine contents. No such ban had been imposed and the European Commission was forced to admit it.

Ursula von der Leyen then proceeded to threaten an export ban to the UK, which again, had to be withdrawn. She did though approve a decision by the Italian government to ban the export of 250,000 vaccine jabs from AZ to Australia, on the basis that they were needed in the EU. Yet all we hear is that there are hundreds of thousands of AZ vaccines sitting in fridges and there is no shortage whatsoever.

And then 17 European countries – not all of them EU members – decided to suspend AZ vaccines on the basis that there were reports of people suffering blood clots after having had the vaccine. Almost immediately we found out that there had been 28 cases per million after 17 million doses had been administered.

Strangely, however, there was no ban on the Pfizer vaccine, given that it has had 22 cases. I wonder why that would be…

While it’s always right to be cautious and to analyse the “yellow cards” which all vaccines experience, the effect of this suspension of rollout has yet again undermined public confidence in the AZ vaccine. So why have these countries done it, given they must have known the consequence?

The head of the Italian medicines regulator has been highly critical of the decision and says it was done for “political reasons”. Scandalous.

There is another explanation. Big pharma companies have incredibly powerful lobbying operations, both in Brussels and in national capitals. The AZ vaccine is sold at cost, whereas all the other companies’ vaccines are far more expensive and are produced with varying, but large, profit margins. It’s in their interests to trash the AZ vaccine. It costs between £1 and £2 per dose, compared to the £13-£20 for the Pfizer offering. Others are a bit cheaper but way more than AZ. Follow the money.

As I write, the World Health Organisation and the European Medicines Agency have both confirmed the safety of the AstraZeneca vaccine, but the damage is done. Even in this country there are reports of people with pre-booked appointments not showing up for their turn. It’s a stark thing to say, but the constant running down of the AZ vaccine by European leaders is having an effect here. People will die as a result.

And on Wednesday the hapless von der Leyen returned to the fray and went back on her promise of a few weeks ago and directly threatened the UK with an export ban. Again, scandalous. She appears not to understand Contract Law. Originally she accused AZ of going back on its contractual obligations. She raided their offices in Belgium. The truth was that the contract was watertight. If it hadn’t been, no doubt there would have been an immediate law suit emanating from the Berlaymont.

This sabre rattling is all about arse covering and skin saving. It’s a lame attempt to portray Britain as the bad cop. European people can see through this. They look at the successful rollout of the vaccine in Britain and compare it to the lamentable efforts of the EU, and they can see quite easily how it has happened.

The reaction of the British government to these outrageous threats from Brussels has been commendably muted. It’s more with sorrow rather than anger. But these are hostile acts, and it is a sign that we can expect more of the same. Britain totally holds the moral high ground here, and it will be interesting to see how this can be turned to our diplomatic advantage.

One thing is for sure: I have lost count of the number of people on social media who were devout Remainers, who now say they regret their Remain votes. I imagine there are plenty of people all over Europe who are now saying that the Brits knew what they were doing and their faith in the EU has been diminished as a result. Who knows what the long-term consequences of this will be for the EU.

– – – – – – – – –

Yesterday my book The Prime Ministers won the Parliamentary Book of the Year by a No Parliamentarian. I think anyone who has ever won an award can imagine how I felt when I heard the news. There’s no panel who chooses this ward in the usual Buggins Turn way, the awards are voted on by MPs and Peers themselves, which makes it even more special.

The book contains 55 essays on each of our 55 PMs, and it’s being announced today that my next book will be in a similar format and look at the 46 US Presidents. That will be followed up in 2023 by one on our Kings and Queens.

The AstraZeneca-Oxford vaccine. A run down of the developments across Europe extreme caution takes hold.

15 Mar

Over the past few months, there have been lots of issues across Europe with the vaccine roll out. From the EU’s difficulties in acquiring vaccines, culminating in its attempt to control exports across the Irish border, to Emmanuel Macron casually deriding the AstraZeneca-Oxford jab (AZ) and causing vaccine hesitancy, it’s been problem after problem. Today there was more trouble on the AZ front, with leaders concerned about whether it leads to blood clots. Without further ado, here’s a round up of some of the developments:

  • Germany has made the headlines today for two reasons. For one, Angela Merkel’s centre-right party, the Christian Democrats (CDU), suffered its worst ever results in two regions it once considered strongholds. The drop in support has been attributed to Germany’s problems obtaining vaccines, and will have huge implications for the CDU’s fate in September’s election. To complicate matters, this afternoon it was revealed that Germany has suspended use of the AZ jab, citing fears that it could lead to blood clots.

  • Soon after Germany’s decision, it was reported that France had also suspended the AZ vaccine. Macron already has one of the most dreadful records in regards to vaccination strategy. He claimed the AZ vaccine was “quasi-ineffective” in over 65s – based on no evidence. With reports of intensive care units filling up in Paris and with France having the world’s sixth-highest total of Covid-19 cases, it is extremely troubling that European leaders are planting more doubt about the vaccine. On Twitter, political pundits did not hold back when speculating about the reasons for Merkel and Macron’s decision to suspend the vaccine.

 

  • But Germany and France are not the first to suspend the AZ vaccine. The Netherlands has paused roll out until at least March 29 for the same reasons (worries about blood clots). In the meantime, the country has had some of the most extreme lockdown protests. Over the weekend, the Dutch police used a water cannon and other shocking methods to control protesters (see the video below). So who knows how much worse this will get with the vaccine roll out being so slow. All of this has happened three days before the country’s election, in which Mark Rutte, the Prime Minister, will stand for a fourth term in office. Unlike the CDU, his party is expected to do well – and build even more seats than it did in 2017.

  • One big surprise is that Italy’s Piedmont region has stopped using the AZ vaccine. This is in spite of the terrible time Italy is having, with it recording 27,000 new cases and 380 deaths on Friday, and going into lockdown. Luigi Genesio Icardi, head of regional health services, stood by Piedmont’s decision, suggesting that suspending AZ roll out was “an act of extreme prudence, while we verify whether there is a connection”. After a teacher died from a vaccination shot, authorities have been trying to find the batch responsible to examine it.
  • Lastly, Austria has suspended the use of a batch of AZ vaccines after a 49-year-old nurse died of “severe blood coagulation problems”, and four other European countries (Estonia, Latvia, Lithuania and Luxembourg) have stopped using vaccines from the same batch. It was sent to 17 European countries and consists of one million jabs.

So all in all, there is still huge scepticism about the AZ vaccine. Are leaders right to stop the AZ roll out? The European Medicines Agency and World Health Organization have both said there’s no evidence of a link between the jab and blood clots, although the EMA is apparently going to advise further tomorrow. In the UK there have been 37 reports of blood clots among 17 million people (and there is no strong biological explanation of why the vaccine would cause a clot). So it all looks slightly strange.

Leaders are using what is known as the “precautionary principle”; a scientific method that means you pause and review something if you’re unsure about it. It’s the ideal thing to do, of course, but the consensus from scientists elsewhere seems to be that leaders need to press ahead given the urgency of the pandemic situation. Suspending AZ can mean that many more lives are lost from the direct impact of the virus. Either way, you get a sense that “extreme prudence” may not have been the right move.

Iain Dale: The EU has no interest in Northern Ireland’s future prosperity. It just sees it as a mechanism to exert its power.

5 Mar

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

Most budgets are curate’s eggs. Good in parts. This one was no different.

Politically, it was a triumph for Brand Rishi. It was well delivered. His post-Budget press conference was slick and smooth. He comes across as a transparently nice and competent individual. That’s because he is.

But was it a budget with a narrative? Was it a “reset” budget? Was it a transformational budget? No, it was not.

It is possible to argue that it couldn’t be anything else than be a budget for the short term, given we have no idea where we will be this time next year, but even if you accept that argument, it disappointed on a number of levels.

The super-deduction measure was innovative and will have a massive event on investment over the next two years. And then it ends. It’s too short term, and should have surely been tapered.

Did corporation tax really need to be increased in one go by six per cent in two years’ time? Wouldn’t a gradual approach have been better, even if you accept it needed to rise. Which I do not.

It’s a tax rise which will inevitably make this country less likely to attract the levels of foreign inward investment in the long term. You can’t argue one day that lowering business taxes is a good thing and makes us more competitive, and then argue that by putting up corporation tax by a quarter still means that we are just as competitive.

Leaving the EU certainly gave some companies pause for thought about locating here, or increasing their presence here. We are lucky that most decided to go ahead anyway, but we do not need to give any company an excuse not to do so.

We may still have the fifth lowest rate of corporation tax among G20 countries, and yes, as Sunak argues, our rate will still be lower than in American, Canada, France, Germany and Italy.

But I’m afraid that argument cuts little ice in a world where the last thing the British government needs to do is do anything to put off businesses considering building a presence here.

Having said all that, two snap opinion polls show that the public approve the Budget with only 11 or 12 per cent disapproving. So from a political point of view, it was job done for the Chancellor. But I still wonder whether a bit more long term, “reset” thinking was needed and that both Sunak and the Government might come to regret that it was largely absent.

– – – – – – – – –

If the pandemic hadn’t happened, surely this Budget would have been all about the post Brexit economy. Brexit wasn’t mentioned directly once in the Chancellor’s speech, although towards the end we heard a few oblique references.

What we needed was a pathway to the future, not just over the next couple of years, but over the next couple of decades. We needed a vision.

Businesspeople needed to be reassured about the future of our trading patterns, not just with the rest of the world, but with the EU. Too many businesses seem to be finding that the so-called “free trade agreement” with the EU is nothing of the sort. The inevitable bureaucratic teething problems in trading with EU countries are still there, two months on.

OK, there are no queues at Dover, but the attitude of (particularly, but not exclusively) of French customs officials leaves something to be desired. I hear time and time again reports that countries deal perfectly happily and efficiently with the US, China or even Russia, yet find it that deliveries to European customers are being returned to them by couriers with no explanation and on multiple occasions. They feel powerless to do anything about it.

And don’t get me started on the Northern Ireland protocol, whose only effect so far as I can see has been to effectively annexe Northern Ireland to the EU. Just as Martin Selmayr threatened.

The EU has no interest in Northern Ireland’s future prosperity. It just sees it as a mechanism to exert its power. It is a constitutional outrage that British companies are not free to trade without restriction to all parts of the sovereign United Kingdom. The checks that are now being demanded by the EU are so disproportionate as to be totally unreasonable. The British government bent over backwards to make a compromise to meet EU concerns that the Single Market could be compromised, but its goodwill has been exploited at every turn.

At some point this has to stop, and the unilateral extension of the grace period is the inevitable consequence of EU inflexibility. It is not, as the Irish government unhelpfully says, a breach of international law. What it is, is a sign that Britain’s patience with the EU on this issue is about to expire.

– – – – – – – – –

I’ve been watching a new documentary on how Donald Trump won the 2016 presidential election called The Accidental President.

It’s made by the British film maker James Fletcher, who is now based in New York. Fletcher will be familiar to many for his work filming David Cameron for the WebCameron project back in the day.

It’s a fascinating account of Trump’s rise to the presidency. There was no narration, no voiceover, just 90 minutes of original campaign footage together with lots of testimony from political commentators, eye witnesses and vox pops.

The most powerful moment was when commentators were asked to name Trump’s campaign slogan. They all trotted out “Make America Great Again”. They were then asked for Hillary Clinton’s campaign slogan. None of them could recall it, bar one, who recalled it was “Stronger Together”. He then followed it up with “whatever that means”.

If proof were needed that political slogans can be all powerful, then we now have it.

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.

Anthony Browne: Why the UK’s fall in GDP is not the worst of the G7, but in the middle

13 Feb

Anthony Browne is MP for South Cambridgeshire and a former Europe Editor of the Times.

There is no doubt that the UK has suffered a severe economic hit as a result of the pandemic, but just how bad? In particular, is it true, as opposition politicians claim, that we not only have the worst death toll in the world, but also the worst economic slump? The short answer is: no.

Yesterday’s headline figure from the Office of National Statistics shows a fall in real GDP of 9.9 per cent in 2020, the largest in history, and certainly the largest among the major economies. There may be particular underlying economic reasons we are worse hit, such as that our service-based economy is particularly dependent on people being able to meet, compared to countries that are more dependent on manufacturing and mining. But the more significant issue is that we calculate our GDP in a different way from other countries, actually following what is usually agreed to be international best practice but is rarely followed.

We have been taking evidence about it at the Treasury Select Committee, and I asked the deputy national statistician to provide internationally comparable measures of GDP. The evidence provided by the ONS to the TSC shows that if you do that, it turns out we are no longer the worst hit in the G7, but right in the middle, with a decline smaller than that of Canada, Italy and Germany, but larger than Japan, France and the US.

The fundamental issue is that the UK measures the public sector from its outputs (eg how many hospital visits, how many school lessons) not from the inputs (money spent), which is what other countries normally do. So when we carry on paying for the public sector but close a lot of it down, then we show a decline in output but other country’s don’t. This does not affect the measurement of nominal GDP (ie in current money terms), but only when it is adjusted to create “real GDP” which supposedly has the impact of inflation stripped out. That real GDP is normally used for international comparisons, but because of the extraordinary circumstances of the pandemic, it is presently highly misleading. The ONS letter to the TSC said: “Current Price or nominal estimates of GDP are not affected and therefore more internationally comparable”.

So what happens when we look at the internationally comparable figures? For most countries, there is little difference between real and nominal GDP. But because of the UK’s methodology, there is presently a huge difference: the decline in real GDP is more than twice the decline in nominal GDP. In particular, from the Q4 2019 to Q3 2020, the UK suffered an official 8.5 per cent decline in real GDP, but only a 3.5 per cent decline in nominal GDP. That is less than Canada and Italy, with declines of over four per cent, and Germany with a decline of just under four per cent. As the ONS puts it: “while the UK’s performance on the volume measure is the weakest, the current price measure puts the UK in a more comparable position.”

None of this makes any difference to businesses, many of which are genuinely suffering a real crisis or have already gone under. I absolutely don’t want to play down their difficulties. But it does mean that opposition politicians are wrong when they say the UK has the worst record in the G7 in its economic response to the pandemic. Despite being harder hit by the pandemic, large doses of government support have meant that our economic hit is in the middle of the G7.

One last thought: if you want to stick with the real GDP figures that makes our slump look exaggeratedly bad by international comparison, then when the system goes into reverse, real GDP figures will make our bounce back look particularly strong. I look forward to opposition politicians congratulating the Government on that.

David Gauke: Ten years for lying on a form. Misguided, disproportionate – and characteristic of our cavalier approach to sentencing.

13 Feb

No one is going to be sentenced to ten years imprisonment for lying about where they have travelled from. Such behaviour might be reprehensible and, in the current circumstances, it may be justifiable to make it a criminal offence which, on occasion, may need to be punishable by imprisonment. But ten years – on a par with threats to kill, non-fatal poisoning or indecent assault – is evidently disproportionate. Even Michael Ellis, the Solicitor-General, who is not exactly a signed-up member of the awkward squad, has let it be known that he questions the “credibility” of the sanction.

I make this point not as a sceptic of measures to control the spread of the virus nor as a critic of Matt Hancock. Some of his Parliamentary colleagues appear to take out their frustration at the existence of Covid-19 and all that this entails on our way of life on the Health Secretary. Implicit in some of the criticisms he receives is the view that, if only someone else was in charge, we would all be going about our business unimpeded by lockdown restrictions. This is obviously nonsense.

On the big issue about the need to suppress the virus until a vaccine became available, Hancock got it right. Not everyone in Government can make that claim.

Nonetheless, the proposed maximum sentence is far too long. It also revealed an attribute that is not unique to one Minister or one government but which has been prevalent in our politics for nearly 30 years – a cavalier approach to sentencing policy.

Before making my case, let me set out some data. When I was Justice Secretary, I asked for information as to how large our prison population was compared to other European countries. For every 100,000 people in in the Netherlands, 61 were behind bars. In Denmark it was 63, in Germany it was 76, in Italy it was 99 and in France it was 104. In England and Wales it was 139.

This high prison population is a relatively recent phenomenon. In 1993, we had approximately 45,000 people behind bars. Fifteen years later, we had reached 83,000, which is roughly where we have been since (the current exceptional circumstances has resulted in a fall to 78,000, but is forecast to rise rapidly over the next few years).

The increase in numbers has not been driven by higher levels of criminality, but by tougher sentences. Speak to experienced judges, and they will tell you of how someone who would have been sentenced to five or ten years in the 1980s would now get ten or 20 years. Our prison population has risen not because there are more criminals or that more criminals are getting caught, but because our criminals are locked up for longer.

Quite right too, many will say. Longer sentences tend to be very popular. Even this week’s announcement polled well – 51 per cent thought it ‘about right’ and 13 per cent thought it ‘not harsh enough’, according to YouGov. That does not make it a good policy.

We have to ask ourselves, when it comes to increasing the time people are imprisoned for any offence, why we are doing it. The first argument is deterrence, but there is little or no evidence to suggest that, say, the threat of ten years in jail is more of a deterrent than five years.

The second argument is about incarceration protecting society from reoffending. But, again, the evidence tends to be weak to support this (and, by and large, the more serious the offence, the less likely the chances of reoffending).

The third argument is about society articulating its feelings of repugnance at particular behaviour by the severity of the punishment. I certainly do not dismiss the need for our criminal justice system to reflect our shared sense of outrage over particular crimes. This is a legitimate factor in determining sentencing policy. However, as a society, in recent decades we have become noticeably keener to articulate our feelings of repugnance.

This process often starts with a targeted announcement that applies to only a small number of criminals. To give an example, a minimum sentence of 30 years for murder involving firearms or explosives was imposed in the 2003 Criminal Justice Act. This applies, thankfully, to very few cases but it made the minimum sentence for knife murders look low, so that increased from 15 years to 25 years in 2009, after a high-profile case. And then when it comes to determining the appropriate sentence for other offences – such as attempted murder, or grievous bodily harm, or possession of a weapon – judges will take that minimum sentence for a more serious crime as a reference point.

Consequently, we have a ratchet effect. There is a high-profile crime; there is tabloid outrage over the leniency of a sentence, the Government increases the maximum or minimum sentence for that specific crime, sentences for lesser crimes increase accordingly – by which time many offenders face a longer stretch and the prison population rises yet further.

I am acutely aware that trying to step off this escalator is enormously difficult. In my own time as Justice Secretary, I tried to resist routinely inflating sentences for serious offences, rather than going as far as trying to reverse the trend for the previous 30 years.

Instead, I focused on trying to keep minor offenders out of prison. These are people who are frequent offenders where the focus has to be rehabilitation. Prison – with the inevitable disruption to family life, accommodation and employment – makes that much more difficult. The evidence points to non-custodial sentences being much more effective in reducing reoffending. Politically, there is widespread support for such an agenda and – although my policy of scrapping most short prison sentences has been dropped – there is very good work being done by my successor, Robert Buckland, and prisons minister, Lucy Frazer on this front.

Nonetheless, the Government’s Sentencing White Paper, published in September, as well as containing many excellent policies on matters like Community Sentence Treatment Orders, also contains a long list of measures that will mean sentences become even longer.

No doubt these poll well – even better than locking people up for ten years for giving inaccurate information as to their recent holiday travels – and those who will face lengthy imprisonment are deeply unsympathetic individuals.

There is a constant pressure on Ministers to be seen to do something, to demonstrate their abhorrence at criminality and to take the side of the victim. But where does this end? If – when faced with an individual crime that cuts through to the public or a crisis that requires the creation of a new criminal offence – the reaction of Ministers is always to impose a yet more draconian prison sentence as a form of virtue signalling, or to win a political arms race, sentences will become disproportionate, our prison population even more of an outlier and the burdens on the taxpayer (assuming we want a secure and humane system, which we should) unsustainable.

Yes: ten years for lying on a form is a bad policy. But this is not the first time that a misguided and disproportionate sentencing policy has been set out in order to liven up an announcement and show that the Government is being tough. And it certainly will not be the last.

Ryan Bourne: How many lives will we save by choosing our own vaccination programme, not the EU’s? Let’s start at nine thousand.

3 Feb

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

Delay is extremely costly in this pandemic. When the post-mortems are written, lethargy will rank high on the list of consequential policy mistakes. With a rapidly spreading virus, procedural bureaucracy or a failure to grease the wheels for vaccine rollouts will be found to have cost tens of thousands of lives in each advanced country, alongside incalculable damage to livelihoods.

As I explain in my forthcoming book, Economics In One Virus, governments have certainly spent big on testing, tracing, and vaccines. But the sums are piddling in comparison to the amount allocated for economic relief.

The latter is demanded by voters, but it would have been wiser to put more funds into paying over-the-odds to encourage vaccine manufacturing scale-up, to overcome bottlenecks, and to facilitate around-the-clock rollout as soon as vaccines were ready. This would have handsomely paid for itself in a more rapid economic normalisation, not to mention the lives saved. As economist Alex Tabarrok has written, this was the easiest cost-benefit analysis in the world for policymakers. When the inquiries begin, governments will lament their relative stinginess on spending where it mattered most.

As of writing this on Monday, the UK’s vaccine rollout performance is improving still, of course, with nearly 600,000 jabs registered Saturday and England’s figures for Sunday up 45 per cent on the week. It might seem a bizarre time then to lament that we didn’t go quicker still. Yet two months after the first vaccine was approved, still only around 14 per cent of the public have received at least one dose. While the manufacturers and the NHS are (understandably and heroically) pulling every lever given where we are, we will surely regret in future not having had an Israeli-style mobilisation in place.

That’s not to say the UK’s performance has not been *relatively* impressive. The dexterity of the MHRA in understanding the trade-offs associated with the approvals process puts the US to shame, as that country stalls on approving AstraZeneca’s vaccine despite tens of thousands of Americans dying per week. The UK government’s willingness to stump up more cash has exposed the false economy of the EU’s haggling over pennies in contracts too.

For the costs of delay are exacerbated by the way this virus and the vaccines operate. An infection might take three to four weeks before it manifests as a death. Vaccines themselves take a couple of weeks before they are high efficacy. So now we see the consequence of the relative lack of acquired protection for many elderly people in mid-January. It is only in the next three to five weeks that we should start seeing the big vaccine-induced falls in mortality, if indeed vaccines really do have near the 100 percent touted effectiveness in preventing deaths.

The Covid-19 Actuaries Group (CAG) believes that if the Government delivers on its eminently achievable target of vaccinating all over-70s, care home staff, frontline health and social care workers, and the clinically vulnerable, by mid-February, daily Covid-19 deaths will fall by two-thirds by the end of the month. By the tail end of March, deaths should be down 86 percent against a world without vaccines. So one can understand the angst inside the EU—their tardiness in getting vulnerable populations vaccinated will cost lives that will be all the more observable if British trends go as expected.

How many extra deaths have we avoided through our speedier rollout? Calculating the exact magnitude is extraordinarily difficult. Lockdowns and tier restrictions perversely lower the immediate “lives saved from vaccines,” because without them more people would have been exposed. Working out how many lives the UK will save compared to the EU in the coming months is also muddied by not knowing the eventual speed of each country’s vaccination program or the underlying prevalence of the disease for the nations.

But comparing the UK to France, Germany, Italy and Spain (the EU-4) gives us an idea of magnitudes. These countries have only vaccinated between two and four percent of their populations respectively, and are currently vaccinating at a rate of 0.11 to 0.12 percent of their populations per day.

The UK has vaccinated 14 percent of its population, and is currently vaccinating over 0.55 percent of its population per day. If extrapolated forwards, the UK would vaccinate its four priority groups once by mid-February. The EU-4 would achieve the same proportion of population dose numbers by mid-to-late July. Indeed, even if the EU-4 were suddenly able to up their daily vaccinations to UK rates from now, they would not hit the same number of doses as a proportion of the population as the UK’s February target until early March—three weeks behind.

My calculations based on the Covid-19 Actuaries Group report suggests that, if the vaccine is 100 percent effective in eliminating death, the UK has already seen around 1,300 fewer deaths as a result of vaccines. Given the lags discussed between infections and deaths, as well as the time it takes for vaccine efficacy, this is almost certainly close to 1,300 more lives saved than would have been saved had we been as tardy as the EU.

Projecting forwards to how many lives are being saved from the recent and current vaccinations is more difficult. We have to try to model what cases and deaths would have looked like absent a vaccine. We would also need to know how fast the EU vaccination program will become, something that I profess no knowledge of.

But, for illustrative purposes, let’s assume that, absent a vaccine, deaths would otherwise have fallen through February and March as a pure reflection of how they rose in December and January. Under this scenario, the UK has already locked in 9,000 fewer deaths through mid-April than if it had moved at the EU-4’s vaccination pace to date (saving 20,000 lives overall). And that’s assuming the EU-4 countries wake up tomorrow and suddenly match the UK’s speed.

Realistically, of course, some of the EU-4 are not planning to widely vaccinate for a month or two, while they are sticking to the regimen of two doses sooner that will leave fewer people on the Continent protected in the near-term. So, it’s very safe to say the UK will have saved tens of thousands of additional lives relative to going at the EU-4’s pace over the coming months, with the gap especially dramatic if the EU does not up its game in the very near future or if, as a result of vaccinations, the UK then relaxes its lockdown restrictions. The costs of delay in public health and economic terms are clearly enormous.

Travel and the virus. Ministers face some of the hardest decisions yet as they plot UK’s next course.

25 Jan

Tomorrow, the Government faces an extraordinarily difficult decision: what does it do about international arrivals, given the increasing threat of new Coronavirus strains?

Since the “UK” and “South Africa” variants were discovered, ministers are understandably fearful about other mutations getting into the country, which could undermine progress – and, even worse, prove resistant to the current vaccines.

This is why the Government has already taken the bold step of banning travel from South America, Portugal and many African countries, due to concerns over new and potentially more infectious variants.

But there are bigger questions for the Cabinet’s Covid operations committee, tasked with deciding the future travel policy, which will meet on Tuesday.

For instance, does the Government go ahead and stop all travel, as Israel has recently done? The idea once seemed unthinkable, but on Friday George Eustice, the Environment Secretary, said the possibility of a full UK border closure had been “considered”, and it’s understood that this will be tabled tomorrow.

A more likely eventuality, however, is that international arrivals have to quarantine at hotels, organised by the Government but paid for by themselves – which has been the case in Australia, New Zealand and Thailand.

The detail missing is who this measure applies to, with Matt Hancock and Priti Patel reportedly wanting all arrivals to quarantine – whereas Grant Shapps and Rishi Sunak are apparently pushing for a more selective policy, only applied to high-risk countries.

Given that Patel recently said she had argued for closing the border in March – an idea that now has considerable endorsement – she may find herself winning this argument.

A widespread quarantine policy does mean, at least, that all countries are treated as potential threats, in terms of having mutant strains of Coronavirus, which is better detected by those with more advanced levels of genomic sequencing. 

As we’ve seen before in the crisis, Coronavirus can come from regions that are least expected (in the first wave, many worried about China, whereas it was travel from Italy, Spain and France that had the most impact). 

However, as Sebastian Payne points out in the useful thread below, quarantine for every traveller would also be a huge logistical challenge for the Government, whose plan ultimately relies on the number of people coming to the UK reducing, as they’re put off by the cost and effort of self-isolation. (And if that does not happen, matters will become even more complicated).

Furthermore, some say it’s simply too late to put in this measure, especially with travel at its current level. All it takes is one person to spread a new variant – already there are 77 cases of the “South Africa” Coronavirus variant in the UK, for instance. That’s before we get to risk from goods being transported in and out of the country (is it a coincidence that the UK variant emerged in a county with a major port?).

All of these areas will enter the decision-making process tomorrow, much of which is a sad paradox of the UK’s success as an international travel hub – and in essence a trade-off.

If the Government does too little it may find itself dealing with a mutant strain that’s more damaging than the immediate economic hit of banning travel, or using the hotel policy.

Too much, and the Government may find it has destroyed an industry – while being unable to trap new variants.

It is worth saying, however, that when the Government has stepped up its measures in the past, they have aged well. As I wrote last year, in July there was huge uproar about its 14-day quarantine rule – which now seems completely accepted.

Either way, no one can envy the choices that have to be made.