Beyond COvid: The Digest

Lockdown

November 3, 2020
SUMMARY
  • Our In Focus section this week analyses the Government's announcement of a second national lockdown and the policy changes needed to protect households and businesses from the economic fall-out.
  • Read our In Brief and Reflections sections for the latest research and analysis around economic recovery and reform Beyond Covid.
  • To get in touch with feedback or suggestions for next week's Digest, email Michael on michael@beyond-covid.org.

In Focus: Lockdown

  • Lockdown 2.0. The UK is set to enter a second national lockdown at midnight on Thursday, marking the latest in a series of government U-turns around its handling of the coronavirus outbreak.
  • Too little, too late. The government has come under fire for its delayed response to the rising infection rate.
  • ~~“Thousands of lives”. Sage scientist and UCL Professor of Infectious Disease Epidemiology Andrew Hayward has said that implementing a two-week circuit breaker (as Sage recommended) in September “would definitely have saved thousands of lives”.
  • A false economy. Anti-lockdown narratives often hinge on arguments around the economic and mental health costs of lockdown. Chancellor Rishi Sunak, for instance, argued in October that we should ease restrictions “to protect economy and our health”.
  • ~~No health-economy trade-off. As highlighted in last week’s Digest, the evidence is that swift action to minimise the spread of the virus is also what is best for the economy.
  • ~~Longer wait means longer lockdown. In part, this is because delayed and weak action to tackle rising infection rates ends up necessitating longer periods of lockdown - with increased economic and health costs. Professor Hayward argued that early action as recommended “would clearly have inflicted substantially less damage on our economy than the proposed four-week lockdown will do”.
  • ~~Cost of unpredictability. The last-minute, ill-communicated and “panicked” nature of the government’s U-turns exert their own economic and mental health costs. The FT editorial board, for instance, has profiled the avoidable costs to businesses of sudden changes in policy direction.
  • ~~The alternative. A group of public health experts have argued that a series of “planned, intermittent circuit-breakers” would allow for businesses and households to plan and would be less psychologically taxing, thereby improving compliance.
  • Furlough continued. The government has decided to extend its furlough scheme to December, with employees still receiving 80% of their pay packet up to £2500 - though employers now no longer have to contribute 20%. The scheme was originally due to end this month and be replaced by the Job Support Scheme (JSS).
  • ~~“Avoidable job losses”. Many furloughed workers have already lost their jobs, in particular young and ethnic minority workers. In part, this unemployment may be attributed to the Government’s "final hour" announcement of its Winter Economy Plan and the original deficiencies of the JSS, which were only corrected in late October.
  • ~~Enough for businesses? Business leaders have warned that an extra month of furlough is insufficient to prevent “a wave of job losses and corporate failures”.
  • ~~Enough for workers? The Resolution Foundation has found that the first wave of furlough pushed 2 million employees below minimum wage, while 1 in 8 furloughed workers have defaulted on a payment, heralding a private debt crisis for lower-income households and calling into question the adequacy of the government’s income-support schemes.
  • ~~Gaps in support for self-employed. The IFS has highlighted how many self-employed people are excluded from the Government’s support schemes and how they are set to be affected by delays in payments and the reintroduction of the “Minimum Income Floor” - a little-known feature of Universal Credit set to be reinstated on 13th November, which pre-pandemic reduced the benefit entitlements of 450,000 households by an average of £3,200 per year.
  • Gaps in the social safety net. Crucially, the economic shutdown will push more people to rely on Universal Credit - “one of the weakest out-of-work income protection schemes among advanced economies”.
  • ~~Solution: minimum income guarantee. The New Economics Foundation proposed a scheme in March that would prevent people falling through the gaps in social security and into deprivation by setting a minimum income floor. The authors of the report now argue the case for its introduction is even greater.
  • ~~Fixing statutory sick pay (SSP). The Financial Times’ Sarah O’Connor has criticised the UK’s “threadbare” sick pay - which is the lowest of all OECD countries - for undermining efforts to control the spread of the virus and for impoverishing low-income workers, and calls for urgent, long-lasting reform of SSP.
  • ~~Migrants excluded. Foreign nationals are more likely to be “key workers” - they make up 20% of the care workforce - but face barriers to accessing social security and public services. IPPR have proposed a number of urgent measures to help protect migrants to the UK and ensure an effective public health response.
  • The importance of retraining. The CBI, TUC and Association of Colleges have all backed IPPR proposals to increase spending on further education to tackle Covid-19 redundancies. Funding for adult education has fallen by over 45% since 2009, which has weakened the country’s social infrastructure and undermines our ability to respond to the unfolding employment crisis. The IPPR recommends college funding be restored to pre-austerity levels and unemployed workers be given cash to retrain.
For more on the processes of outsourcing, privatisation and marketisation within the NHS, watch our panel discussion with Professors David McCoy, Allyson Pollock and Sir Chris Ham.

In brief

  • Feeding hungry children. NEF’s Alfie Stirling appeared on Sky News arguing that the government’s decision not to fund free school meals during the school holidays is a political choice: “one week of food vouchers for 1.4 million children costs the same as half a day of Eat Out to Help Out”.
  • ~~IPPR called for "a family stimulus" to boost the income of hard-hit families through the social security system and target investment in childcare. [Sky News coverage here]
  • “Living in the doughnut is humanity’s overriding goal.” In a first-of-its-kind declaration, former President of Ireland Michael D. Higgins has endorsed Kate Raworth’s Doughnut Economics approach “without flinching from its challenging implications for future GDP”.
  • ~~Bloomberg profiled doughnut economics and suggested "the coronavirus pandemic might turn out to be the catalyst for weakening our fixation with gross domestic product”.
  • ~~Annie Quick explained the progress and blindspots of wellbeing economics on NEF’s blog.
  • “Fiscal stimulus is fiscally responsible.” The IMF’s Chief Economist has called for an internationally-coordinated fiscal push to escape the “global liquidity trap”, highlighting the limits of monetary policy.
  • ~~"The IMF is failing poorer countries." NY Times Economics Correspondent Peter Goodman has criticised the IMF and World Bank for their Covid-19 response.
  • ~~“Modern-day colonialism”. Danisha Kazi wrote for Positive Money on how the sovereign debt crisis faced by the world’s poorest countries exacerbates unequal and racialised power relations.
  • ~~We examined the dissonance between the IMF’s pro-spending narratives and their imposition of austerity on countries in the Global South in our previous Digest.
  • Eat Out to Help… Covid-19. Thiemo Fetzer published new research suggesting Eat Out to Help Out was responsible for 8%-17% of new infection clusters in August. [Summary here]
  • BoE to change market neutrality? Positive Money’s Executive Director, Fran Boait, featured in a Bloomberg Podcast on the Bank of England’s ‘market neutrality’ principle, where the Bank’s Governor Andrew Bailey hinted at including environmental criteria.
  • Procurement scandal. The Good Law Project circulated leaked government documents “proving the existence of special pathways by which ‘VIP’ and ‘Cabinet Office’ contacts could be awarded lucrative PPE contracts at the height of the pandemic - and at inflated prices”.
  • Data governance. Economist Diane Coyle wrote for the Ada Lovelace Institute on commons-based models for data governance.
  • Economics and Human Rights. The Center for Economic and Social Rights (CESR) released a new briefing envisioning what it would mean to build an economy based on human rights, with partners Christian Aid.
  • Digitalisation and wellbeing. The House of Lords Covid-19 Committee has launched a new inquiry into the wellbeing effects of “living online”. (Call for evidence here.)

Reflections

  • Across the pond. E3G’s geopolitics experts have explored how the outcome of tonight's US election could impact European & Chinese approaches to climate policy the future of global climate cooperation.
  • Paying for the crisis. Economist Daniela Gabor debunked the narrative emerging around high levels of government borrowing.
  • ~~Dimitri Zhengelis explained how to reduce public debt through investing in sustainable economic growth in our webinar on Green Recovery. [Full video here].
  • Colonialism. Maya Jasonoff wrote for the New Yorker, asking: “How did the British become so blinkered about their nation’s imperial history?”
  • Business beyond ‘purpose’. Anna Fielding wrote on the inadequacy of ‘purpose’-led efforts to move beyond shareholder primacy and the structures that prevent meaningful change in corporate behaviour.
  • Food. Common Wealth’s Adrienne Buller wrote for Novara on the fragility of our food system and its role as a driver of both alienation and environmental breakdown.
  • ~~IPPR’s Environmental Justice Commission called for evidence on transitions to a healthier, fairer, more environmentally sustainable food system.

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