Coronavirus - how has the UK done? (Part 2)

          This is part two of a blog on the result, the outcomes as best we can measure at the moment of how our government has responded to the developing Coronavirus pandemic. If you haven’t read the first part, this may make little sense. By way of an introduction, I’m considering the outcome of the decisions made against a very singular metric – how many people died in the first 5 weeks of the crisis. More information on why has already been covered. But before you go any further, there should be some warnings around limitations of data. I have compared the UK as broadly comparable to 4 other countries on this metric. But no two countries are identical, although they are all developed European economies with similar social structures and demographics. Additionally, I am using the best statistics available to me. These are not perfect and in the future better understanding will come of the comparisons. But that won’t be reported in the news.

            Now I have got that out of the way, what does the metric show us?

Country	Deaths per 1,000 population in first 5 weeks
UK	0.38
Spain	0.37
France	0.29
Italy	0.26
Germany	0.05

            On this basis, the UK has had worse results than other European neighbours in dealing with the virus. I have already looked at two areas that governments could impact: Health service capacity and resilience; and speed and scope of social distancing measures. In both cases, mistakes were made. Those mistakes have almost certainly cost lives. But the other things I want to consider in this blog were provision or Personal Protective Equipment (PPE) and testing strategies for Coronavirus.

            Provision of Personal Protective Equipment

            As previously mentioned the UK had planned for an epidemic such as Coronavirus and how our healthcare system would cope. It was called Exercise Cygnus and took place in 2016. The results of the exercise have remained classified. However, at the time some information did come out, via we must assume approved news, from the Chief Medical Officer. They were stark warnings. In the event of a flu pandemic the UK would be short of three things: ventilators, PPE and capacity to dispose of bodies.

            This led to a lot of planning by NHS England. Top of that list was that NHS Trusts needed to be better prepared. We needed more PPE. We needed more ventilators. We needed a better way to properly look after those who died. In order to put this in place the NHS needed something that was becoming increasingly short. It needed the money to buy these things. No extra funding came from the government. NHS chief executives were left with an obvious choice really. As budgets became more and more restricted due to austerity and government set targets were missed and services and trusts started to fail financially. Use the budget you already have to try to keep services running now to the best of your ability OR spend that budget on the possibility of a future pandemic. Which would you do?

            Coming into this crisis we did not have enough PPE. This was because the Conservative government of the day chose not to provide any more funding. Interestingly a lot of media outlets sympathetic to the conservatives have tried to blame this on NHS executives. I find this hard to swallow and incredibly low. What were they meant to but it with? Hope and charm?

            PPE is incredibly important because, as Italy found out very swiftly, without doctors and nurses you can have a surplus of ventilators but no-one to run them if they too have caught Coronavirus. In this country we are rightly proud and protective of our NHS. It is truly a shining example of socialism working. In fact since the start of UK lockdown measures we have had a weekly round of applause for our NHS workers. Everybody feels and knows it implicitly in this country. We rely on and owe the NHS and its staff so much.

But this must include that we owe keeping them safe where possible. Even for those who don’t believe in the NHS it is a simple equation in a time of pandemic – fewer healthcare professionals mean each of us is at greater risk. Therefore PPE to keep them safe must be paramount. What did the government do when they knew more money was needed to pay for PPE a WHOLE 3 YEARS AGO? Provided no additional funding. Who have media outlets tried to blame? NHS executives. In June of last year a governmental body again warned the government that there was no stockpile of PPE and this left us open to the threat. The government again did nothing. We should be rioting in the streets over this betrayal. Once it is safe to do so, obviously.

What is just as heinous is the handling of this shortage by the government of today. It may be the same party, but you can possibly see the argument of “it was different ministers then”. As soon as this happened our government should have done everything, and I mean everything, in its power to source additional PPE. Surely at least they have done that?

On March 25^th, when the howls of outrage were starting to really wing out and hit the politicians in Westminster, Boris Johnson said this:

“On the personal protective equipment the answer is by the end of this week.”

That is the sort of bold, definitive promise that we all want to hear from our politicians. Measurable, reassuring, no nonsense. More media coverage followed to reinforce this determination. And by the way, this promise was not JUST that the NHS would have the PPE it needed. This was a promise that care homes as well as the NHS would have all the PPE needed to keep staff safe. In fact Matt Hancock was able to trumpet that 997 MILLION items of PPE had been handed out. Outstanding delivery.

Except, of course, that the target wasn’t met. The truth is that a survey by the British Medical Association (who know a thing or two about healthcare and PPE) on the 18^th April – 3 weeks later found that half of doctors working in high risk of infection areas reported a shortage of PPE. The situation is far, far worse in the overwhelmingly privatised care sector. The Royal College of Nurses has told members that as a last resort if there is insufficient PPE they can refuse to treat a patient. Just pause and think about that scenario. 

And it is not as if getting PPE right now is an easy thing. There is a worldwide shortage. Every country is trying to source PPE of the right type. Well, every country except those who planned in advance and built a stockpile when told to by medical experts, obviously. We, along with other countries need billions of items of PPE. And PPE covers a wide variety of items. It must be the right PPE for the right use.

What about the almost 1 billion items distributed? Well, it turns out that of those 1 billion items, 50% of them were surgical gloves. So that leaves 500 million items to cover masks, gowns, eye protection etc. Oh, and the gloves were not pairs. They were individual gloves. Now, unless Doctor Richard Kimble was on to something and there are a fuck-load of one-armed men running around the NHS individual gloves are a mis-counting by any standard. Still, ignoring that the Secretary of State for Health tried to pull the wool over the eyes of the public on that particular topic, there must be a reason we are doing so badly.

For many of us, we would possibly focus on supply chain problems. 36 individual companies, many of whom are specialist manufacturers of PPE, have complained that they have approached the government but been ignored. This is not that surprising for people who have had involvement with government procurement. The government didn’t sign up to a European-wide initiative to buy PPE because, using the official language, of a “communications error”. How much communication is involved? “Would you like to join?”, “Yes please”. But as it turns out, if you believe the government’s own line there is another culprit.

The focus for the Secretary of State’s commentary on the shortage? That doctors and nurses are using too much of it. Yes, that is right. It is not the fault of a government that failed to stockpile despite being told twice to do so. It is not the fault of a supply chain that everyone knows is failing in lots of places. It is the fault of the same doctors and nurses who Conservative politicians are out on their doorsteps applauding every Thursday night. The same NHS staff who have lost over 100 colleagues to Coronavirus. How many of those would still be alive with the correct PPE?

Testing for Coronavirus

At a press conference in front of the world’s press on the 16^th March – 5 days before the UK went in to lockdown – the Director General of the WHO made it clear. The most important tool, in their view, to arrest the spread of the disease was:

“Our key message is: test, test, test”.

Now, that is easier said than done. For a start, that means that you have to have the capacity and capability – including the right resources – to actually perform testing. Quite simply, the UK had never needed to have that capacity before and was unprepared. It would be easy to accept this as an obvious rationale for why we didn’t test more. I am not a scientist or healthcare professional. I can’t tell you what chemicals, equipment and laboratory space is needed to perform these tests. Not many people are. Of course, this explanation falls down when you look at a very close comparison.

Germany, who had cases around the same time as the UK, were able to implement track and trace testing and target community transmission. They were able to ramp up their testing from none to 500,000 tests a week in the first two months. Not only that, but they used a system of track and trace. Anybody who tested positive was isolated, their contacts ascertained and isolated and tested. Any who were found positive - their contacts ascertained and isolated and tested etc. etc. By focussing on positive tests and then targeting outbreaks in this way Germany has managed to have, based on the measure I have used, had far and away the best outcomes. Similar results have been seen in other countries who have taken this approach. South Korea is a good example – but they had suffered because of the MERS outbreak a number of years ago. They had experience and new what to do. Germany copied their approach. For some reason, we didn’t.

To put into context the differences, by the time Germany had capacity for 70,000 tests a week, the UK had increased capacity at the same time to 5,000 a day. Hardly comparable.  Not only that, but on March 13^th the government made the decision to stop testing for Coronavirus outside of hospitals. Consider that for a moment. At a crucial point in the battle, when we had evidence to compare from different countries on which strategies worked best, we chose to stop following the most effective one. In fact even the Chief Scientific Officer, Deputy Chief Medical Officer and the Security Minister have all accepted that this was a mistake and we could have had better outcomes if we had ramped up testing much more quickly. The question that must be answered then is why? Why didn’t we increase testing capacity when other European countries were able to? Why did we stop track and trace when we did? Even Italy – who were held out as an example of what not to do – had managed 2.2 million tests by the end of April – 1.5 times what the UK had managed.

The Prime Minister himself appeared to understand how important testing and testing capacity was when he promised in early March (when testing was around 5,000 per day) that this would be ramped up to 25,000 and then 250,000. Of course, he never gave a timeline for this but this shows clear intent. Does this mean it was ineptitude rather than ignorance that led to our woeful testing regime? I would hope that any inquiry would look at that – but I wouldn’t hold your breath for an inquiry to hold a Conservative government to account. If you are still able to hold your breath that is.

Obviously, the government would need to explain this. On March 31^st the daily government press briefing made it clear what the problem with increasing testing was. There was a global lack of the chemical reagents needed to perform the tests. This was hampering the UK effort. Which makes me wonder – why didn’t Germany have the same problem? What had they done that we hadn’t? After all, they are only a short hop over the North Sea (or Nordsee coming the other way). What did we fail to do or what did they succeed in that we didn’t.

As the clamour and cry got louder, and the original target from the Prime Minister was forgotten, a truly unusual and remarkable thing happened. The government set a target for the number of tests to be performed, with a deadline attached. The target was that 100,000 tests per day would be delivered by the end of April. This sort of thing – a government giving a way to be held to account – seems like a novelty. The politicians we have had for 30 years or more have been far too clever and sneaky to do this. Was this finally some honest politics?

It would be refreshing to think so. Unfortunately, I think this has been the very opposite. And at the time, it must have seemed a very astute thing to do. Matt Hancock gave himself 28 days from the 2^nd April to get the number of Covid19 tests up to 100,000 a day from 10,000 a day at the time. Increasing our testing ten-fold over the space of a month. A definite and gargantuan effort that would be admired when it was achieved, surely? Or does it raise more questions and hide a multitude of sins? Firstly, why 100,000 tests a day? There is no scientific basis for this, no magic limit we must pass as a country to get back in control. Even that capacity would be only 20% of the testing capacity Germany had mustered to get in control of the disease.

Why then? 100,000 a day from 10,000 a day. Amazing. Of course one of the other things that a statistic like this and a target like this does is focus your mind. But to focus you on one thing means that you are no longer focussed on other things. Even if they are more important. This target meant that people no longer focussed on the number of people tested IN TOTAL. Or on which groups got priority testing. That means that the news isn’t reporting on the fact that by the 28^th April the UK had still only tested 763k people IN TOTAL compared to Germany’s 2,547k – or one third as many. Or that we had carried out less tests than Italy, Spain and around the same as France on 724k. So whilst we were focussing on tests per day, we were still falling behind in total. One problem with this measure you might argue is obvious – that those countries have different populations. Actually, if anything, that makes it worse. If we rank order countries by number of tests performed compared to population and add it to the table above:

Country	Deaths per 1,000 population in first 5 weeks	Tests per 1,000 population by 28th April
Italy	0.26	30.6
Germany	0.05	29.1
Spain	0.37	28.9
UK	0.38	11.2
France	0.29	11.1

100,000 tests per day. It may feel like a bold target. But just perhaps it was a clever distraction tool. Of course the reason that politicians very rarely give such targets is simple – if you miss it you might be held to account. But with 28 days surely we would achieve it. According to the government we did. On the 30^th April and the 1^st May the government proudly announced that we had performed over 100,000 tests on each of those days. Well, kind of met it. Because what the Department of Health and Social Care had to do, in order to even meet the target for those two days was not only count tests actually performed, but include tests sent out in the post to people.

Some might argue that this was a reasonable measure. Certainly government ministers were willing to stand behind these figures as evidence of meeting their target. I don’t believe the vast majority of people see it that way. For most of us a test for a disease does exactly that. It isn’t that you have received a test kit in the post. It is that something has been carried out that will tell the person taking the test whether they are infected or not. We don’t give qualifications to people because they are in the exam hall. They must be tested. Once that target had been set, there was no way that the government could miss it. No matter what, they would find some way to be able to say they had. I expected to see queues of military personnel that day lined up to be tested. Nice to know that the government found a cheaper and easier way to lift the tests performed figure of 80,000 above their magical threshold.

Even if you are convinced that the government met that target – it was for two days only. Since that point it has failed for 5 consecutive days to repeat it. Quite simply, anyone who would believe they hit that target and it had an impact has been conned. The language of the latest announcements is all about the targets for testing “capacity”. But having capacity and actually testing are not the same. I have the capacity to reach a million readers. The fact that it is more like 300 is a much more telling statistic. This is another broken target.

Looking at the metrics on number of deaths, where does that leave the assessment of how we have done? It isn’t great. We now have the highest death toll in Europe as of the 7^th May – even though other countries have tested more so should have higher confirmed deaths than us. In fact we have the second highest death toll in the world – behind the USA. Of course, that is if you accept that China is reporting the correct figures. Even if they aren’t – that still makes us the 3^rd highest. With 1 & 2 having many multiple times our population. When you look at the levers and controls our government had, and how they were deployed, it isn’t hard to see why. Looking at this crisis it appears that at every step the government have been more focussed on looking good rather than doing good. We can only hope that they pay for that at the next election.

Coronavirus - how has the UK done? (Part 1)

          If you are a conservative politician, particularly PM or a cabinet member, then today must feel like a victory. Finally, managed to hit a target in relation to Coronavirus. One set only a month ago. Surely this shows that this government means what it says and now Boris Johnson PM is back in charge everything will turn out alright? As a voter who wanted them in power, who thinks that a Labour government would have been far worse, this must feel like vindication.

          Well, if you believe that, then I have a genuine Picasso to sell you, guvnor. Honest. Boner Fidey it is. What we have seen during this crisis is some masterful propaganda. Genuinely a masterclass in managing the public perception. Because, based on what information we have at the moment, we have fared worse than almost any other country in terms of our response to the challenges of Coronavirus. This is not just based on opinion or preference or political leanings. We, as a country and as a society, have lost far more people, suffered more death than we ever should have done according to the latest death tolls.

          That may seem like a bold statement, but it is based on the available statistics. Ultimately if we are going to compare countries, then this needs to be based on the outcomes – how fatal or damaging this virus has been. That is a really difficult thing to measure, but the consensus appears to be to use fatalities from Coronavirus (whilst we wait for the data to be considered in more detail over a longer period). The obvious comparisons against the UK are other European states. Proximity, similar socialist outlooks (i.e. healthcare, schools, sick pay etc.), access to world travel, genetically, social / ethnic mix, etc.It is worth saying up front - the data is not complete yet. Nor is it all directly comparable. In fact no two countries are the same in their demography or how they collect and report statistics. In time, there will be long statistical and research studies performed that will produce that information. But by then it will be ignored. The only limited defence that I can use is this - if we compare against 4 other countries that the OECD (and others) regularly compare us against as being similar, this should mitigate some bias. The changes of all 4 being incorrectly reported IN THE SAME DIRECTION are vanishingly small. 

          What do the available statistics tell us? Well in the UK in the first 5 weeks of Coronavirus impacting us (i.e. since we started recording 10+ deaths per day) there have been 26,097 reported deaths. From a population of 68 million. That means we have seen 0.38 fatalities from Coronavirus per 1,000 population. In Italy, over the equivalent first 5 weeks, that was 15,887 deaths against 60m (gives 0.26 per 1,000 population). In fact, if we look at number of deaths for similar size European countries, they are easily to tabulate. Simply put, we have seen a greater number of deaths than any country in Europe on that basis.

Country	Deaths per 1,000 population in first 5 weeks
UK	0.38
Spain	0.37
France	0.29
Italy	0.26
Germany	0.05

Based on information collated by Statista.com

         
          So, we can’t argue otherwise – we have the worst outcomes in the early stages of any comparable European country. Yes, statistics are tricky, and there may be under-reporting or other issues. But there is no reason to believe that these issues would unfairly treat us compared to 4 other countries all with the same challenges. Why? Why have we done so badly compared to other countries? Particularly given when we have, according to international comparisons one of the best healthcare systems in the world?

          There are lots of news articles calling out specific activities that did or didn’t happen that, frankly, I am going to dismiss. Whether your feeling is that Dominic Cummings should not have sat in on meetings of the Scientific Advisory Group for Emergencies (SAGE), or that Boris Johnson should have been present for the 5 Cobra meetings that he missed, whilst these may show the method of operation of this government, they really can’t account for the difference in death rates. In fact, many people would argue keeping Boris Johnson away from making decisions is probably helpful rather than a detriment. I instead think we should be focussing on 4 key areas that do seem to have made a difference to the success of different countries in reducing the death toll. They are:

• 1.    Speed and scope of social distancing measures;

• 2.    Ability to increase capacity of health services;

• 3.    Provision of Personal Protective Equipment (PPE); and

• 4   Testing for Coronavirus.

I don’t want to spend time going in to why each of these is important in the fight. After all, since the start of this crisis the people who were previously constitutional experts on Facebook have re-trained as virologists it turns out. But the world over these 4 tools or levers (along with track and trace as a fifth in some countries) have been the available actions open to governments to use. I am going to consider the first two in this blog (part 1), and then look at the second two and the media management in part 2.

Speed and scope of social distancing measures

In the UK, by the 5^th March we had breached the figure of 100 confirmed Coronavirus cases (it was 114 on that day). It seems a reasonable starting point for comparisons to be taken against other countries. To put some context around it, by then we had seen Italy (which reached that milestone on the 23^rd February) in clear trouble with an explosion in number of cases that was already threatening to overwhelm their health service – by the 5^th March this had turned in to 4,000 confirmed cases. By the 10^th March, this had turned in to 10,000 confirmed cases in Italy (along with 631 deaths). Our government knew that this was a problem, and one that required urgent action.

It is both surprising and appalling then that we did not initiate the social distancing measures we now see until the 23^rd March. That is 18 days when the government failed to take action to implement social distancing that had been seen to work in other countries and that scientists were saying was our best action at that point in time. 18 days. In that time period alone over 3,000 more people had been CONFIRMED as having been infected in the UK – when the rate of infection was doubling every 2 days. 359 people died from it in that period. Quite simply our government acted too late.

There has been lots of speculation and accusation as to why that is. Certainly, interviews given in the early to middle part of March by ministers and officials suggest that at that point the government was working to a “herd immunity” strategy. This changed very suddenly around March 18^th – when this was dismissed by (amongst others) Matt Hancock MP – the Secretary of State for Health. But why the sudden (apparent) change? Because the whole concept of herd immunity was rubbished by the science. It wasn’t something you could aim for; it was something that might be a side effect of not acting enough and letting lots of people die. But this wasn’t new scientific thinking – this was always the case. 

A fair challenge then, is why are there no members of SAGE coming out to say that the government ignored their advice? Every government minister who has given press conferences or updates, from the very outset, has stuck to the line - "we are being led by the science" or "we are following the advice of the scientists". Surely we should be raging at SAGE for giving such bad advice? 

This ignores a fundamental and very important aspect of scientific advice. Scientists provide answers. What they don't do, in this setting, is ask the questions. It is quite simple really to use the questions to lead your response. If you ask "What is the best way to reduce deaths and keep people safe from Coronavirus?" to a group of scientists you will get one set of answers. If you ask "What is the best route to take to manage Coronavirus whilst protecting the economy?" or "What steps will we be able to implement quickly on Coronavirus without worrying the public?" or many other, well you get very different answers. It is a very clever way of deflecting the blame from yourself as a government. We are being led by the science. What you never add is that the science is being led by you. 

What questions the scientists were being asked to opine on can be guessed at. But we don’t know, and right at this moment that isn’t important. What does matter is that because Boris Johnson’s government left it so long more people have been infected, and more people have died.

Ability to increase capacity of health services

One of the most worrying things for anyone following the news during the early days of this crisis was watching the health services of European countries struggle and collapse under the pressure. Countries worst hit by this phenomenon were Italy, Spain, and Portugal. There are a number of connecting themes for these countries – that are shared with the UK. The specifics of the Coronavirus mean that to reduce death tolls (amongst patients) requires 3 things – ventilators (along with the specialist spaces in hospitals); doctors; and nurses to run those beds. It is really that simple. Because we don’t yet have a really effective treatment regime or a vaccine the only thing that health services can do is treat the symptoms. Beds, doctors and nurses.

The common thread that runs through those 3 countries is that they were all hit hard during the last financial crisis, and that they all suffered from long, drawn out austerity plans that reduced the capacity and capability of their health services. They are 3 of the 5 “PIIGS” economies that were most impacted (the other 2 were Ireland and Greece) and faced the deepest cuts. Quite simply government spending on healthcare had been slashed in those countries in the run up to the current crisis. In fact, spending had fallen in Portugal and Spain and kept flat in Italy.

Why then didn’t we see the NHS facing the same catastrophe? This is a mixture of a number of factors, some historic and some based on government actions. The NHS has seen – over the years of Tory austerity – a marked reduction in growth of spending on it. The statistics and budgets make it very clear that since 2009 the NHS has not had the same level of government support it had previously enjoyed. This is not a point that can be argued. Certainly, we now spend more than we previously have, and this rises every year. But it is not rising in line with the historic trend. Our government is constantly tightening what is spent on health services.

Thankfully, historically we have invested in health services more than other countries. This has meant that because of a higher starting point even though we have faced similar or greater cuts due to austerity our health service is still amongst the best in the world. And you get it for free – at the time of writing this. We haven’t yet been dragged down to the level of care that the government appears to be heading towards over the last 11 years. 

Additionally, one thing that the NHS did very quickly that other countries hadn't gotten right was to immediately limit the scope of all other services provided. In particular "elective" procedures. To give an example of an elective procedure, these include knee and hip replacements, removal of cataracts or fitting of leg-braces. I am not a clinician, and these decisions must be led by what is needed. What can be mentioned is that this decision has one other helpful effect. The government hasn't met it's target for elective procedures for the last 8 years (having previously met it or been close since the introduction). At least this time next year they have a reasonable explanation for it. Is it too much to expect that this will be the end of that measure?

In addition, the government was able to, at very short notice, set up additional centres to help deal with any overspill by utilising NHS and military (along with civilian contractor) resources. The speed at which these were made ready and operational is a testament to the excellence of our armed forces and the NHS. Thankfully the planning for this sort of threat had been done well in advance. In 2016 there was a 3-day exercise on how the UK would cope with a flu pandemic. The findings from that exercise were stark. And unfortunately, many were not listened to. We have known for a number of years that we needed a stockpile of ventilators and PPE. But the government never spent the money to acquire them.

We did have the plans drawn up to increase the number of available beds. In fact, these plans were immediately put in place. The army and NHS managed to set up the Nightingale centre in an unbelievable amount of time due to their hard work. It has so far treated 51 patients in it’s 4000 beds. It wasn’t needed in the end, because the NHS in London worked brilliantly to manage the surge in numbers. Time may yet tell, and this may be a prescient decision. We may face a second surge in cases. Or we may face a double crisis when the flu season starts if we haven’t gotten a vaccine. As a much wiser man than I said “I would rather be looking at it, than looking for it”.

In addition, it made excellent news when it was opened, and really, isn’t that all that matters? Again, what was needed, much more than the beds themselves, was a good media story to placate the media. When this is over, hopefully there will be an enquiry – one aim should be to understand how the NHS pulled off the seemingly impossible, and another should be to work out why the hell we didn’t implement the learnings of our disaster planning exercise.

That doesn’t finish this blog – in fact this is only halfway. In part 2 I want to cover PPE, testing and media management. Because it seems that a lot more time has been spent considering media management than any other aspect.

You can't trust Labour on the economy (Part 2)

One of the most often repeated claims you will hear from Conservative party supporters is that you can't trust Labour on the economy. It is a message that has been repeatedly pushed by large parts of the media for many years. In fact, it has been heard so often it sometimes seems like it as is obvious as gravity, Liverpool football club struggling against smaller teams or that you can't get a decent cup of tea in a coffee bar. If you missed the first half of this blog, it might be worth visiting ( http://unexpectedsocialist.blogspot.co.uk/2016/01/you-cant-trust-labour-on-economy.html ) - although I am not guaranteeing it is worth visiting. In that I set out 3 major tests of whether an economy is working - a good economy would be one where: 

1. any growth in the economy benefits those who work for it;
2. it provides opportunities for everyone to participate and add to the economy whilst;
3. providing a reasonable level of protection from external shocks to the national economy and individual shocks through changes in circumstance

I also asked how we could know if we could trust a party to deliver either of those. To be as fair as possible, I have split this down into 3 governments we can compare - that of the previous New Labour administration, that of the current coalition & Tory government, and a future potential Corbyn government.

So going back to our central question - are the Conservatives any better than New Labour at getting people to participate in the economy? And would Corbyn be any better than that? 

Looking at the immediate headline statistics this seems obvious and clear cut. We are told every month now that employment figures are at a record high, unemployment at a record low. Obviously, the Tories win this hands down. But it doesn't take much scratching of the surface to get below that and see that it is not quite as it seems. 

The headline rate is shockingly good - 74.4% employment rate. This means that 74.4% of the people who could work are either employed or self employed. This is the highest since records of this sort began. Under the last Labour government, just before the global economic crash in 2008, the best they achieved was 73.0%. 

That 74.4% equates to (between 16 and 64) 30.67 million people either working or self employed. For the New Labour government, at it's highest point, this was 29.06 million. So there are 1.6 million more people employed compared to eight and a half years ago. But just being employed is not the entire picture. What is also important is how much you are earning for that employment. Because it is this - your income - that determines how much you can participate in the economy. In that case, we are doing slightly worse. In fact, average earnings (which excludes self employed people) are down by 3%. So more people are working, but earning less than before. 

What is causing this? Well, whilst it is hard to reach a really strong conclusion, there are some really good candidates for part of the explanation.

Firstly, the national minimum wage has not increased quickly enough. This had slowed down until then Chancellor George Osborne made some moves to re-dress the imbalance he had caused. Secondly, almost the entire public sector has had pay freezes or raises limited to 1% for 7 years. The public sector workers are carrying the rest of us through austerity. Third, there are more immigrants now in the country - willing to work for much lower wages - potentially around 800,000 in that period. Finally however, and this seems to have had the biggest effect, is the rise of the zero hours contract. 

Since the last Labour government 700,000 new jobs have been created where those people have no guarantee week to week, day to day, hour to hour. The number has gone from 200,000 to 900,000. What was once a flexible way for employers and employees to work where this arrangement suited both parties has become the standard operating model for hundreds of employers. The coalition and tory government have done nothing to stop this. If you aren't on one of those contracts - just imagine what that is like. You never know if you are going to eat or pay bills - and you can't work anywhere else. It is as close to modern day slavery as most of us will ever get. 

So whilst employment has gone up far fewer people are actually able to participate in the economy in a meaningful way. We all on average have less to contribute with. And the increase in employment figures can almost entirely be matched to inwards net immigration and zero hours contracts. So whilst we had increasing spending power and jobs under the Blair / Brown governments, we have not seen this under a tory government. But what would we see under a Corbyn government?

Well, that is hard to say. If we believe the promises made as part of his election campaign, there would be increases in the minimum wage, an end to zero hours contracts, pay rises for the public sector and real genuine investment by the government in major infrastructure projects - and the aim would be to increase employment rates through this. Of course the challenge for any future Corbyn government will be how to pay for these. This ties in to managing to deliver without destroying the economy and leaving it protected from shocks - but that will be part 3 of this blog.

All we need now is Spandau Ballet

              I am sat writing this the evening before the first full budget of our 2nd Tory chancellor of the last 20 years, Philip Hammond MP. We have now had a full 6 years of Tory chancellors - even if for 5 of those they were supported in Parliament by a weak and ineffective coalition partner in the Lib Dems. So, it is probably worth looking at how well those Tory chancellors and governments have done for us. By us, I mean the great British working classes. I include in that those of us lucky enough to be working, and those of us who for whatever reason can't or aren't working at the moment. It is also right and fair to measure those chancellors against what they set out as their own priorities. After all, it is not fair to only measure them against things they never promised to do.

              Like most economists (and other political writers) it would be really easy for me to fall into jargon and measures that most people don't understand. Who really feels GDP, deficit, debt ratios? Whilst I want to steer clear of these as much as possible - they are necessary to consider. Mainly because these were the measures which George Osborne and then Philip Hammond have measured themselves against. But there are other measures that they feed into - and these do matter. These are how well-off we as individuals feel, and the future prospects for the economy. As well as these, there are other factors that matter - how well funded and effective our public services are; how much tax we pay and how many of us are in gainful employment.

              Coming into power in 2010 was never going to be easy for any government. The world was still reeling from a financial crisis, caused by global banks, that was as severe as The Great Depression. This was impacting pretty much every country - though some worse than others. In the UK because we had bailed out the banks here we had a massive public sector debt (the amount the government owes) that had risen from under 40% to around 65% a the time of the General Election. This was the worst of all worlds - it was driven by an increasing amount of debt from bailing out the banks, a shrinking economy and a growing deficit. The deficit or surplus is the difference between how much the government is earning (basically through taxation) compared to how much it spends (on services for the people). 

             So whichever Chancellor came in had to do one (or all) of 3 things - grow the economy, reduce the deficit and / or reduce the overall debt the government had. The prevailing idea from George Osborne (and presumably supported at that point by the public) was to reduce the deficit, within 5 years, and thereby start to pay down the debt levels. Surely we could return to surplus? After all, we had run a surplus for the overwhelming majority of the Blair years, after the deficit laden years of the Thatcher government. This therefore gave rise to the austerity agenda - the aim being to reduce how much the government spent to get in line with what they earned. 

             But the Tories also inherited a number of other problems and benefits at that time. For example, we had an NHS that was the best in the world, as proven by a number of international comparative studies. This was not only in terms of the service provided, but also how much it cost to provide. Gone were the days of waiting on trolleys in corridors. We had improved standards across schools. Whilst not all of the policies used were particularly popular, they were, mostly, working. Sure Start and EMA were supported by all parties as right and necessary because of the benefits to social well-being. The unemployment rate however had taken a marked increase - meaning fewer people were working - whilst this had stayed stable around the 5% mark for the majority of the Blair years this shot up as a result of the global banking crisis to 7.5%. This had been a massive improvement - during the Thatcher years it had been between 7.5% and 10% for almost the entire period. 

            So across those areas, how have the Tories done? Well, let's look at deficit and debt reduction, unemployment, amount we pay in tax, and those services mentioned above one at a time. 

Debt & Deficit

Since 2010, the debt as a share of GDP (the most reliable measure) has increased from 65% to 85%. In money terms, these 6 years have added £1trillion of debt. That is debt which our government must now pay back. More worryingly, the deficit is still at 3%. We were meant to be rid of both of those things by now. In fact, neither has been delivered on. We are worse off than we were. 

Unemployment

Here, it appears, we have good news. The unemployment rate has seen a steady downward trend. It has moved from a recent high of 8.5% to 4.8%. We should all be celebrating, shouldn't we? Well, it isn't quite so rosy. 700,000 of those new jobs are zero hours contracts. That is 700,000 people who don't know if they will have work from one day to the next. We may as well go back to the days of the Labour exchange. Workers earnings have not increased - which you would expect from high employment. More people can say they have a job, but more than ever don't have enough money coming in to actually survive. So we must remain cautious if we want to say this is good news.

Taxation

The level of government taxation - ie how much they take out of the economy each year to pay for public services has now increased back to levels last seen in 1986. So whilst they have spectacularly failed to reduce the deficit, they have done that whilst taking more of your money from you. Not only that, but the source of that tax has become far less friendly for you. Much less is being taken from big businesses and wealthy individuals. Instead, more tax is being taken from your wallet, by way of increases in VAT and Insurance Premium Tax. They have openly and actively taken from the poor to give to the rich. A true reverse Robin Hood. 

Public services

Well, Sure Start and EMA didn't survive the first year under the Tories. Our health service is once again falling apart. This winter we had the worst performance during the winter since we started measuring such things. Junior doctors went out on strike - previously unheard of. In education there are experts, councillors (of all parties), headteachers and MPs screaming at the government to address the lack of funding. What it the response of the current government? To instead set aside money for their pet project of grammar schools and free schools. Just consider that, any extra money they find is not going to your child's school - but to open a new one that you have no say over. Teachers are leaving the profession in droves, and recruitment of new ones is drying up. We are back to poor services where only the wealthy will be okay. 

                  So, it is amazing that we find ourselves here again. A government that can't get spending under control, where services are so poor they are a laughing stock, where only the wealthy are benefitting. Things haven't been this bad across so many measures since the early 1980s. Some would argue that there are other similarities - for example a Labour leader who is painted as a dangerous leftie by the media and who doesn't seem either willing or able to shake off the tag. What is worrying is that against this backdrop the Tories are still enjoying electoral success. This really should be a wake up call and warning to the Labour Party. The question is whether they are listening - or repeating the internal fights of the 1980s. Only time will tell. The problem is, how much of a country will we have left at the end of it?

Step right up, now everyone’s a winner, bargains galore.

Thank goodness for Donald Trump and Boris Johnson. There was I, worried that leaving the European Union might in some way be bad for our economy, workers’ rights and public sector, when they come along and show me that everything is going to be OK. Of course it is not just the US. Apparently, countries are queueing up to do trade deals with us. We now thankfully have some greater clarity on what Theresa May plans for her brexit strategy. So, what can we take from her announcement yesterday? And how bright is the future looking for us? Can we get ready for a massive influx of trade we don’t currently have? Is the prospect of a Global Britain better than the prospect of a “Shared Britain” (now removed) or a “Red, White and Blue Brexit” (now removed) or is it just another meaningless slogan?

Really, we need to understand from the speech what we are potentially losing compared to what we might gain. That is the only way we can judge whether we are looking at a net positive or a net negative. This was the most important speech that the Prime Minister has given since we voted for her to be our leader. Only joking of course, we live in a parliamentary democracy where elected representatives are chosen and entrusted to make our decisions for us. Well apart from THAT decision obviously. So, the most important speech since her party voted for her to be party leader and therefore Prime Minister. Only joking, there was no vote for her. So, the most important speech she has given since 35,000 in the borough of Maidenhead voted for her (that’s right Americans, you think you have problems).

I am going to focus purely on the aspects relating to trade and the economy. There was actually some good stuff in there, relating to how the process will run, and also massively important areas around immigration and nationality, borders and governance. But that will have to be part of another blog. So what did we learn? Well the key points were these:

·         All existing rules and regulations of the EU will become British Law and workers’ rights will be protected, then will “keep pace with the changing Labour Market”

·         We will leave the single market, and the customs union then “pursue a bold and ambitious Free Trade Agreement” with the EU

·         We might pay to be a part of “specific European programmes”

·         If we don’t get the deal we want with the EU, we will trade with them without a trade agreement

·         We will seek out new trade deals with other partners that we don’t currently have in place

Keeping existing rules and regulations, and workers protections

                So, depending on your point of view, keeping existing safety and consumer laws is a good thing or a bad thing. It will mean that we can continue to export to mainland Europe because our goods and services will be comparable. But it might also mean that we are held to a higher level of regulation than say US or Chinese manufacturers. Therefore, this could make our products uncompetitive on a global market. So this really depends on whether we get a trade agreement with the EU.

                More worryingly, is the specific language used around workers’ rights. This should be a massive big warning sign to everybody who is employed in the UK. Over the last 6 years the Tories (and their coalition partners) have overseen the stripping away of workers’ rights, and have resisted every opportunity to improve them. For example, even at the height of the furore over zero hours contracts, the government did nothing. Coupled with that our rights to strike have been eroded, weakening our bargaining power with companies. And senior members of the government are openly talking about banning the use of strikes across industries.

                Mrs May could have said that workers’ rights would be improved upon, or strengthened. But the language is purposefully specific. “Keeping pace with the changing Labour Market”. Well, if we look at how the Labour market is changing, more people are being put in to roles where their employers can pretend they are self-employed; employers can give up any sort of responsibility through the “gig” economy; zero hours contracts will become more prevalent; trade unions will be downgraded and weakened at every turn; pensions agreements will no longer be stuck to by employers whilst taxpayers bail out pensions funds. Basically, if you are employed, then this is the start of a bonfire of what rights you currently have. If you are applauding this speech, you are either an employer yourself, or not paying attention. Perhaps somebody could remind me, when we voted for the UK to leave the European Union, where we also voted to give up our working rights to Sir Philip Green and Mike Ashley? I obviously ticked that box without realising.

Leaving the Single Market and Customs Union, getting a trade deal with Europe instead, paying for access

                It is probably worth, as a starting point, understanding what our trade deal within Europe currently means. Firstly, it is worth stating that it is probably the most comprehensive, invasive and wide-ranging multi-lateral trade agreement in the world. It includes everything from free trade (meaning we trade our goods free from tariffs being applied by other countries), customs union (meaning we all apply the same tariffs to goods coming from outside our deal), free movement (of services, capital and resource ie people) and a level of political union too. It covers almost every aspect of trade and commerce, industry and services, import and export. The effort to split ourselves out from it is on a scale unprecedented and untried. It is not simply rhetoric to say it is of the scale that countries leaving the USSR and Eastern-bloc felt during the early 90s.

                So we would be leaving, with great difficulty and cost a free-trading bloc of 450 million people in 27 states (once you take us out of the official figures). It has GDP of US$13tn (again once you take us away from the published figures). It is 41km away from us at the closest point. Those are the really key considerations in any trading deal we want to do: how many individual consumers are there, how wealthy is it, how far away is it, and what tariffs would we expect. It is worth also stating that given the depth and breadth of the negotiations that will be needed, this will (you would hope) require a great deal of considered and careful negotiation. We currently have no experience of trade negotiations, given that we haven’t had to for about 40 years. It seems a reasonable assumption that what experience we can muster together will be focussed on this deal. Two years of effort to LEAVE that free trade deal.

                Of course, it is possible that we could end up with an even better trade deal. However, it is highly improbably. By its very nature, if we are choosing to say to a trading bloc that have grown together “we want to trade with you, but don’t wish to pay in to your structural costs” then it is only reasonable to assume we will get a worse deal than full membership. Even Theresa May accepts that. Hence why the Prime Minister and others have been warming us up to the idea that we will still have to pay something to continue to trade freely in certain markets. I think it is fair to assume this will include the Motor industry (if not, then what the hell have we promised Nissan?) and financial services (given it is our biggest single industry). Of course, that gives us the question of what will the cost be? How much will we have to pay for access? Not only that, does it mean any industry which isn’t beloved of the Tories (Steel, manufacturing, non-financial services) should now expect tariffs to start to affect their business. So there we have it, a deal where we still pay in (when it suits the Tories) and everybody else has their business negatively impacted.

                Not only that, but what if we start imposing our own tariffs on European goods? Well, that will lead to massive instantaneous inflation, whilst at the same time our economy is getting worse. We had this in the 1970s – and the term which was coined was stagflation – a stagnant economy whilst prices rise. It was a horrific time. If you are too young to remember it be grateful, then ask somebody who was around how it felt.

No deal is better than a bad deal, trade deals with other parties

                Of course, we could choose to have no trade deal at all with Europe. However, just the most cursory glance at this shows how completely stupid and damaging this would be. This would mean that we would immediately start trading with ALL of the European Union at WTO Tariff rates. In effect every single item that we export to Europe would immediately be less competitive, and therefore we would either have to sell less OR sell them more cheaply. The idea that no deal is better than a bad deal is complete hogwash – and everybody knows it. God even to export Oxygen to the EU we would have to pay a tariff of 5% - and they breath the bloody stuff (yes, I know, thanks). So this idea that we will go with No Deal is never going to happen. Besides which, in all honesty both parties want to get a deal. It is in their interest as well. It is entirely a PM trying to sound tough for the UKIP-leaning voters in her own party. It is simply within our interest to achieve some deal with Europe (popn 450m, GDP US$13tn, dist 40km) – and it is theirs to do a deal with us (popn 65m, GDP US$3tn, dist 40km).

                What about other deals? We are told by Boris Johnson that countries are “queueing up” to do a trade deal with us. Well, the first consideration is – why aren’t we trading with them currently? If these countries are so desperate to get a trade deal with us, why is that? Well, we already do trade with many of them. But it is at a lower level than perhaps we could. Therefore, any belief that this will lead to a massive influx of NEW trade is again erroneous. What it will do is make trade easier and therefore give some lift to our global trade levels. It might also (if we remove import tariffs) lead to consumers paying less for certain goods. It is way beyond me to be able to state with any certainty what scale the impact would be. But it would need to be very high indeed to offset any major losses of trade with the EU. I am going to leave the US to one side for a moment, but still, let’s pick out some of the options which do look like “live picks” ie countries that are talking about trading with us:

Country	Population	Size of economy	Distance	Comments
EU	450m	US$13.1tn	41km
Iceland	0.3m	US$0.016tn	1,894km
India	1,300m	US$8.72tn	7,194km
New Zealand	4.7m	US$0.174tn	18,500km
Australia	24m	US$1.2tn	17,000km
Canada	36m	US$1.5tn	5,700km
Ghana	27m	US$0.121bn	4,800km
Mexico	120m	US$2.2tn	9,000km
South Korea	50m	US$1.4tn	9,000km
Total	1,562m	US$15.3tn	9,136km average

                So, if the worst happened and we stopped all trade with the EU (which no-one is suggesting, to replace it we would need to trade with these 8 separate economies to get a trading block of the same size. Ignoring the fact that on average that would mean sending goods 45 times further on average to sell them.

                To put it another way, our trade with the EU accounts for 45% of our exports. If we lost a quarter of that export trade – on our doorstep – we would need to boost our sales internationally to non-EU countries by 11%. Unfortunately, our trade with international neighbours is already at record levels for us. What else are we going to sell – at a competitive price after sending it an extra 9,100 km? The very desperately sad thing is, we are already a successful trading nation. Is it really possible that not being part of a customs union with the EU is going to boost our trading with every we currently trade with across the board by over 10% BEFORE the end of the current deal with the EU in 2 years’ time?

                Who is going to negotiate these trade deals? Everyone with experience or knowledge will be working on the EU deal? Or should we leave that to Boris “let’s joke about the Nazis” Johnson? Genuinely? Of course, we have the trade deal to look forward to with the US. After all, we have been promised a trade deal by the President-Elect, a man who never goes back on what he says. Well, he has already threatened to pull out of NAFTA (a free trade deal), and put 35% import tariffs on goods from China and Mexico – 2 of their biggest trading partners and very strong economies. If Donald Trump is looking to trade on those terms with others, why would we believe we would get anything more beneficial?

Everything’s rosy

                There is no hard evidence to say that is all impossible. It may well be that against all odds the government manage to deliver. But for that to happen we would need a massive turnaround in fortunes, in abilities, in industry, in trade patterns and in the views of our own government. At the same time we would need the EU to be kind to us in any future trade deal. Put quite simply, the potential risks are much greater than the opportunities at the moment. I would love to be wrong about this – and I am often wrong. But I see no analysis which suggests anything other than this stark conclusion – by leaving the single market we are throwing away access to a strong market on a really good deal for the possibility of access to less accessible markets, with less good deals. This can only be bad for our economy. 52.1% of people voted for Brexit. But how many voted for an almost certain worsening of our economy, job losses, rights and protection losses, uncertainty and a weaker economy?