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Health vs. the Economy: A False Choice

Boris Johnson is framing the Covid-19 debate as 'health vs. the economy' – but his government's approach to this crisis has helped neither, and nor will recklessness in easing the lockdown.

At a recent press conference, Health Secretary Matt Hancock insisted that ‘there just isn’t a trade-off’ between health and the economy. His statement reflects mounting pressure from the Tory press and voices in his own party to accelerate the lifting of lockdown restrictions.

The cavalier attitude of anti-lockdown agitators to both facts and human lives is remarkable. In an interview with the Telegraph, oncologist Karol Sikora – who has faced accusations of fabricating his academic credentials and has attacked the NHS as ‘the last bastion of communism’ – argues that the official death toll numbers should be halved because victims would have died soon anyway.

Retired supreme court justice Lord Sumption makes the same point in the Spectator: ‘The overwhelming majority would have died. A bit later, but not much later.’ In the absence of a vaccine, he argues, the only options are indefinite lockdown or immediate full reopening.

Since the former is untenable, he says, the lockdown should be lifted. But the premise that we face a binary choice is transparently false – as the experience of countries such as New Zealand demonstrates. With the right policies – and under some circumstances at least – Covid-19 can be effectively eradicated from a population. 

The common thread among lockdown opponents is their determination to downplay the bleak human cost of coronavirus. According to the Financial Times, nearly 65 thousand people have died in the UK: for every thousand people alive at the start of the year, one has lost their lives since the start of the outbreak. Johnson’s delay in imposing lockdown has cost tens of thousands of lives. It has also made the task of lifting the lockdown far more difficult.

Acknowledging the human cost of Covid-19 does not mean ignoring the economic effects. We are in the deepest recession since records began. Businesses are going bust and workers are being laid off. The unemployment rate could exceed 10 per cent. Millions more jobs are likely to be lost in August when employers have to start paying national insurance contributions for furloughed workers. 

Policymakers do face a short-term policy trade-off: an immediate bounce in GDP figures could be achieved – at the price of more deaths – by lifting the lockdown and abandoning social distancing regulations. But this would not lead to a sustainable economic recovery.

Many people will not return to their previous spending patterns while the threat of infection remains. The UK economy is highly dependent on ‘social consumption’ – bars, restaurants and leisure activities such as cinemas and live music. Likewise, employers may not comply with instructions to reopen if they don’t regard it as safe to do so – many schools simply refused to follow the government’s recent directive.

The virus itself, not just the lockdown, is a central cause of the economic collapse. In Sweden, where lockdown was eschewed in favour of a herd immunity strategy, GDP is projected to fall by 10% and unemployment is projected to rise to between 9 per cent and 13.5 per cent.

Historical evidence points in the same direction: during the Spanish Flu epidemic of 1918, cities which enacted more restrictive lockdown policies experienced stronger economic recoveries when lockdowns were eased. Johnson’s delay in locking down is likely to be the policy failure which causes the greatest long-term economic damage.

The government’s endlessly-repeated claim that it is ‘following the science’ reinforces the misleading ‘health versus economy’ dichotomy. Scientific research provides policy-makers with some understanding of the trade-offs they face and some indication of the degree of uncertainty over these trade-offs, but it is up to policy-makers to make decisions based on such understanding.

Navigating a route to the ‘new normal’ is therefore a more complex policy challenge than imposing lockdown. A sustainable route out of this crisis requires policy that safeguards both health and the economy as far as possible given these trade-offs. Johnson has so far failed on both counts: the UK currently has the second worst per-capita death rate after the US and it looks likely that we will also see the greatest rise unemployment in Europe.

Given how badly the government has mishandled the crisis – from the delay in imposing lockdown to the Cummings debacle – there is no cause for optimism. The logistical challenge is immense: which sectors of the economy should open and in which order? How should policy support those sectors that cannot reopen yet? How can schools be comprehensively reorganised to function with social distancing? How should a national track and trace system be implemented? Which sectors are strategically important and deserve long-term state support, and which are no longer viable and should be wound down while minimising the pain felt by the workforce?

A hard right government that was elected on the basis of a single deliberately misleading policy pledge – ‘Get Brexit Done’ – is unlikely to boast the managerial capacity this challenge requires. Cabinet members were selected on the basis of their ideological commitment to a hard Brexit, rather than any deeper merits. 

In truth, Johnson is not interested in debates about ‘health versus the economy.’ His government has protected neither, and there is little reason to believe it will do so now. A long-term strategy to control Covid-19 and exit the lockdown is desperately needed. Instead, we face the purgatory of economic depression, recurring coronavirus flare-ups and daily death reports.