Covid-19: Government response divides pensions community
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Was the UK’s approach to the pandemic too ‘laissez-faire’ at the start? Was the concept of herd immunity miscommunicated or plain wrong? And will the £350bn rescue package for the economy be able to soften what looks to be a most painful crash landing?
The government’s response to the pandemic is the only topic that has split respondents to mallowstreet Insights’ Covid-19 survey. Of 56 respondents working for pension funds and their advisors and providers, only half (53%) were satisfied with the government’s handling of the pandemic.
The crisis response by the newly elected government has divided the community, with 35% saying they are dissatisfied, in part due to the UK’s approach having been out of kilter with that on the continent.
Country comparison has become a favourite sport
Access to news from around the globe means each country’s reaction to the virus can be compared, and thus different responses are, in the interest of politics or fear, often pitched against each other. ‘Are we getting the best possible response?’, ‘Can we trust our government?’, ‘Our government/health system is better (ultimately because ‘we’ are better)’ etc.
Whilst health is the immediate concern, the survival of the economy is almost as high on the agenda. The government is offering to inject £330bn into the economy, a whopping 15% of GDP, in the form of liquidity support through the Bank of England and loan facilities, as well as a further £20bn in business rates relief and grants.
The mallowstreet survey was conducted before this gigantic support package was unveiled on Tuesday; it is difficult to see that pension funds would argue with it. Whether it will be enough to save jobs and businesses is to be seen – how this further mountain of debt will affect the financial system longer term is another question again.
European nations are unprepared
The responses from European governments on the health front are all, on the whole, somewhat confused, showing a total lack of preparedness. Western nations have not been in a situation like this for 102 years, and so there is no ‘best practice’ of dealing with pandemics in an interconnected world; only time will tell what has worked and even then, it will not always be clear whether a specific measure was the real cause of any slowdown in the spread.
Widespread testing is viewed by many as key, as this is what South Korea and others have been doing, places which had been affected by SARS in 2003 and have brought this new type of coronavirus under control relatively quickly, showing once more that preparation is everything.
With about 8,400 confirmed cases, Korea had just 84 deaths; in the UK, as of Wednesday there are 60 deaths for just under 2,000 confirmed cases, which could mean the actual number of infections is much higher – but without tests, there is no certainty.
Despite testing being seen as crucial elsewhere, at the time of writing, Public Health England promoted self-isolation for those with symptoms and their families or flatmates without testing. There is also no programme for testing NHS staff, who are in contact with the most vulnerable people – and are themselves exposed to the highest loads of the virus.
But the government has now said testing capabilities are being ramped up from 5,000 to 25,000 a day, in an unspoken acknowledgement that medical staff are too valuable to leave untested. NHS staff, including community services, could be redeployed to carry this out.
Social distancing v herd immunity
The current advice to stay away from public places marks a further U-turn in the government approach and puts it closer in line with that of other nations, but not completely. As well as Italy, Paris, Austria and Switzerland, Norway and Denmark are in lockdown. Germany and Poland have closed their borders, and the European Union has also shut its outside borders for a month – a move cynics might argue was motivated with more than just health in mind, although Europe looks a much less attractive place now than it did just a few weeks ago.
The UK and, to a lesser extent, Sweden are seen by their European peers to have adopted a lax approach. People in countries further ahead on the infection curve have little sympathy for any staggered measures or changes in approach – lockdown is now perceived as the only right answer, although infection rates in Italy, which introduced this measure first, are still not slowing down – on Wednesday, 3,500 new cases were reported. Questions about the proportionality or sustainability of lockdown are swept aside as fear has spread even faster than the virus.
But the UK government has arguably confused many with the way it is tackling the virus and communicated its measures. Just a few days ago, it suggested that herd immunity was desirable, which is achieved when at least 60% of the population have antibodies, meaning vulnerable people would in future be less at risk – a strategy that can have its merits and is being applied with less harmful infections, including chickenpox.
Not long after the idea of herd immunity was criticised by some scientists, the government changed tack, adopting an approach of social distancing to minimise transmission, realising how much strain the former approach would put on the NHS in the short term.
The changes in approach are motivated by modelling which shows in no uncertain terms that the NHS couldn’t cope with an exponential increase in cases. The NHS has little or no slack in the system, having been starved of funding in the past, and so any increase in emergency and intensive care patients could push up death rates – just why this was not taken into account previously is a question that will certainly be asked once the pandemic has subsided.
But there could also be questions about proportionality - should the economy be crashed and education be stopped for a small percentage of infections? The topic could continue to divide the nation for some time to come.
What is your view on how the government has been handling the pandemic?