Deaths from Covid-19 among residents of care homes show a tenfold increase in the two weeks to 3 April, yet even this may be a considerable underestimate. Melanie Henwood explains that, while there will likely be an overall under-reporting of deaths during the pandemic, this is particularly marked with deaths that occur outside hospitals.

The grim accounting of the daily death total from Covid-19 continues. On 10 April, the daily UK figure climbed to 980 – the highest to-date – surpassing the highest daily deaths experienced in Italy and Spain which had been seen as the most severely impacted European countries. There has been some decline in daily deaths since, but it may be too soon to take any comfort from this or to see it as the start of a plateau.

However, the officially recorded Covid-19 deaths reported each day are only part of the picture as they are deaths that occur in hospital, and do not include any in the community or those in residential and nursing homes. There is growing concern that not only do the overall figures underestimate the actual deaths, but that they do so because they ignore the plight of people living and dying with the condition outside hospitals. It is important to know the full picture, not least because deaths in the community are both under the radar and have the potential to rapidly escalate. But it is also vital to address these wider deaths because they disproportionately impact on the oldest and frailest people, and to ignore them devalues the significance of those lives.

Evidence has been accumulating through social media commentary, but also through expert reporting, that the situation in care homes should be a matter of huge concern. In part the circumstances reflect the wider issues afflicting social care practice, particularly the shortages of Personal Protection Equipment (PPE), that have been widely identified. If care staff working in the community and in care homes have inadequate PPE, the potential for the infection to spread between people is enormous. Official reporting of the numbers of people dying in care homes from Covid-19 is increasingly being seen as a significant underestimate, and we may be looking at just the tip of the iceberg.

The data reported by Chris Whitty, the Chief Medical Adviser, on 13 April stated that there had been outbreaks of Covid-19 infection in one in seven care homes in England, and there were 237 deaths in care homes in England and Wales in the two weeks up to 3 April. But data from major providers of residential care paints a much worse picture: HC-One and MHA together operate 3% of care homes nationally, but have documented deaths of 521 residents in recent weeks.

This is not to argue that there is a conspiracy of silence or deliberate covering up of the evidence, although those views will become increasingly prevalent if the situation is not addressed. Yet it is apparent that the data collection and reporting are inadequate and likely to give false assurance that numbers are significantly lower than the reality. The Office for National Statistics (ONS) publishes provisional weekly registered deaths in England and Wales, but these figures are published 11 days after the week ends. Data up to 3 April 3 was released on 14 April and includes a breakdown of the numbers of deaths “where Covid-19 or suspected Covid-19 was mentioned anywhere on the death certificate, including in combination with other health conditions.” Between 20 March and 3 April in England and Wales, the number of Covid-19 deaths recorded in care homes rose from 20 to 217, a tenfold increase; deaths associated with Covid-19 occurring in hospices rose from two to 33; and those at home in the community from 15 to 136. Over the same period, those Covid-19 deaths recorded in hospital increased from 501 to 3,716. The total deaths from all causes recorded in that week – 16,387 – show an ‘excess mortality’ of more than 6,000 above what would normally be expected for this week of the year. Some 3,475 are directly associated with Covid-19 (according to death certificates), but in reality, many more may be.

There are good reasons to conclude that the numbers of Covid-19 deaths being recorded outside of hospitals are considerably underestimating the actual figures. International evidence is beginning to emerge, and analysis by the International Long-Term Care Policy Network across five European countries indicates that “care home residents have so far accounted for between 42% and 57% of all deaths related to Covid-19.”  If there is inadequate testing of both staff and care home residents for infection, it is obvious that recorded deaths will also underestimate the true figures. Care England (the representative body of independent care providers) has estimated that the number of care home deaths already is nearer to 1,000; around five times higher than the official ONS figure.

It is not just deaths that are important here, it is also about the care and conditions for people who are dying in the community. Increasingly, it is being reported that GPs are not visiting care homes and that residents who become infected (or suspected as being infected) will not be taken to hospital. With PPE shortages not only does this increase the risks that infection will sweep through residents, but that people will die in homes that may lack the expertise and experience to support people dying in respiratory distress. The experience for residents, and the associated trauma of staff trying to support them, are awful to contemplate. An open letter sent to the Secretary of State for Health and Social Care by the Alzheimer’s Society, Marie Curie, Age UK, Care England and Independent Age sets out the issue:

We’re seeing people [in care homes] being abandoned to the worst that coronavirus can do. (…) they are told they cannot go to hospital, routinely asked to sign Do Not Resuscitate Orders, and cut off from their families when they need them most.

This issue is about the numbers – about the transparency, completeness, and reliability of the data recording deaths associated with Covid-19, and where those deaths are happening. But more than this, the big issue is what the data – and who decides what is measured and reported – tells us about how the incidence and experience of death from Covid-19 is regarded. All deaths matter; deaths of the frailest and most vulnerable citizens should be viewed as equally sad. The argument that people have ‘lived their life’ or ‘would have died anyway’ is poor comfort for those dying alone, afraid, and in considerable distress. Deaths in hospital from this epidemic are shocking; those occurring behind the closed doors of care homes, hospices, and in people’s own bedrooms, are the untold and apparently largely unrecorded tragedy.

About the Author

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Melanie Henwood is an independent health and social care research consultant.

LSE Blog

Neoliberals will soon forget their hour of need and will want a return to the past. People must organise to obstruct that return.

Neoliberalism has been the dominant ideology of the western world for the last 40-50 years. Its proponents sought the destruction of the state and limit its capacity to do their bidding, which included deregulation and cuts in hard-won social rights for people.

For neoliberals, markets, privatisation and commodification of everything was the answer rather than building a just society to enable everyone to live a fulfilling life. They portrayed public services as a burden on taxpayers rather than a social investment. Since 2010, a much lower proportion of the gross domestic product has gone to the National Health Service. Thousands of nursing vacancies remained unfilled. The government imposed wage freezes on public sector workers to give tax cuts to corporations and the rich. The government policies made a few people rich but most people struggled to make ends meet.

The light-touch regulation reduced HMRC’s resources. Banks, accountancy and law firms excelled at devising complex tax avoidance schemes. Billionaire Sir Philip Green’s BHS used intragroup transactions and a labyrinth of opaque offshore companies to returns to shareholders. The major shareholder in BHS was Monaco resident Lady Green and she was not liable to any tax upon dividends and other income from BHS. Green was not alone. Sir Richard Branson, resident in British Virgin Islands, operates through a maze of offshore trusts and corporate structures. He is a self-confessed ‘tax exile’ and his businesses such as Virgin Healthcare have paid no tax. The above are just the tip of an iceberg which has depleted the public purse and possibilities of investment in social infrastructure. Every year HMRC fails to collect around £34bn-£35bn of taxes due to avoidance, evasion and errors. Other studies estimate the amounts to be between £58.6bn and £122bn a year.

The folly of the above haunts the UK. The government imposed a lockdown to control the spread of the deadly virus and most business activity came to a halt. Markets and tax havens have not bailed out anyone. The richest 1% of people in the UK owns the same wealth as 80% of the population, or 53 million people, but the rich have not bailed out anyone. Only the state is providing support for employees, the self-employed and businesses. Billionaires such as Sir Philip Green and tax exile Sir Richard Branson head the queue seeking taxpayer funded bailouts for their business empires. Only the hollowed-out state, underfunded public services and public purse now stands between neoliberals and economic oblivion.

Rich neoliberals are holed-up in their big mansions and private islands, but the daily risks of providing essential services are being borne by some of the most poorly paid people. These include nurses, paramedics, midwives, radiographers, care assistants, shop workers, refuse workers, delivery drivers, and postmen. Some of the lowest-paid public sector workers at HMRC and the Department of Work and Pensions are trying to get aid to people.

Neoliberals have long regarded anyone claiming social security benefits as scroungers. They have been content to see Statutory Sick Pay fixed at derisory £94.25 per week. We all remember how Ian Duncan Smith, former leader of the Conservative Party, boasted that he could live on £53 a week in benefits. With the spread of coronavirus, many middle-class neoliberals are facing the possibility of living of £94.25 a week and they don’t like it.

Some 42% of the UK adults survive on an annual income of less than £12,500 and draw little sympathy from neoliberals. The current national minimum wage for workers aged 25 and over is £8.72 an hour, which translates as £1,500 a month and the Institute for Fiscal Studies thinks it is too high. The government has responded to middle-class anxieties by fixing the wage subsidy, from the public purse, at maximum of £2,500 a month. This begs the question why the national minimum wage is set well below that level. If £2,500 a month, or £30,000 per annum is required for a decent life, how can society condemn a large proportion of the population to live on amounts less than that.

The UK is estimated to have around 320,000 homeless and successive governments have done little about it. With concerns about the spread of coronavirus infections, central and local government agencies have managed to house all of them. It just goes to show what can be done.

Neoliberals will soon forget their hour of need and will want a return to the past. People must organise to obstruct that return. The state needs to be mobilised to ensure that homeless people are never again thrown out on the street. Investment in public services and healthcare must be seen as a public good. Inequalities need to be reduced by checking tax avoidance and taxing wealth and redistributing the proceeds. Everyone needs a decent minimum income and the current minimum wage and social security benefits are not enough. A universal basic income, much derived by neoliberals, needs to be considered.

Prem Sikka is Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex.

Science and welfare are at the heart of this crisis – which is bad for right-wing populists. But they won’t be wrongfooted for long

The populist right has built their electoral strength on boisterousness and arrogant self-confidence. Yet, amid the coronavirus pandemic, figures such as Donald Trump, Boris Johnson and Jair Bolsonaro seem to be confounded. They are either desperately clinging to a narrative of normality (it’s just a flu), or have already been forced to make embarrassing U-turns acknowledging the gravity of the crisis.
Boris Johnson had to abandon the government’s “herd immunity” strategy when new scientific evidence made apparent its horrific human cost. He recently tested positive for the virus and is now accused of complacency and lack of leadership. In Italy, Matteo Salvini, leader of the far-right League party and former deputy prime minister, appears downbeat, unable to wear the robes of the responsible statesman this emergency calls for; his unabashed criticism of government has even earned him the label “unpatriotic”. In France, Marine Le Pen seems to have vanished altogether from the media, while Bolsonaro’s persistence in denying the crisis is leaving him increasingly isolated.
Will the coronavirus ‘kill populism’? Don’t count on it | Cas Mudde
In the US, Trump’s strategy has been zigzagging. After downplaying the significance of the virus for weeks, he was forced to declare a national emergency. Having backtracked last week, asserting that the lockdown would end by Easter to avoid damaging the economy, he has now conceded it will have to last until the end of April. It is true that his approval ratings have gone up, paralleling what happened with George W Bush after September 11. But Trump is clearly worried about the electoral consequences of a massive death toll and a recession that could see unemployment of over 20%.
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The difficulties experienced by national populists are unsurprising given they are no friends of the issues at the heart of this crisis: health, welfare and science. On the health front, the crisis reveals the folly of decades of underfunding and privatisation of the health system. Trump, Johnson and Salvini have embarrassing questions to answer in regard to their record as enemies of public healthcare. Furthermore, the crisis calls for a sea change in economic policy that is at odds with the ideological premises of national populism, which combines chauvinism on the cultural front and ultra-neoliberal policies on the economic front.
The glaring need for state protection of strategic national industries, starting with health equipment and pharmaceuticals, is no anathema for national-populists who have already embraced trade protectionism. But the populist right has strongly opposed welfare measures that are becoming a matter of necessity to avoid social catastrophe. Having repeatedly branded these policies as “dangerous” and “anti-patriotic”, these politicians find themselves in the embarrassing situation of having to espouse them.
Another skeleton in the closet is national-populists’ disparagement of science. The coronavirus emergency confronts us with a threat that is best understood and measured through the lens of science. Epidemiologists and virologists have acquired media prominence and the public has been diligently following their recommendations. It is not clear whether this will lead to greater public trust in science and an erosion of the anti-science attitudes that national populist leaders have toyed with. However, it can be expected that citizens will take more heed of the risks flagged by scientists, including the climate emergency, which is also bound to exacerbate the spread of diseases.
National-populists are well known for stoking people’s fears. But the fears now prevalent are not of the kind these leaders are best positioned to exploit. Due to the urgency of health and economic worries, migration – the populist right’s main enemy – has fallen in the list of priorities. Travel bans, and the fact that Europe and the US are the present focus of the pandemic, are leading to a drop in migration to these regions. In fact, we are now witnessing a historic reversal, with Mexico aiming to block the border with the US and African countries suspending flights from Europe, while UK farmers are organising charter planes to fly in farm workers from eastern Europe to prevent fruit and vegetables being left unpicked. However, if the global economic crisis results in a new wave of migration like that of 2015, this scenario could drastically change – national-populists will try to validate their narrative of cosmopolitan globalisation as a dangerous vector of all sorts of ills.
If the coronavirus crisis has momentarily disoriented the populist right, this does not mean it is vanquished. It would be misguided for the left to believe that this crisis will work out in its favour. The health crisis is bound to be followed by a deep economic crisis, more similar to the Great Depression than to the 2008 financial crisis, and the populist right has already demonstrated its ability to prey on popular despair and find social scapegoats for economic ills. It can be expected that it will go down the same road, if anything becoming even more vicious.
The authoritarian measures implemented on Monday by Viktor Orbán in Hungary, with the suspension of parliament and the introduction of government by decree, may be the shape of things to come. In Italy, Salvini had no qualms about applauding Orbán’s move. We are also likely to see an exacerbation of anti-Chinese rhetoric. Trump made no apologies for calling Covid-19 “the Chinese virus”, while Steve Bannon argued that Covid-19 is a “Chinese Communist Party virus”. Salvini has proposed that “if the Chinese government knew [about the virus] and didn’t tell it publicly, it committed a crime against humanity”, and allies in Brazil and Spain are adopting a similar line.
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Given the ties among national-populists, including their botched attempt to establish a “nationalist international” under the auspices of Bannon’s Movement, this synchrony should not be taken as accidental. It has all the look of a coordinated strategy to channel the rage and despair caused by the crisis’s brutal human and economic toll towards a racial and ideological enemy conveniently identified in the Chinese government. Along with self-proclaimed socialists, all opponents are likely to be smeared as “Chinese collaborationists”: centrist US presidential candidate Joe Biden has already been termed “China’s choice for president” by the conservative National Review.
What may be in store is thus something much worse than the populist right of the 2010s: an extreme right using the whole arsenal of the red scare and rightwing authoritarianism to intimidate opponents and defend its interests from demands for meaningful economic redistribution. Though it has been confounded by this crisis, the populist right has not been suppressed. It is just mutating.
• Paolo Gerbaudo is a political theorist and the director of the Centre for Digital Culture at King’s College London

Link to Guardian

Carolina Alves and Farwa Sial discuss the efficiency of the UK’s economic response to the COVID-19 crisis and explain why it does not directly support households but companies.

The global market gyrations since February 2020 have fed on a simultaneous supply and demand shock as well as crude oil price war. This is not a 2007-8 style financial crisis and there is no doubt that its impact is directly linked to disturbances in the circulation of capital: the stock market crash, rise in corporate debt, decline of the aviation and tourism industries, and the blow to the retail industry being some manifestations. However, the morbidity is not simply linked to the virus and the forced break in economies around the world, but to a multifaceted and contradictory historical process of how regulation escaped capitalism in the 21st century.

Since the 1970s, capitalism has undergone significant changes regarding production and distribution of value. Despite different and often contested approaches looking into these changes, a more prominent role for capital gains, fee incomes and, more broadly, rent-seeking behaviour is hardly denied. This shift has been described through various dimensions including heightened speculation in the finance, insurance, and real estate sectors, financialisation of non-financial spheres, and the emergence of new rentier classes. At the heart of this process we saw predatory value extraction and increase in inequality, which in turn has been enabled by the reinforcement of market fundamentalism and mechanisms that have led to the hollowing of states and institutions.

Although many regulations were implemented and redesigned since the 2007-8 crisis, aggressive risk-taking and moral hazard, which marked the foundations of the crisis, did not simply evaporate but have been extended and socialised in many different ways. Late capitalism rests on the ease to transcend institutions because the checks and balances which regulated profit accumulation during the post-WWII era are no longer in place. The hollowing of state has been accompanied by both allegedly neutral ‘technocratic bureaucracies’ and an absence of development indicators such as class mobility and welfarism.

Within this context, the expertise of epidemiologists to contain the virus may be more successful if accompanied by systemic reforms to address the imbalances resulting from the current structure of rentier extraction that, explicitly or implicitly, hinder policies aimed at common good.

Let’s consider, for example, the surge in demand for some products due to reasons including hoarding on an individual and corporate level. The supply side of this story may be facing input price rise, like pharmaceutical companies raising prices on essential drugs citing a halt in the import of raw materials from India and China. However, the current context may also give rise to exploitative practices. Either way, the most financially vulnerable will feel this cost in a time of illness, and their perception may exacerbate surges in demand (including hoarding) – especially in a system which is not prepared to challenge unexpected increases in production costs.

The Competition and Markets Authority issued a statement to ensure that companies should not engage in exploitative practices at the expense of customers. Yet this statement is effectively no better than a non-legally binding code of conduct, with no punitive consequences for unscrupulous market participants. This state of affairs is representative of a wider trend across UK regulatory and supervisory authorities, which short of litigation, have tended to merely deal with failures in consumer protections with toothless platitudes.

Rescue economic packages: how efficient?

The gravity of the current crisis has led governments to implement ambitious stimulus packages to revive the economy. Economists and policymakers have intensely scrutinised these packages. A very peculiar point cutting across some of these criticisms, however, lies within the need to focus on households and workers. In the case of the UK, the rescue package does not empower or directly support households but companies. Its measure for the most part expressly targets businesses with VAT and other tax holidays or deferrals, interest rates cuts, and various other kinds of operational assistance. Even when the approach deals with the workforce – for example, the scheme offering up to 80% of an employee’s wage – it has been geared towards the objective of business continuity, with no focus or conditionalities aiming at precluding a class of zero-hours contract employees to follow, keeping employed as many workers as possible, and enabling them to make productive contributions.

Part of the intention behind this scheme, recently extended to the self-employed, is both to prevent a lapse in consumption and stave off the attendant insolvencies, company voluntary arrangements, and business failures that might originate thereof. In this respect, this scheme is comparable to an extent with the approaches following the 2008 crisis, where a number of financial innovations and measures were introduced with the specific aim to improve the supply of credit to the real economy. But, as history showed us, the availability of such credit did not translate to the expected ‘trickle down’ to either consumers or businesses, as the recipient institutions remained averse to lending (even to each other), protecting themselves. With a faith on businesses rather than financial institutions, in the current case, the wage scheme is to be sought from the government by the employer rather than by the employee, with no explicit mechanism to either avoid firms acting solely for their own benefit (for example, Virgin Atlantic upon seeking a £7.5bn bailout from the government are simultaneously demanding that their employees should forego remuneration for eight weeks) or ensure binding regulation to guarantee employment (see, for example, Wetherspoons which laid off 43,000 workers).

It can’t be emphasised enough that the current pandemic is neither simply a crisis of supply or demand, but a disruption of labour supply followed by unusual shock slowing down demand for some services and goods even when most of the people are still holding their jobs or being monetarily compensated for not being at work. For this reason, although households within economic analysis are usually understood from the lenses of consumption, it seems that now stimulus or reform packages have to be tailored to not only spur demand (at the right moment) and keep businesses alive, but ensure that a complete breakdown of the system due to the need to ‘de-mobilise’ the economy is avoidable.

In this sense, much more needs to be done assuming a more central role in the economic analysis for households. We ought to include measures that look into issues ranging from childcare and elderly care, direct and quick monetary transfers to levels of debt and precarity of employment. This focus is particularly important considering that the weakening of the state in the UK has been accompanied by the austerity policies and misallocation of resources resulting from the privatisation of healthcare.

While alternative measures such as universal income and ‘helicopter money‘ have been criticised on the basis of the amount of money transfer and duration of uncertainty linked to the crisis, the efficacy of both proposals lies in protecting households. This protection, whatever its format, is what we need now, and it should be followed by radical changes in a way we see, understand, and perceive inequality, vulnerability, and class – in the same way that the implementation of the welfare state in the 1940s followed both a radical change in how poverty was perceived after WWII and the acknowledgment of the need for a comprehensive welfare system as a duty of the state. If we will use the war analogy to understand and solve the COVID-19 crisis, this is definitely the main (and perhaps the only) reason to do so.

So, what next?

As others have advocated, a reform/stimulus package has to be a comprehensive intervention which ensures protection for ordinary people. In the absence of a vaccine, the ‘economic contagion’ needed to keep the economy afloat can only work if people are both immobilized and financially secure. The current model of capitalism and its response to crisis is not only inadequate, it continues to fail in protecting the most vulnerable and assuring safety for households. A systematic transformation, which leaves institutions better prepared to deal with crises, can only start with addressing the basic question of unequal distribution and reorienting economic policy from a common good perspective. The UK has a historic opportunity to rethink its economic model: regulation must be strengthened and transformed in favour of the public.

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Note: the authors are grateful to Ingrid Harvold Kvangraven and Ilias Alami for helpful comments.

About the Authors

Carolina Alves (@cacrisalves) is Joan Robinson Research Fellow in Heterodox Economics at Girton College, University of Cambridge.

Farwa Sial (@farwasial) is a post-doctoral researcher working on the ESID Project at the Global Development Institute, University of Manchester.

LSE blog link

Paul Anand highlights the key economic policies announced in response to the ongoing pandemic and assesses their likely implications. He concludes that existential threats to economic systems seem not to be as rare as we believed, and so economists ought to be giving more thought to how we respond to them.

The novel coronavirus pandemic has seen policy-makers shift from pondering whether COVID-19 will have much economic impact to, within two or three weeks, scrabbling around to find policies that address existential threats to economic systems around the world. The economic priorities and problems that emerge are doing so on a daily basis, and it will now be clear to many that conventional policy actions simply do not apply, even if basic underlying principles do.

Businesses

At the time of writing, the major economic challenges concern the likely effectiveness of a series of (fiscal) policies announced by the UK government. Initially, the government and the Bank of England seemed to be focussed on supporting businesses and announced a range of measures including loans to tide businesses over. But it is already becoming clear that the devil is in the detail.

There is still a huge amount of uncertainty about how long social distancing will last – perhaps it will be three weeks or three months; in the UK, emergency powers have been requested for two years. As a result, the massive £350bn package of support – which includes business loans – risks being substantially ineffective. Company directors are being asked to take out loans, but where companies have costs and close to zero revenues for several months, they could face the prospect of being without profits for two or three years. For these reasons, banks offering loans even with substantial underwriting by government will not able to easily judge whether and when many businesses will be clearly solvent.

Inequality

I regularly collaborate with the UN and the World Bank, where the concept of human development is an important driver of economic thinking. The UN has an index which monitors health education and gender equality as well as national income, providing this war a focus for what economies need in a way that goes ‘beyond GDP’, a need that economists have increasingly recognised in recent years. From this perspective, COVID-19 is a human development crisis in the making which also demands immediate policy attention.

In the past few days, one UK charity food bank has reported a quadrupling in referrals over the space of a week. At the same time, other food banks and organisations trying to arrange food deliveries for the most vulnerable have reported thefts of food. Supermarkets have been addressing some of the challenges by creating particular times when older people or front-line workers can shop. These latter initiatives are welcome, but local government does need to be empowered to address the issues of hunger that some families are already facing.

There are also huge short- and long-term implications for education and labour markets. The closure of schools challenges both children’s learning and schools’ abilities to offer learning online. But it also throws into sharp relief the extent to which businesses depend on schools for childcare and we should expect the losses of national income to be significant if closures carry on for several months.

Furthermore, there is evidence that those who find it difficult to enter the labour market for the first time because of economic recessions are scarred and achieve poorer economic outcomes over the longer term. This is yet another source of inequality that we should try to combat.

Healthcare

In terms of health and health services, shortages of protective equipment in the NHS are contributing to staff shortages, as doctors and nurses self-isolate or go sick. Matt Hancock has suggested this reflects a logistics problem but whatever the reason, this is a serious constraint on the country’s response and one that makes understandable the reason thousands of NHS staff have complained about the lack of appropriate masks and gowns.

Currently, medics are also suggesting that by early April there will be a need to make decisions about who gets access to a ventilator. The government has, for several weeks, said that it will purchase all the ventilators that suppliers can produce but there are limits to how quickly their production can be ramped up. The fact that doctors and nurses are being invited out of retirement and back into work is an indication of just how dramatic the demands on the service are expected to be and highlights also the fact that other aspects of healthcare will suffer.

Salaries

The pandemic has created unexpected calls for economic policy responses. Over the course of three budgets in nine days, Chancellor Rishi Sunak has acknowledged that this is not just another recession and this is not a time for ideology. Rather, he has shifted to a position where he is listening and responding to the existential risks to large numbers of jobs, to whole industrial sectors, and to vulnerable groups within society. The offer to underwrite 80% of worker salaries up to £2,500 per month is a potentially sizeable and welcome signal that livelihoods should be the focus of economic policy because they support workers and businesses at the same time. In normal times, policies for both seem to be siloed and disconnected – but we cannot afford to think like that right now.

That said, support for the self-employed and those in the gig economy on zero-hours contracts has been slower to work out. There are some five million workers classed as self-employed in the UK and another million working on zero-hours contracts; these cover a diverse set of groups – from high-paid celebrities to working mums and taxi drivers. When they stop work, currently many are entitled to £94.25 per week, a figure that Matt Hancock accepted that he could not live on.

The issue caused some confusion, particularly in the construction industry where many workers have wondered if they should carry on working on the grounds they cannot work from home and need to put food on the table. As a result, the London underground, supposed to be running for emergency workers with passengers keeping two meters apart, has been crowded and remained a hotspot for transmission that undermined the first days of the three-week lockdown.

Following the initialy delay, on March 26 the Chancellor announced a scheme that would give such workers 80% of normal earnings up to £2,500 per month and subject to a means test of no more than £50,000 per year to ensure benefits are targeted to those in greatest need.

Rents and mortgages

There are also issues concerning rents and mortgage repayments that affect most of society. The agreement between the government and the banks that those paying rent or repaying mortgages would be able to have a three-month holiday was welcome a couple of weeks ago. But it now looks certain that those living on low incomes in high-cost cities like London will need much more help if we are to avoid a rise in evictions further down the line.

The COVID-19 pandemic created a twin economic and human development crisis that standard economic thinking is not well-suited to. The Chancellor is to be applauded for moving quickly and dramatically in the right direction but there is still much evidence of what behavioural economists call anchoring and adjustment – that is, failing to adjust enough because our actions are often based on small incremental steps from where we start. The signs from China suggest severe measures can be effective over a three-month period and it remains to be seen whether Johnson’s libertarian inclinations will allow him to pursue the strategy, even though it seems to be supported by most. Existential threats to economic systems are not commonplace, of course, but experience of the financial crisis, the climate crisis, HIV and AIDS, as well as war is beginning to suggest that economists should give more thought to policies and analysis of such situations, which are perhaps less rare and unusual than we might have thought.

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About the Author

Paul Anand is a Professor of Economics at the Open University and Research Associate at Oxford University and London School of Economics.

LSE blog link