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Covid-19 & Imperial College Report

The government’s pivot from a strategy of mitigation to a strategy of suppression this week was caused by the work of the MRC Centre for Global Infectious Diseases analysis led by Prof Neil Ferguson. The report in question is the Centre’s 9th report on Covid-19. Twenty pages long there is some very impressive statistical analysis but the argument and the conclusions are clear for any lay reader.


It considers the pros and cons of both mitigation and suppression strategies for dealing with Covid-19. Spoiler alert, it comes down very much on the side of suppression given the likely level of deaths of the mitigation strategy, 250k. In essence this is mainly due to the health system being overwhelmed before any benefits of herd immunity begin to appear.


I recommend anyone not yet convinced of the need to take seriously the advice of the government on radical social distancing to read the report. Specifically I suggest you contemplate Figure 3 from the report shown below.

The key thing to look at here is the red line at the bottom of graph (A), as expanded in the lower graph (B). This is the critical care bed capacity in the system.  The black, green and orange lines are what happens given different social distancing responses. Black is that colour for a reason. If we do nothing then the NHS will be overwhelmed with cases and have nowhere near the capacity to meet demand. This will therefore mean some 250k+ Corona virus patient deaths. I am not sure  whether this addresses collateral damage ie. those patients that ordinarily need a critical care bed but will not be able to get one because they are full of Covid-19 patients.

The orange and green lines show differing levels of social distancing. We have moved from being “advised” to being “told” by the PM that we should move to what the green line requires. I suspect the next step will be “instruction” backed with sanctions.

The aggressive suppression strategy clearly manages to keep the cases of corona virus requiring critical care within the capability of the system. However, it does assume the social distancing measures last until September, a touch longer than the PM’s optimistic timeframe. 

The down side of the suppression strategy is that it slows/prevents herd immunity and thus when the measures are relaxed the virus takes off again. Does, therefore, suppression simply delay the inevitable? No. Critically what suppression does is buy us precious time. Time to build critical care capacity: beds; staff; PPE; ventilators etc. Time to build testing capacity both in terms of scale but also the ability to test for those that have had the virus and are well. Finally, time to identify a vaccine, although this is clearly many months away at best.

The strategy seems to be the “Hammer and Dance” one set out by Tomas Pueyo’s in his article, referenced in my last post. This involves Hammering the virus with aggressive social distancing. The aim being to get the infection rate from something like 2.4 persons to 1 or below. In other words  the number of people an infected person passes the virus on to falls from 2.4 to 1.

Then infections will start to reduce and the Dance begins as critical care facilities gain capacity social distancing restrictions can be relaxed. As soon as the rate of infections start to build again the restrictions need to be reapplied, however, by then it may be possible to target them more effectively through the use of much more wide spread testing. A touch of 2 steps forward and one back. Or perhaps more like  like the fair ground game “Whack a Mole” where moles pop up in random places and you have to whack them back down.

If you want to get a reasonably good picture of the likely evolution of the disease and the key factors driving its spread the Imperial College Report is well worth a read.

Stay safe 

 

 

 

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Covid-19 “Another day another $300bn.”

The Chancellors announcement of a £300bn support package for business to address the impact of the Corona Virus epidemic should ring loud alarm bells. When this is presented as a starter for ten then you know we are in trouble. A Tory government, lately of austerity fame, has discovered the money tree, in fact has found a forest of them.

There are two things that make the current situation stand out. Firstly, daily briefings from the PM setting out the state of play with the spread of the virus and the actions the government is taking to address its health, social and economic consequences.

Secondly, the scale of resources being talked about which, outside of war time, are unprecedented.

Given all this it seems strange that the government seems loath to move from an exhortatory strategy of mitigation, please do not go to the pub, to a much more aggressive strategy of suppression by shutting the pubs. At the moment there seems to be a dissonance between on the one hand the rhetoric about the seriousness of the situation and  importance of social distancing actions and on the other hand the advisory nature of the steps to achieve the appropriate social distancing.

In the PM’s press conference yesterday the public were thanked for the way they were following the advice. Perhaps if your only experience is the drive from 10 Downing Street to Parliament you may be impressed by how quiet the Capital is. However, you do not have to go far to see reduced but brisk trade in bars, pubs and restaurants.

Maybe there is some legal impediment to his issuing closure notices to Britains hospitality industry. Maybe that will be corrected next week when the Corona Virus Bill is enacted. This contains a whole range of enabling powers to: allow the health work force to be expanded; the effective management of the disposal of bodies; and the power to regulate the access to premises.

Given the speed of the current virus, if there was ever a case for acting now and legislating later this is it. Or indeed, getting Parliament to sit over the weekend to put the legislation in place if that is what is needed.The legislation could have a 6 month sunset clause to enable Parliament to review, amend and improve in the light of experience. Days matter.

My concern on this is driven partly, but far from wholly, by the article I referenced in my last post on this by Tomas Pueyo entitled: “Coronavirus: why you must act now“. It made a strong argument for urgent action.  Mr Pueyo has written a follow up article, (Coronavirus The hammer and the Dance) on the importance of early adoption of an aggressive suppression strategy as opposed to a mitigation strategy.

Ordinarily CEO’s of $billion businesses are not my favourite source of information. However, the logic of Mr Pueyo’s argument seems reasonable and the numbers he quotes are consistent with information from other public sources. Further, his logic is certainly no weaker than that which says – it is vitally important that you don’t go to pubs, but we are not going to force them to close. The latter message undermines the former.

Whilst Mr Pueyo’s articles are at best sobering the latter one provides some hope about the period of social isolation we might face.

If these articles are wrong in their estimation of what strategy the government needs to be pursuing and when, they at least provide a framework of questions which seem to me to be very relevant. If you are interested in a very accessible introduction to the epidemiological issues around Corona Virus,  then these articles are the best I have seen so far.

But, to be clear, my concern about the current situation is not based on a single article however well illustrated with graphs. In the past we have heard about Ebola, SARS and MERS as things that happen over there, to other people, far away. This is here and now. We can see what it has done to those that have gone before us. Italy is a peacetime war zone with the health system all but overwhelmed. What all the experience to date points to is the urgency of action and the cost of delay.

We are told we are about three weeks behind Italy and that we have a finely graduated response which will minimise the impact on our social end economic lives. I am sure there are some very clever people looking at this with some very sophisticated models. However, if ever there was a time for the adoption of the precautionary principle this is it.

The advisory position at the moment is logically lockdown. Businesses are closing left, right and centre. Serious economic damage has been done. But lock down is not complete. People think if the pub is open why can’t I go?

If lock down would get us on top of this virus why would we not enforce it now. If, they manage to calibrate the perfect flight path we may save some economic and social dislocation and some lives. If they act too early it could cost us more social and economic dislocation. but save more lives. If they are just too late, the consequences are much worse. The economic and social loss will be greater than either of the two other options. But, more critically, we will face an overwhelmed NHS, thousands of deaths and scenes which will live with people for the rest of their lives. 

I think I am in the camp of those who feel the government needs to act now to aggressively suppress the virus with all that goes with that.

Be Safe.

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Cash – COVID-19 Virus

“Turnover is vanity, profit is sanity, but cash is reality”.

There are plenty of unprofitable businesses in the world some with very high turnovers, but there are none without cash. Some businesses have mountains of cash like Apple and Amazon, tucked away in low tax regimes. Obviously they are “smart” businesses avoiding paying taxes to states that waste the money on things like universal healthcare. I wonder if all those tax dodgers are immune to COVID-19?

However I digress. In the last budget, that was six days ago when the world was a different place, the Chancellor announced a £12bn package of measures to support business. This morning on the Today Programme that amount was dismissed as a rounding error for the scale of support needed.

The need is not for tax relief next month  it is for cash, today or tomorrow. The reason for this is that so many businesses in the hospitality industry operate on very tight cash margins. Once day to day operating costs are covered the money coming into the business during a month provides the cash to pay for the salaries and the tax bills at the end of the month, and if you are lucky an element of profit. If halfway through the month, say on the 16th, the Prime Minister tells all your customers they should not go into your pub, restaurant, hotel, theatre etc then it is very likely by the end of the month you will not be able to pay your salary or tax bill.

HMRC can be as understanding about late payment of tax as they want, staff will either sue for their wages, or walk out, or both. In any of those scenario’s its game over for the business.

This is what will happen to hundred of businesses around the country and thousands of staff, possibly millions as it is clear other industry sectors are beset by the same basic cash problem. The scale of the problem is enormous.

Providing cash to keep businesses afloat when there are no customers, for one, two or six months is a mind boggling number. So big it may be dismissed out of hand. But then on the other hand the alternatives are not great.

Firstly, there is a logistical problem. In the space of a couple of weeks hundreds of thousands could be being made unemployed. The DWP are wrestling with Universal Credit, and losing. They will be overwhelmed with demand for from new claimants. The transfer payment bill will go through the roof.

Although the social security bill will balloon, as people move from low wages of circa £300 per week (most hospitality workers are on minimum wage) to unemployment benefit of around £70 per week the impact on demand in the economy will be immense. Causing other businesses to contract or collapse creating a vicious circle of decline, further reducing tax revenues and further increasing transfer costs.

The level of discontent this will generate in a population restricted to their homes does not bare thinking about.

COVID-19 is not just infecting people it is infecting the economy. More specifically it is attacking cash, the life blood of all current economic life. The only way to insulate against this is an enormous transfusion of  new cash into the economy. As Jim O’Neil suggested on the Today Programme we need Quantitative Easing for people. Others have called it helicopter money, after the notion that you empty sacks of money out of helicopters. The idea being to put effective demand into the hands of consumers, the vast majority of whom will spend all of it and thus stimulate the economy.

There are some very radical proposals kicking around at the moment. If people thought the last budget was a radical spend budget for a Tory government, they ain’t seen nothing yet.

(Declaration of interest – The writer part owns a small restaurant)

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What a difference a day makes!

On Sunday I posted about a likely shift in gear as the government responded to a growing chorus of concern about the scale of the response to COVID-19. I agonised over sharing a link to an article by Tomas Pueyo which painted a rather bleak picture and was urging radical action on social distancing immediately. I did not want to contribute to a growing sense of unease. Little did I know.

I have more confidence now and believe yesterday was merely an introduction of what is to come and that by the end of the week legislation will be in place to enforce a much more rigid programme of social distancing, nay social isolation.

The report from Imperial College London has focused policy makers minds with its projections of a quarter of a million deaths unless radical action is taken to slow the spread of the disease. This would overwhelm the NHS and involve medial staff making live or die decisions.

There were a number of criticisms one could make about yesterday’s speech and it is easy to snipe from the sidelines. however phrases about what we are “going to recommend” do not help. And suggesting what people do is too weak. There may not be the legislation to back up clear instructions at the moment but that should not prevent them from being given and it is a matter of days, maybe hours, before that legislation is in place.

Two things are absolutely clear:

  1. Social distancing should be taken really seriously. No social gatherings at all. There is plenty of guidance on this. One practical piece of advice, have a soap dispenser that you have to step over to get into your home. As soon as you come in from outside wash your hands before you touch anything. The virus can remain on surfaces for 72 hours+
  2. Isolated individuals and families, particularly the elderly, who do not have local support will need help from their neighbours. Such help is the right thing to do from a moral point of view but also from a public health point of view. If people are infected  and hungry they will go out. Unless they are critical hospitals will not be interested. There is not the infrastructure of public social care support to help them. It is going to come down to neighbours to help them maintain the isolation.

Yesterday was tantamount to a declaration of war. Like all wars it depends upon public servants to be won. Sometimes that is the soldier, this time those on the front line are doctors, nurses and a range of other healthcare workers. We should not however forget the private sector workers who are on the front line particularly those operating the supermarket tills and transport staff who interact with the hundreds of members of public every day.

What is crystal clear now is that time is of the essence, and no longer should we underestimate what a difference a day makes.