Published:

130 comments

Daniel Hannan is a writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

One by one, firms starting to go under. They struggle on for as long as they can, furloughing their employees, taking government grants to cover their outgoings. But – especially for companies that don’t qualify for the £25,000 handout – the bills eventually become too much. Yes, 80 per cent of staff salaries is generous. But they still have to cover their rent, rates, utility bills, insurance, council tax, supplier invoices – and, of course, residual salaries. With zero customers, it becomes impossible. Which is why, within the first nine days of the crisis, half-a-million extra people had joined the dole queue.

Even sectors that you would expect to be insulated are being hit. A publisher friend, for example, tells me that book distribution companies are going down, meaning that he, too, has to lay off staff.

We have all spent a lot of time looking at exponential graphs recently. Insolvencies could soon be ticking up faster than infections. The furlough scheme is not designed to last. It makes sense to hold jobs open if the stoppage is brief. But that is the most weighted “if” since the Spartans sent their one word reply to Philip of Macedon.

If most businesses are able to reopen by Easter, the policy will have been triumphantly vindicated. Staff will return to work, the rise in unemployment will be contained, and the economic hit will turn out to have been largely a one-off. If, on the other hand, the shutdown lasts until May, or even June, there will be few customers, since everyone else will also have had to retrench.

That last paragraph will send several readers scrambling furiously for their keyboards. “Typical Tories!” they will say. “How can you even be thinking about businesses at a time like this? How can you put a value on human life?”

Actually, governments are obliged put a value on life all the time. The NICE does it whenever calculates whether a new medical investment is justified. There is even a formula to work out “Quality Adjusted Life Years” (QALY), reflecting the difference between the death of a healthy toddler and that of a bed-ridden nonagenarian. Since, all over the world, we can see a correlation between life expectancy and GDP, it is not unreasonable to ask how many extra years – or how many extra QALY – will be forfeited under the various strategies open to us.

My point is not that shops must reopen at any cost. No one is arguing that. My point is simply that trade-offs need to be made. There must logically be a point at which the cost of the containment measures, in terms of human welfare and even of fatalities, outweighs the cost of the virus.

I am not saying that we are at that point. Indeed, I’m not sure anyone could confidently say so when there are so many unknowns. There are widely varying estimates of how contagious COVID-19 is, and how lethal. We have no idea how many people have already had it. In the circumstances, we can’t say how many would be at risk if the strictures were loosened. Nor, obviously, can we put a number on the indirect costs of the shutdown: no one knows, yet, how many businesses are collapsing.

But the fact that we can’t yet put numbers on these things doesn’t mean that, as we get more data, we shouldn’t keep them under review. Two years ago, during the unusually cold winter of 2017/18, seasonal flu carried away some 50,000 people. No one argued that we should shut all shops to slow the virus. Indeed, according to the UK Influenza Pandemic Preparedness Strategy 2011: “It will not be possible to halt the spread of a new pandemic influenza virus, and it would be a waste of public health resources and capacity to attempt to do so”.

Now the key point. How much we should pay, and who should pay it, are political questions. How much we borrow, how much of a hit we expect businesses to bear, how we compensate them for that hit – these are democratic judgment calls, not medical facts.

It is important to understand the distinction. We should listen to experts in their fields of expertise. But the question of how to allocate limited resources is political rather than scientific. Ministers should defer to their advisers when it comes to charting the epidemiology. But it is unreasonable to ask epidemiologists to rule on, say, the relative costs of closing down all commercial activity versus that of concentrating on protecting only those individuals in high-risk categories. We elect politicians to arbitrate competing claims of this sort.

That is why MPs must continue to meet, virtually if necessary. It is why the identity of the next Labour leader matters. It is why it would be wrong to have a government of national unity. External scrutiny allows different ideas to be proposed, different perspectives to be tested.

Commentators, like MPs, are partially cocooned. People who write columns, as I do, were already largely working from home. Although some media may be forced under by the loss of advertising revenue we have, so far, not lost our livelihoods. Nor have MPs or civil servants: their salaries are unaffected. That isn’t a criticism; it is simply a reminder that the costs of a crisis like this are not felt evenly.

To repeat, I am not in any position to say how high those costs will be, or how high they ought to be. I can’t tell you whether the price of the hospitalisations and fatalities will be higher than that of a two-week lockdown, or a two-month lockdown, or a two-year lockdown. All I am saying is that that grim calculation must at some point be made. Refusing to face it is not an act of high-mindedness, but of dereliction.

130 comments for: Daniel Hannan: There will come a point at which the cost of containment will outweigh the cost of the virus

Leave a Reply

You must be logged in to post a comment.