In February, US President Donald Trump was asked why, two years prior, he had dismantled the National Security Council’s pandemic response unit. Trump replied: “I’m a business person … I don’t like having thousands of people around when you don’t need them.” It turns out that Trump did need them and that his obsession with cutting the public sector was a bad move. Trump’s economic dogma has made the US ill-prepared for the COVID-19 catastrophe. A minority of Americans elected Trump in 2016, but he came to Office because of the country’s unjust Electoral College system.
In Britain, the situation is little better. Professor Colin Mayer of the British Academy had told the BBC: “The UK has a particularly extreme form of capitalism and ownership,” by which he meant a form of “laissez-faire” capitalism that protects the wealthiest institutions and pits everyone else against a so-called “free market.” In December 2019, fewer than 14 million Britons out of a population of over 60 million put Boris Johnson into No. 10, giving him a massive Parliamentary majority to head the UK’s “extreme form of capitalism.” Johnson’s team consists of “laissez-faire,” “free-market” thinkers whose obsession with dismantling the public sector has impaired their thinking over coronavirus.
Rather than act, they have been forced to act. In the words of Dr. Gabriel Scally, Honorary Professor of Public Health at Bristol University, “UK is out of step with the rest of Europe” in its handling of the COVID-19 response and was duly criticised by the World Health Organization. This, says Scally, is a “dangerous and potentially deadly example of laissez faire.”
THEY HAD BEEN WARNED
Back in 2008 under New Labour’s PM Gordon Brown (himself a proponent of “light-touch” financial regulation), the UK National Security Strategy warned that a pandemic was inevitable and that its spread was only a matter of time: “the highest risk is an influenza-type pandemic, like the outbreak in 1918 which killed 228,000 people in the United Kingdom and an estimated 20–40 million worldwide.” It adds: “Experts agree that there is a high probability of a pandemic occurring – and that, as the SARS (severe acute respiratory syndrome) outbreak showed, the speed at which it could spread has increased with globalisation.” It concludes: “We estimate that a pandemic could cause fatalities in the United Kingdom in the range 50,000 to 750,000, although both the timing and the impact are impossible to predict exactly.”
The following decade of Tory governments, whose mindset is shape by neoliberal, laissez-faire dogma, imposed the Health and Social Care Act 2012 (with the Liberal Democrats in the coalition government). The Act further fragmented and privatised the National Health Service. In 2013, the British Medical Association (BMA) provided scathing evidence to the House of Commons Communities and Local Government Committee, writing: “The fragmented nature of the new health system will require that each organisation … [is] aware of the plans in place to deal with potential outbreaks of ill health, such as pandemic flu or legionnaires disease.” The BMA goes on to note that “the Health and Social Care Act 2012 is not clear on these lines of responsibility. As such, it is possible that different areas of the country will develop different ways of dealing with outbreaks.” It concludes that “[t]his will be problematic for those organisations that have a national role and who will therefore have to tailor their responses to local plans. This could lead to inefficiency, duplication of effort and ultimately put lives at risk.”
The Tory-Liberal government’s Influenza Pandemic Preparedness Strategy devolved responsibility to NHS England Trusts under the rubric of the Emergency Planning Framework and NHS Command and Control. Successive Tory governments (2015-present) continued to reduce hospital beds, from over 170,000 in 2009 under New Labour to 140,000 in 2019.
ACTING BECAUSE THEY HAVE TO
Team Johnson wanted to avoid a massive rescue package that would offend its “free market” principles. It was only after advisers warned that he could be responsible for a quarter of a million deaths (and by implication ruin any chances of re-election) that Johnson acted more aggressively against COVID-19.
The World Health Organization (WHO) spelled out advice to governments around the world: detect, protect, and treat; isolate the sick and quarantine their contacts; expand health resources; and communicate these steps to the public. Under the advice of the Chief Scientific Advisor and former GlaxoSmithKline R&D director, Sir Patrick Vallance, the Tories instead opted for “herd immunity.” Echoing Dr. Scally’s “laissez faire” criticism quoted above, Dr. Helen Ward of Imperial College London said: “I think it’s a version of ‘take it on the chin’, get it over and done with.” Ward cautioned that such an approach “will just collapse the healthcare system.”
WHO spokesperson Margaret Harris publicly criticised the “herd immunity” approach. Imperial College London’s Covid-19 Response Team wrote: “mitigation is unlikely to be feasible without emergency surge capacity limits of the UK and US healthcare systems being exceeded many times over.” Its report on “herd immunity” concluded: “even if all patients were able to be treated, we predict there would still be in the order of 250,000 deaths.”
Where much of the rest of Europe accepted this and put emergency budgets in place to prevent an economic collapse, Johnson left it for as long as possible. The Response Team wrote: “In the UK, this conclusion has only been reached in the last few days.”
LOANS NOT BAILOUTS
The incoming Bank of England governor, Andrew Bailey, warned as early as 4 March: “We are collectively now going to have to provide some form of supply chain finance … We’re going to have to do that very quickly.” Team Johnson dithered.
As the Residential Landlords Association asked Johnson to allow tenants to delay their rents, small and medium-size enterprises (SMEs) accused Johnson’s initial approach as “sacrificing” them on the altar of the “free market.” As part of the new Social Distancing strategy, Johnson advised the public not to eat in restaurants, drink in pubs, or attend sporting events, or entertainment venues. But due to the lack of mandatory closure, SMEs warned that they would be unable to claim insurance compensation for collapsing revenue and staff costs. Successive Tory administrations failed to adopt legislation requiring insurers to compensate all businesses in the event of social crises. The Association of British Insurers said: “Irrespective of whether or not the government order closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance.”
Appearing to reject his so-called free market “orthodoxy,” Johnson’s ex-hedge fund managing Chancellor Rishi Sunak announced a £350bn rescue package. But the stimulus is less a bailout than a hodgepodge of tax breaks, grants, and loans; the latter being an opportunity for lenders to profit in the long-term. Bank of England governor Bailey’s letter to Sunak states that the Covid-19 Corporate Financing Facility will act as a separate lending bank. “HM Treasury,” meaning the taxpayer, “will fully indemnify the Bank [of England] from any losses and expenses.” This is hardly an abandonment of “free market” orthodoxy, but rather, an echo of the taxpayer bailouts in 2008-09, after the financial institutions crashed the global economy.
MAKING A COUPLE OF QUID
Team Johnson has an ex-hedge fund profiteer, Sunak, running the Treasury. Advisor Dominic Cummings, raised money from hedge funds for the 2019 general election campaign. Despite the administration’s slow, widely-criticised, and fluid response to the crisis, recent weeks have been a boon for certain financial market speculators. As third world hedge fund market investors tank, others profit handsomely.
So-called “tail risk” hedge funds successfully betted that the Bank of England would cut interest rates in response to COVID-19. Others made £150m betting against the Cineworld chain’s stock prices and more funds anticipate that major industries, such as airlines, will collapse. Hedge funder and major Brexit advocate, Crispin Odey, said: “we’ve made a couple of quid.”