Sunday, September 20, 2020
For Britain, Covid has been the worst of all worlds
Posted by David Smith at 09:00 AM
Category: David Smith's other articles

My regular column is available to subscribers on This is an excerpt.

The Covid-19 crisis has seen the return of the public information broadcast, often accompanied these days by public information tweets. For those of us of a certain age, this brings back many memories, the broadcasts not the tweets. Public information films used to tell us to put seatbelts on in cars – “clunk, click, every trip” – though they were presented by Jimmy Savile. We were also told that “coughs and sneezes spread diseases”, a campaign that might be worth reviving now.

I say this because this is going to be a public information column, on the coronavirus pandemic and its impact. So get ready for some cold, hard facts. There are, I know, a lot of misunderstandings out there, and not just from the deluded anti-vaxxers, and their fellow travellers, who insist that Covid-19 is a myth. Fortunately, they are a tiny and nutty minority.

Let me start with Covid-19 itself. Many people will be aware of the daily figures for UK deaths from coronavirus, measured by people who have died within 28 days of having a first positive Covid-19 test. The cumulative total now stands at a little under 42,000. Even on the basis of this narrowest definition of Covid deaths, Britain has the fifth largest global death toll, after America, Brazil, India and Mexico.

Most people will also be aware, I hope, that this underestimates the true total. The Office for National Statistics’ weekly comparison, of numbers where Covid-19 is mentioned a cause of death on the death certificate, gave a total of 56,840 in the period to September 4. It is “a” cause of death for a reason; most victims – not all – had underlying health conditions. 56,840 is equivalent to a town the size of Macclesfield or Aldershot.

How does the death toll for Covid-19 compare with other causes of death? The answer is that many more people have died from other causes during the period of the pandemic, including dementia and Alzheimer’s disease, cancer, heart disease and strokes. Since late June more people have died each week with influenza and pneumonia – which often takes away the elderly - mentioned as a cause of death than Covid-19.

Overall, between the start of the pandemic – the first deaths - and September 4, 16.9% of deaths were attributed to Covid-19, the rest to other causes.
Before moving on, it is worth also mentioning another important figure, which is for excess deaths; those above the five-year average for this period. There were 57,793 excess deaths in England and Wales until September 4 and scaled up for Scotland and Northern Ireland gives a figure of around 65,000.

Shocking though these figures are, each representing a family tragedy and in many cases a lonely death, I hope it is not too callous to say that the economic consequences of the crisis are, when expressed in hard numbers, even more striking.

At the start of this year, the consensus among independent economists, as sampled by the Treasury in its monthly compilation of independent forecasts, was that the economy would grow by a modest 1.1% this year. It was not looking like a good year, the slowest since the financial crisis, for an economy beset by Brexit and other uncertainties.

Little did we know. Now the consensus among economists is that the economy will contract by a huge 10% this year. “Contract” is too mild a word for that, as is shrink. Plunge would be better. Taking 2019’s gross domestic product as a starting point, and ignoring inflation, the difference between an economy growing by 1.1% and one plunging by 10% is £246bn.

In round numbers, the economy has taken a £250bn hit this year, and that is not the end of the story. There will be a cumulative loss of GDP in future years. Bouncing back is not just a question of getting back to where you were. It is also making up the lost ground with a period of stronger growth than was previously expected and that looks unlikely. Even in five years, the economy will be several percentage points smaller than previously expected.

To the human cost of the crisis in deaths and illness can be added the human cost in unemployment. At the start of the year, the consensus among economist was that the unemployment rate would end the year at 3.9%. It is already higher than that, as the latest figures show, and is now forecast to rise to 8.3%. The difference is equivalent to more than 1.5m additional people becoming unemployed, taking the total to just under 2.9m.

The Office for Budget Responsibility (OBR) in its central scenario sees unemployment rising to 3.5m total this year, which implies that more than 2m people will have become unemployed as a result of the pandemic.

Its numbers for the public finances are even more eyecatching. This year government borrowing – the budget deficit – will be £267bn more than it expected before the pandemic, and £87 billion more next year, 2021-22. By the end of this parliament, government debt will be £600bn higher than it previously predicted. That is more than £9,000 for every man, woman and child in the country.

What do we conclude from these numbers? Many people will look to the example of Sweden, which did not have the same kind of lockdown as the UK, relying on voluntary social distancing, restrictions ion gatherings of more than 50 people, table-only service in bars and restaurants and limits on care home visits (where, as in this country, the coronavirus problem was worse). Sweden will suffer a smaller fall in GDP this year, 7.8% according to the OECD, and Covid-19 deaths there per 100,000 people are lower than in Britain.

No two countries are the same but one assumption early in the crisis was that Sweden was a different country and British people could not be trusted to abide by voluntary rules, so more draconian measures were needed. That still informs the government’s approach, though the vast majority of people in Britain have followed voluntary guidelines, and probably could always have been trusted to do so.

Most economists would say there is no trade-off between dealing with a health emergency and the economy, and that tackling the disease was essential to a sustainable recovery. We should remember that the economic damage began even before lockdown was imposed.

That general principle should not, however, give a free pass to governments in their response to a public health emergency. We were unfortunate that this pandemic landed on Boris Johnson’s watch, when we needed focus and a grasp of detail. This newspaper has catalogued the many missteps the government made in response to the crisis under his leadership. Six months on from the imposition of the lockdown, the government is struggling particularly on testing, and its rationale, which once was to prevent the NHS from being overwhelmed, has become fuzzy.

The economy, meanwhile, has suffered one of the biggest hits in the world. The OECD’s interim economic outlook, published last Wednesday, showed that the UK’s projected 10.1% fall in GDP this year compares with 3.8% in America, 7.9% in the eurozone, 5.4% in Germany and 5.8% in Japan. Of the G20 countries highlighted by the OECD, only Argentina, Italy, India, South Africa and Mexico do worse, marginally, than the UK this year.

We will only know the full Covid-19 scoreboard after this winter and beyond. On current data, the UK has suffered the worst of both worlds, a deadlier health crisis than most and one of the biggest economic hits. We will see whether this remains the case.