Can we afford another lockdown?

[Gadget88]

We of course dont want another lockdown. Many businesses seem to be "milking " the Furlough system however while it's still paying out 80 percent. In my town we have 2 out of 3 Greggs, both Costas, a Burger King, most charity shops and a few other non essential shops which have still not opened. I understand not all can open at once. The Furlough system should after the 4th July be ONLY for the businesses which CANNOT trade yet such as nail bars, gyms etc not ones which can trade.

Yes and I seen one Greggs close at 3pm with limited food. The government also said food outlets never had to close in first place. What’s in it for the employers not to open? Do they get a rent relief? No wonder intu went bust.

 

[Reliablebeam]

I know the Irish and French governments have said they are not going to do another lockdown. I think the Italian governments may have said the same thing.

On the other hand, I have noticed some of the NHS test and track adverts saying ’Don’t risk another lockdown‘, but this could be however an empty threat to increase compliance with contact tracing.

Thanks I thought it was the French government! I think the Danes and Norwegians have said something similar...

 

[45107]

The government also said food outlets never had to close in first place. What’s in it for the employers not to open?

Lack of demand. Did you not notice before the "lockdown" that footfall in town/city centres and public transport dropped dramatically ?

 

[bramling]

Lack of demand. Did you not notice before the "lockdown" that footfall in town/city centres and public transport dropped dramatically ?

A difficulty is that some of this lack of demand may now be likely to persist for some time. The city of London, for example, is still pretty much dead, and it seems to be the case that working from home isn’t going away for the time being at least.

For how long can the taxpayer continue to indirectly subsidise reduced revenues for businesses which are non-vital, especially as the list of things requiring government bail-outs is getting longer and longer?

 

[Bantamzen]

I think things will improve somewhat in GDP terms in fairly short order, but there are so many inherent drags that have been created that will delay returning to anything like 'normal'. Many people are or soon will be unemployed, and I don't see many now jobs being created in the short term that will be available to them. Those who still are employed will be looking far more carefully at their expenditure. Those businesses that survive will also be looking at reigning in their expenditure, with all the knock-on effects on other businesses. Few will want to create new small businesses; those that still do will find it very hard to get investment.

I expect that fairly soon we will start to feel the effects of the economic lockdown, and fall into a deep recession. How anybody could look at your linked graphs and declare "this is fine" I don't know, but I'm sure one or two members will attempt it in the near future. What we are actually facing is a downturn the likes of which we haven't seen for centuries, it will make the 2008 crash look like a statistical blip. And let's not forget, it took almost a decade of austerity to get back to an economic "normal" after that.

Perhaps this is why politicians have been touting the phrase "a new normal"? The "new normal" being "you proles are going to have to pay for all this".

A difficulty is that some of this lack of demand may now be likely to persist for some time. The city of London, for example, is still pretty much dead, and it seems to be the case that working from home isn’t going away for the time being at least.

For how long can the taxpayer continue to indirectly subsidise reduced revenues for businesses which are non-vital, especially as the list of things requiring government bail-outs is getting longer and longer?

In short we can't. We have a simple choice, start getting back to normal, or kiss goodbye to any spare income many people enjoy as taxes go through the roof.

 

[DannyMich2018]

Lack of demand. Did you not notice before the "lockdown" that footfall in town/city centres and public transport dropped dramatically ?

Some towns no doubt different to others. Throughout lockdown the places which stayed open in my town such as Wilkos, B and M, supermarkets etc were busy much of the day and even now most places which have re opened have too and I've noticed town much busier, not like pre lockdown levels but not bad levels really at all no doubt helped by recent good weather.

 

[philosopher]

I expect that fairly soon we will start to feel the effects of the economic lockdown, and fall into a deep recession. How anybody could look at your linked graphs and declare "this is fine" I don't know, but I'm sure one or two members will attempt it in the near future. What we are actually facing is a downturn the likes of which we haven't seen for centuries, it will make the 2008 crash look like a statistical blip. And let's not forget, it took almost a decade of austerity to get back to an economic "normal" after that.

Perhaps this is why politicians have been touting the phrase "a new normal"? The "new normal" being "you proles are going to have to pay for all this".



In short we can't. We have a simple choice, start getting back to normal, or kiss goodbye to any spare income many people enjoy as taxes go through the roof.

I agree. Unless there is a return to something equating to the 2019 normal within the next few months I think the world is in deep trouble economically. The ‘new normal’ I reckon will lead to economic disaster if it continues for more than a year. The new normal I predict will result in a financial crisis driven by mass bankruptcies in the retail, hospitality and commercial property sectors, which will make the 2008 crash look like a walk in the park.

The problem is that large sectors of the economy such as retail, the hospitality industry, offices, public transport, etc just are not set up for social distancing and retrofitting them to work with social distancing would be very expensive. In the short term, social distancing can only work if much of the activity at these places instead occurs at home. Pubs and the retail sector will struggle to operate profitably with social distancing and the social distancing measures themselves will discourage people from using them. In addition many office based firms will conclude they no longer need large offices and will continue to operate largely with home working.

The net result is that company after company in the retail and hospitality sectors will call in the administrators and firms will stop renewing their leases on offices. City centres will become a mass of abandoned shops, restaurants and offices. The owners of these properties will be sitting on largely worthless property that can only be let at a knockdown rate and as a result they will start defaulting on their loans big time. We perhaps have already seen the start of this with Intu going into administration this week.

With so many sectors of the economy going bust, the banks will be sitting on worthless loans and themselves will start going under. However unlike in 2008, governments, which in most Western countries are now heavily in debt may not be able afford to bail them out.

On top of this countries like Greece are still in a very dodgy situation. If in 2021 they have another extremely lacklustre tourist season, which will likely occur if social distancing is still in place in a years time, this may be what finally pushes them over the edge.

 

[Bantamzen]

I agree. Unless there is a return to something equating to the 2019 normal within the next few months I think the world is in deep trouble economically. The ‘new normal’ I reckon will lead to economic disaster if it continues for more than a year. The new normal I predict will result in a financial crisis driven by mass bankruptcies in the retail, hospitality and commercial property sectors, which will make the 2008 crash look like a walk in the park.

The problem is that large sectors of the economy such as retail, the hospitality industry, offices, public transport, etc just are not set up for social distancing and retrofitting them to work with social distancing would be very expensive. In the short term, social distancing can only work if much of the activity at these places instead occurs at home. Pubs and the retail sector will struggle to operate profitably with social distancing and the social distancing measures themselves will discourage people from using them. In addition many office based firms will conclude they no longer need large offices and will continue to operate largely with home working.

The net result is that company after company in the retail and hospitality sectors will call in the administrators and firms will stop renewing their leases on offices. City centres will become a mass of abandoned shops, restaurants and offices. The owners of these properties will be sitting on largely worthless property that can only be let at a knockdown rate and as a result they will start defaulting on their loans big time. We perhaps have already seen the start of this with Intu going into administration this week.

With so many sectors of the economy going bust, the banks will be sitting on worthless loans and themselves will start going under. However unlike in 2008, governments, which in most Western countries are now heavily in debt may not be able afford to bail them out.

On top of this countries like Greece are still in a very dodgy situation. If in 2021 they have another extremely lacklustre tourist season, which will likely occur if social distancing is still in place in a years time, this may be what finally pushes them over the edge.

Indeed. Greece is one country that really can't afford even one year's worth of disruption, something like 70% of the Greek Islands economy is reliant on tourism. That is why their government is so keen to kick start the holiday season and get at least some of the income flowing again. And we cannot be complacent here in the UK, we don't rely quite so heavily on tourism but the leisure & retail sectors make up a very large part of our economy. Think about it, at one point there were 9 million people in this country who were furloughed. Nine million, its insane when you think about it. Yet there are still people than can't, or more likely won't accept the economic impact of this. We are talking a loss of nearly of all annual tax revenue in the space of just 3 months, yet the locktivists continue to pretend that everything is fine. Except it isn't, it really isn't. 2021 is going to be a much more difficult year than 2020.

 

[Huntergreed]

Indeed. Greece is one country that really can't afford even one year's worth of disruption, something like 70% of the Greek Islands economy is reliant on tourism. That is why their government is so keen to kick start the holiday season and get at least some of the income flowing again. And we cannot be complacent here in the UK, we don't rely quite so heavily on tourism but the leisure & retail sectors make up a very large part of our economy. Think about it, at one point there were 9 million people in this country who were furloughed. Nine million, its insane when you think about it. Yet there are still people than can't, or more likely won't accept the economic impact of this. We are talking a loss of nearly of all annual tax revenue in the space of just 3 months, yet the locktivists continue to pretend that everything is fine. Expect it isn't, it really isn't. 2021 is going to be a much more difficult year than 2020.

I agree entirely. The economic damage is becoming more worrying each day that passed. And when people say things like “we’re easing too soon” or “we need to lockdown again” it’s clear they just don’t understand economics or how the economy works.

I’m feeling particularly frustrated as my generation is going to likely have to pay for all this for decades to come, and that’s not a prospect I look forward to, especially when I feel they’re making it considerably harder than they need to be.

I’m extremely fearful of a “second wave”, not for the virus, but for the sheer scale of damage a second lockdown would cause to the economy.

 

[Enthusiast]

Yet there are still people than can't, or more likely won't accept the economic impact of this.

Indeed. Here's an earlier passage from this very thread:

"This thread seemed mainly intended to be a consideration of whether the UK as a country can afford this - and the answer is a firm yes, still."

i.e. The government has borrowed more in a month than it planned to borrow in a year. But we've all still got bread and butter. Most of us have a roof over our heads. We've got enough money for a pint if and when the pubs reopen. So the government can borrow a bit more should we need to do it all again. Sorry, utter madness.

 

[Jamesrob637]

A death toll of "only" 100 today does reassure me a little that the virus is slowly disappearing. I was marginally concerned by the previous two days not having been the lowest Thursday and Friday respectively, however on the presumption that tomorrow's and Monday's figures will be rock bottom, the seven-day rolling average is still decreasing. I usually do the total of Tuesday to Monday and divide by seven; even if absolutely no deaths are reported tomorrow and Monday the rolling average for this week will be 108. In addition, I had a prediction of (high) double digits Tuesday to Saturday by the end of June. On the presumption that Tuesday (the last day of June) will be higher than today, that makes me inaccurate by a margin of one.

By the way I used a figure of 171 for Tuesday not 280 as I base things on the "past 24 hours" figure.

 

[AdamWW]

You obviously haven't done the same sums that I have. Up to now the government has spent around £300bn. That's just for the last three months or so. That is £4,600 for every man, woman and child in the country. In some of the work I do I encounter many people who have trouble rustling up £100 for a speeding fine. So let's look at it another way. Let's assume that Prof. Fergusson was right and 500,000 people would have died without lockdown and let's be generous and say that was the number the lockdown saved. Each one has cost (up to now) £600,000. "Ah, but you can't put a price on human life". Well you can, actually. At least the National Institute for Health and Care Excellence (NICE) can. Their guidance suggests that the maximum that should be spent to prolong a patient's life for up to two years is £30,000. So each of the 500,000 lives saved (if indeed that is the figure) has cost 20 times the NICE guidance for spend on "normal" diseases.

The UK clearly cannot continue to haemmorage cash at the current alarming rate. A second lockdown is unthinkable. More than that, when the drains are finally lifted to examine this affair (which will be long after the current actors have left the stage) it will be established that the strategy which involved the first one was a blunder of absolutely epic proportions.

Doesn't that make the assumption that letting coronavirus run rampant in the UK (and almost certainly overwheling the NHS) would have absolutely no effect on the economy?

Incidentally, in the UK is the cost per avoided fatality from implementing TPWS along with all the current crash-worthiness requirements less than £30k?

 

[Enthusiast]

Doesn't that make the assumption that letting coronavirus run rampant in the UK (and almost certainly overwheling the NHS) would have absolutely no effect on the economy?

We were told about five weeks or so ago that the NHS was then resilient enough to withstand a larger outbreak. The stated aim of the lockdown was to achieve that position. Since then the goalposts moved and it now seems we aim to avoid all spread. There would have been some economic affect with such a mass outbreak but I suggest it would be nowhere near as great as shutting the economy down for three months (and counting) as we have done.

 

[Jozhua]

Funny, I was listening to an interview with an epidemiologist about the Coronavirus lockdown in the States (or at least some of them) and he said it would probably go on for a month, until more information could be found to work out what the risks are and what risk governments and society is willing to tolerate...

...Three months later, the information is still not there.

Another point I would make is that "lockdown" is likely not the only way the spread of the virus can be slowed.

I'd really like to share this interesting article by Erin Bromage about how the virus spreads:
https://www.erinbromage.com/post/the-risks-know-them-avoid-them

He was on a Podcast "Factually" where he talked some more about lowering the risk when re-opening. Essentially, it boils down to increasing ventilation in buildings, mask wearing in enclosed spaces and being outside as much as possible. In fact, the infectiousness of the virus is estimated to be 18-20x higher inside. He is somewhat against re-opening, but he is acknowledging the reality that it is going to happen.

He has been doing consultation work on re-opening businesses in the US safely and essentially is advising "creative" solutions, like converting car-parks into outdoor dining spaces.

I think we should be following some of this newer science and encouraging businesses to use outdoor space to re-open. Even if it's a tad rainy, the temperatures aren't too bad. And knowing how much lower the risk is, I would feel much safer sitting outside at a restaurant/pub than indoors. I think we should also try and encourage outdoor market style things, fast food restaurants could start serving customers outside, or allow them to pick up at an outdoor counter after placing a mobile order. Let's expand street dining, how about appointments with services like banks taking place outdoors, under marques?

Then we should install large fans and portable ventilation systems to massively increase the turnover of air inside stores and places that have to be inside. In fact, I think this should be done as a priority. Along with aircraft style HEPA filters to constantly clean particles out of the air. Essential stores like supermarkets should probably start to require face coverings, as potentially exposing yourself in these places is non-optional.

So I guess, I'd say that we can re-open, if we are willing to make changes and adaptations which are frankly much less disruptive than a full "lockdown". Considering the US has many more cases than us at the point of their lockdown easing, I think we're in a good state to move forwards with some adaptations.

Have you taken into account the increasing amount of evidence that not all people exposed to the virus produce antibodies, but use other mechanisms of the immune system to fight it off? The proportion who test positive for antibodies are the minimum number of people who have been exposed; the actual number could well be considerably higher.

Yeah, you may be right on that, unfortunately I don't think we have the technology to test that.

Perhaps the only note of caution with that could be whether this weakening is due to warmer weather?

No, definitely not. Perhaps the only thing that could be contributed to warmer weather is the fact that people will be spending less time inside.

The bitter irony being that China looks set to emerge from the whole thing comparatively unscathed, whilst America and Europe burn. One could certainly be forgiven for wondering whether it was deliberate...

Hmm, I think that the situation in Wuhan was much worse than they were letting on. Just look how fast it blew up in Europe and America, then consider that the government wasted time ignoring it. I think, at least in Hubei province, the virus has spread as much as in Italy or the UK at minimum. Fortunately the CCP does not value human life, therefore they will come off relatively unscathed.

 

[Bantamzen]

Indeed. Here's an earlier passage from this very thread:

"This thread seemed mainly intended to be a consideration of whether the UK as a country can afford this - and the answer is a firm yes, still."

i.e. The government has borrowed more in a month than it planned to borrow in a year. But we've all still got bread and butter. Most of us have a roof over our heads. We've got enough money for a pint if and when the pubs reopen. So the government can borrow a bit more should we need to do it all again. Sorry, utter madness.

Mad isn't it, yeah we can just keep borrowing money until a vaccine comes along (could be a year, maybe a lot longer, possibly never) or the virus goes away. Its not not like we will have to pay it back is it? Oh wait, yes we will. And guess who is going to have to pay for it? Austerity v2.0 anyone?

I'd really like to share this interesting article by Erin Bromage about how the virus spreads:
https://www.erinbromage.com/post/the-risks-know-them-avoid-them

He was on a Podcast "Factually" where he talked some more about lowering the risk when re-opening. Essentially, it boils down to increasing ventilation in buildings, mask wearing in enclosed spaces and being outside as much as possible. In fact, the infectiousness of the virus is estimated to be 18-20x higher inside. He is somewhat against re-opening, but he is acknowledging the reality that it is going to happen.

He has been doing consultation work on re-opening businesses in the US safely and essentially is advising "creative" solutions, like converting car-parks into outdoor dining spaces.

I think we should be following some of this newer science and encouraging businesses to use outdoor space to re-open. Even if it's a tad rainy, the temperatures aren't too bad. And knowing how much lower the risk is, I would feel much safer sitting outside at a restaurant/pub than indoors. I think we should also try and encourage outdoor market style things, fast food restaurants could start serving customers outside, or allow them to pick up at an outdoor counter after placing a mobile order. Let's expand street dining, how about appointments with services like banks taking place outdoors, under marques?

Then we should install large fans and portable ventilation systems to massively increase the turnover of air inside stores and places that have to be inside. In fact, I think this should be done as a priority. Along with aircraft style HEPA filters to constantly clean particles out of the air. Essential stores like supermarkets should probably start to require face coverings, as potentially exposing yourself in these places is non-optional.

So I guess, I'd say that we can re-open, if we are willing to make changes and adaptations which are frankly much less disruptive than a full "lockdown". Considering the US has many more cases than us at the point of their lockdown easing, I think we're in a good state to move forwards with some adaptations.

"Even if its a tad rainy". Yeah, about that. We have been unbelievably lucky this year in that the weather has for the most part been fine, meaning outdoor queuing as many of us have been doing hasn't been too bad. However that isn't going to last, indeed as I was walking home from the shop yesterday proved, it has already broken and I got completely drenched. And of course in the UK we have months were it can drop well below zero degrees centigrade, not exactly conducive for al fresco dining.

As for compulsory mask wearing in supermarkets, we have not used them en masse in them for three months yet have seen the infection rates come down. So no, we don't need that thank you.

 

[AdamWW]

We were told about five weeks or so ago that the NHS was then resilient enough to withstand a larger outbreak. The stated aim of the lockdown was to achieve that position. Since then the goalposts moved and it now seems we aim to avoid all spread. There would have been some economic affect with such a mass outbreak but I suggest it would be nowhere near as great as shutting the economy down for three months (and counting) as we have done.

Quite possibly.

But your numbers seemed to assume absolutely no effect on the economy if there was no lockdown, which I think is somewhat unlikely. For example quite possibly a lot of restaurants, pubs etc. would have had to lay off a lot of staff or shut down completely anyway, necessitating at the least the government paying out benefits even if there was no furlough scheme in the no-lockdown world.

 

[AdamWW]

He was on a Podcast "Factually" where he talked some more about lowering the risk when re-opening. Essentially, it boils down to increasing ventilation in buildings, mask wearing in enclosed spaces and being outside as much as possible. In fact, the infectiousness of the virus is estimated to be 18-20x higher inside. He is somewhat against re-opening, but he is acknowledging the reality that it is going to happen.

He has been doing consultation work on re-opening businesses in the US safely and essentially is advising "creative" solutions, like converting car-parks into outdoor dining spaces.

As I complete non-expert, this sounds very likely to me. There is a lot of emphasis on the 2 m rule, but if you're in a building breathing the same air as everyone else I'm not sure how much it helps, and it does a lot of harm. Much better ventilation sounds like an excellent plan to me.

If we're in this for the long haul, compartment trains with a ventilation system that doesn't mix air between compartments (like, I don't know...an open window?) might be a good plan. Compartments wouldn't necessarily have to be for exclusive use, but would mean one person would be likely to infect another 7 at most, rather than a carriage-full.

As for the virus weakening - surely the only way it could do that would be by a change to its RNA, which we would know about from genetic sequencing?

Edited to add: My thinking on the importance of ventilation has been rather influenced by one article I read on the web a few weeks ago - and I've just realised that it's the same one linked to above...

 

[philosopher]

Quite possibly.

But your numbers seemed to assume absolutely no effect on the economy if there was no lockdown, which I think is somewhat unlikely. For example quite possibly a lot of restaurants, pubs etc. would have had to lay off a lot of staff or shut down completely anyway, necessitating at the least the government paying out benefits even if there was no furlough scheme in the no-lockdown world.

No lockdown obviously would have had an impact on the economy as you say, however its impact would have been limited to a few months.

A prolonged period of social distancing prolongs the economic impact and furthermore increases the chances of permanent structural changes to the economy. The hospitality, retail and office sectors in particular could be in trouble for many years after this, even once social distancing ends due to changes in people’s behaviour as a result of all this. It could take some years for the economy to adjust to these changes.

These structural changes are what concern me the most and this is why I think the recession will last a lot longer than commonly assumed.