COVID19 Reveals A Naked British Government

Cartoon by Peter Brookes

You only learn when things go wrong, as my first boss used to say, and COVID19 is giving the British a masterclass. The pandemic has revealed not only that their government failed them in very practical ways through incompetence, but that it has also unwittingly abandoned many of its core capabilities. A government with an 80 seat majority in Parliament is actually powerless. The British Prime Minister has no clothes.

This is not about small or big government, centralised planning versus devolved powers or libertarianism versus socialism. All models of government must deliver at the basic level that a pandemic requires. Yet since 2015, three Tory governments have failed to ensure that Britain maintained stockpiles of necessary equipment and adequate hospital capacity or was capable of delivering food and necessary equipment to where it's needed. It's not as if the "Opposition" were any more capable of stepping into the breach. Military planners had to be called upon to co-ordinate the response, and their troops to deliver it while ministers remained unable to communicate about the impact and response in a way that built trust in the government's ability to handle this crisis - or the next...  Brexit transition will end without a deal in December, amid far lower investment than in other 'G7' nations; foodbanks abound while crops rot in the fields, and both unemployment and borrowing are beginning to rocket.

Who's managing Britain's state of readiness?

Maintaining a state of readiness for a pandemic or epidemic is obviously critical to fighting it. But that's a process that has to be managed. Stockpiles of food and equipment pass their use-by dates and must be replaced and replenished. Contracts for services and personnel must be renewed to support logistics and distribution. Households need their own stockpiles and workers must be ready to work from home or remotely at short notice. Emergency cash subsidies have to reach bank accounts promptly.

Repeated assurances by the British government that the UK health and social care system was "well-equipped" and "well-prepared" for a pandemic were clearly wrong, just as they have been concerning preparations for Brexit and for recent floods.  Channel 4 News uncovered evidence of systemic failure to monitor and maintain stockpiles of PPE and respirators. Almost 80% of respirators in the national pandemic stockpile were out of date when coronavirus hit the UK, and 45% of PPE boxes held out of date equipment. There were no protective gowns, despite recommendations to buy them last year.  Emergency funding has been slow to arrive, and largely involves loans through banks for which government guarantees had to be extended to 100% as they are unlikely to be repaid, suggesting little planning for such an event.

But who, if not the government, manages the process of remaining ready for a pandemic, even if the actual work is outsourced to the private sector?

Responsiblity for the pandemic stockpile and distribution process may have been delegated to Public Health England and a public sector management company, Supply Chain Coordination Limited, but accountability lies with the British government, just as the banks have insisted on its financial backing over the distribution of funding.

Managing the Response

The British government actually wound down its dedicated pandemic response management capabilities over the past four years. In its defence, it might say that it had merely 'streamlined' its ability to deal with all types of catastrophe, and that reflects a trend:

"Without that overbearing [nuclear] threat, much of the planning and preparedness that was set up by 20th Century governments has either fallen away or been subsumed into other crisis management plans. Schemes for how to deal with severe flooding, terrorist attacks or other events that may displace large numbers of people have likely drawn on the old Cold War planning..." How Prepared Are We For A Nuclear War? BBC Future 22. 07.2017

Terrorist attacks have luckily been very localised, enabling prompt containment. Yet, time and again the British government has responded poorly to larger scale floods. Similarly, the supply and distribution of intensive care machines, PPE and testing/tracing capability are large scale challenges this government has failed to meet, even declining involvement in international procurement exercises and offers from local producers, only to later 'beg' for ventilators and protective equipment. Panorama revealed hidden mistakes in actually delivering PPE to health and social care workers, not to mention delays in testing.

As a result, what should be reliable delivery forecasts have become merely arbitrary, aspirational 'challenges' with no certainty as to whether they can be met, let alone sustained.

Increasingly, Johnson's government has fallen back on the British Army's command and control structure to directly manage situations that the government itself should be managing. He has had to rely on the British Army to deliver PPE and testing logistics (as well as construction of makeshift hospitals to cope with anticipated demand for intensive care beds). This reliance, together with the vast number of excess deaths, illuminates the gaps between assurances and reality.

It cannot be acceptable for any government to have lost effective oversight of the process for delivering essential items in a crisis.

Trusted Communications?

There is a huge amount of literature on the importance of trustworthy leadership in a crisis. After all, it is only human to look for guidance on what's happening, what to do and what to expect amidst a major disaster. Without it, humans simply do as they please, with disastrous effects - as the 1918 influenza pandemic showed, even in small rural communities.

Trust is a function of credibilty, which itself is built on honesty and transparency.

Boris Johnson has never been on even terms with the truth and he and his various substitutes at the daily British government press briefings have continually demonstrated a lack of honesty and transparency over every element of COVID19 preparedness and response.

This has provoked both anger at the false assurances, and many media investigations into the true position, including those mentioned earlier. Yet Johnson's government continues its boycott of certain media outlets and ministers have even resorted to muting journalists who ask probing questions during the controlled coronavirus media briefings.

Johnson's latest target for tests was dismissed out of hand, and his confused messaging over whether lockdown measures might be eased produced directly conflicting headlines from two national newspapers in the same stable within a day of each other. There have been U-turns over so-called "plans" to re-open schools as well as car-sharing and likely the belated insistence that those arriving in the UK must self-isolate for 14 days. A major financial stimulus package has been deferred to the autumn. The abominal failure to discipline, let alone sack, Johnson's political adviser over his lockdown adventures is now the stuff of legend.

In these circumstances it is no surprise that Johnson and his health minister score low on trust over COVID19, and the majority of people tend to rely on others for the facts:

Fewer than two in five (36%) said they trusted what the prime minister, Boris Johnson, said on the subject, while just 37% trusted the information given by the health secretary, Matt Hancock.

However, 59% said they placed their faith in the chief medical adviser to the UK government, Chris Whitty, and 55% said they would trust the director general of the World Health Organization, Dr Tedros Adhanom Ghebreyesus.

It remains to be seen how generalised this lack of trust might become, but Johnson's own approval rating has plummeted.

This is encouraging. Any society must consider both the systemic errors and their concealment to be unacceptable if it wishes to protect itself against disaster as well as it can. Whether Starmer is any more likely to get a grip on the situation remains to be seen.

In the meantime, Johnson's Brexidiot government must put some clothes on, even if only to spare us the sight of them...

Role of The Entrepreneur

I recently made the point that, instead of looking to the state for our personal wellbeing, the buck stops with each of us personally - whether as voters, taxpayers or whatever - to ensure the wellbeing of others. Some basic, inevitable economic constraints mean the state simply can't do that job for us on any sustainable basis. This is also the difference between an entitlement culture in which we behave as passive victims of our institutions, and an empowerment culture, in which we seize control of those relationships. Ultimately, the state can only serve as a facilitator, enabling each of us to meet our fundamental personal obligation through private enterprise.

But how can we meet those obligations? Which business activities will be the winners of tomorrow? And how can the state help?

Peter Urwin's "Self-employment, Small Firms and Enterprise" very helpfully explains the role of self-employment, with and without employees, as our primary source of "genuine entrepreneurial insight". Big corporations are of little use here. Businesses don't start big. Entrepreneurs start out self-employed, either with or without staff. Yet, picking winning business ideas is impossible: while "entrepreneurship is crucial for economic growth... we have no idea where it will come from - not even in the most general terms." As a result, the best that we - and government - can do is to ensure "a climate in which enterpreneurship can thrive".

Peter lays out some interesting stat's for the UK:

• over half of all new businesses won't exist in 5 years time - yet this is no bad thing: serial entrepreneurship seems to have a greater influence on success than academic qualifications;

• you're more likely to be self-employed if you have dependents under the age of 16;

• about 20% of males who are active in the labour market are self-employed (42% of those aged 65+);

• there is no obvious impediment to being self-employed, and people who struggle for various reasons to fit the big firm mould tend to be self-employed or work for small firms;

• small firms are easy to start, but face impediments to growth through tax and regulation, such as taking on employees - in the UK, only 6% of new firms create over half of all new jobs.

• in particular, "the costs of compliance... are regressive, as there are economies of scale in tax compliance... product market regulation and employment protection legislation". These costs have remained constant despite efforts to eliminate red tape. However, these costs don't prevent people starting up or remaining self-employed with no employees, they inhibit expansion.

It's suggested that there's a distinction between being self-employed for tax planning purposes, and being self-employed for 'genuine' enterpreneurial reason. But if it's impossible to pick who among the self-employed will be successful, then I don't see how you can reliably make this distinction, except with hindsight. Step one to starting your own business is to become self-employed. Perhaps you take that initial step for cynical tax planning reasons, or maybe with a view to figuring out what sort of business you might start. In either case a bigger business could emerge, with lots of employees. Life's what happens to you while you're making plans. The motives are pretty meaningless.

However, Peter rightly points out that there's little room for entrepreneurial activity in large firms - even if self-employed people with the "skills of entrepreneurship" are involved. Those skills essentially being to provide "the central concept around which the firm is initially constituted" and "to unearth the unknown unknowns." I've worked in two start-ups, both of which are still running after 10 and 7 years respectively, and various large firms. Once a bunch of people unite around any business plan it becomes tough to change. Add more years and more people and the job gets harder.

So it's laughable to see big corporate executives and entrepreneurs lumped into the same category, as Luke Johnson recently explained, though the CEOs still at the helm of the companies they created are in a category of their own. This latter group also prove the case for a lack of demand for genuine entrepreneurial skill in big corporations. It's the original vision of the founder that rules, and competing strategic visions aren't welcome. In fact, it's not uncommon for a business to oust its founder only to welcome him back to rescue the ship from doom (e.g. Steve Jobs).

Ultimately, Peter is to be applauded for essentially recommending that small firms should be allowed to retain all their staff as self-employed individuals. This would allow for the rapid expansion of a business around an entrepreneurial concept as it emerges, rather than straining its resources and strangling it in red tape before it has a chance to discover whether the concept will 'fly'. Of course, firms could still choose to offer employment to staff where that is necessary in order to compete in the labour market. But given the healthy, inevitable failure of most small firms within 5 years, and the inability to predict the winners, it seems pointless to require all of them to grind through the cost and admin involved in creating and maintaining the employment relationship.