A silver lining on homelessness from this crisis

The pandemic and the lockdown have given us the chance to think about some of the long-term problems we might solve. We should decide not to go back to having homeless people sleep in shop doorways. We have the chance to try a new approach to solving the problem.

It’s important to understand what the problem is. National Audit Office figures show that a high proportion of rough sleepers who had needs assessed were prone to alcohol addition, drug addiction, or mental illness. These three factors were among the reasons underlying their situation.

In the past efforts have been made in many countries to help street sleepers solve some of these problems so they can be allocated secure accommodation. But Finland now does it the other way round. It’s called “Housing First” because they house rough sleepers first, and then address their problems.

The reasoning is that if people are in secure accommodation with trained helpers and therapists on hand, it is easier to solve problems like alcohol and drug addiction and mental illness than it is trying to deal with people sleeping on the streets.

Tenants are housed in purpose-built or adapted blocks, with their own private space, and crucially, with support services on hand. The programme costs money, but the technique is reckoned to lower the costs otherwise incurred for emergency services and the criminal justice system.

The success of the Finnish programme, running for 13 years, has been remarkable, and has inspired pilot schemes elsewhere, including several in the United Kingdom. Charities assisting these efforts report positive results, with steep drops in the number reporting “bad or very bad” physical health of users, and an even bigger fall in the numbers for mental health conditions.

The pandemic has provided an opportunity to extend this by the use of empty hotel rooms. Some funding allocated to deal with the coronavirus has been used to secure hotel safe spaces for rough sleepers to self-isolate in. There are on-site cleaning facilities, and charities have stepped in to assess needs and provide support. Thousands of rough sleepers have been taken off the streets and housed in hotels block-booked for three months to accommodate them. Modelling by University College London shows this is significantly more cost effective than treating individuals in hospital.

St Mungo's charity describes it as an unprecedented opportunity to stop people returning to the streets. Howard Sinclair, their CEO, says the virus has provided an unexpected opportunity to take people off the streets and provide support for mental health problems or addictions.

The lesson to be drawn from this is clear. It is that providing accommodation and support for rough sleepers is an effective way to address their problems and to help ease them into safer and more comfortable lives. We should make it a priority after the pandemic to pursue this vigorously and to provide accommodation and support for those whose only other option would be to sleep in shop doorways on the street. It works, and we should do more of it.

Incentives matter, really, they do

We’re told that a disaster like Deepwater Horizon could happen all over again. Because the regulations on what people are allowed to do have been relaxed and that just does make gushers on the sea bed more likely:

But experts say an incident of similar scale could happen again and has been made more likely by the Trump administration’s decision to loosen Obama-era safety rules. Those standards had grown from an independent commission’s damning findings of corporate and regulatory failures leading up to the spill.

This is to succumb to the bureaucratic, perhaps statist, delusion. If everything is written down on little bits of paper, if government determines, in detail, what people may do, then nothing bad can happen.

This is not how we humans interact with reality. Incentives really do matter:

BP said on Tuesday it would take a new charge over the 2010 Deepwater Horizon spill after again raising estimates for outstanding claims, lifting total costs to around $65 billion.

That’s around 65 billion reasons why a repeat of Deepwater Horizon is less likely than it once was.

Do note that we’re not saying that there is no value to regulation. At the very least a listing of best practice contains value and we’re even willing to agree that insisting people don’t do stupid things is of benefit. But it is still true that hom. sap. responds to the total set of incentives faced not just the chatterings of the clipboard wielders.

The loosening - or tightening - of drilling regulation is as nothing compared to that fear of losing, again, 65 large. Something we need to recall when designing those regulatory systems of course. It’s that total set of incentives that matter.

Answer the call!

Legend has it that Drake’s drum, the one he left to the nation, can be heard to beat at times when the country is in crisis or at war. It calls for people across the nation to rise up to defend it.

We’re beating that drum now. The nation is in crisis as never before. The economic heart of the nation has slowed, and it needs major and urgent action to revive it. We are beating the drum now to rouse as many of us as possible into action. We look not to those on high to save us, but ideas and initiatives from the little platoons Edmund Burke correctly said made up a nation — the people who, added together, are all that makes us great. 

That drum call goes out to you: a vast army of people with ideas and with energy. We want to hear all of them. Companies stand on the edge of ruin and our prosperity with them. The best way to ensure that our firms survive the lockdown and thrive after is to ensure that they're as free as possible to transact and trade — provide goods, services and increase our wealth once more. 

So we want to hear from you of every tax cut that can lift a burden, and every regulatory change that can lighten the load on businesses that want to grow again. Let us hear of every bureaucratic impediment that stands in the way of renewed growth and expansion, and let us hear of the ways in which it might be suspended or permanently extinguished.

• What regulations should we suspend during and after the lockdown?

• What taxes should we suspend and cut?

• What measures could help restart the economy?

• How should we unwind state interventions?

• Is there anything the Government or public discourse has missed?

Let us have those ideas and initiatives from many and diverse groups, and let them collectively constitute a volume that can be a handbook for rebuilding the economy, and a blueprint for the new Britain that must emerge.

Please answer our call via the link below, send it on to anyone and everyone you know, everyone who everyone you know knows, their dog too if it has a brilliant new tax idea to shout about!

Science should determine the weight of the pig

The government claims that lockdown exit will be triggered only by science. Science today gets the reverence that the middle ages accorded to religion. We need to look more closely. The experience of other countries leaving lockdown will be truly valuable. We must learn from Italy, Denmark and Germany and also Sweden which has had no lockdown at all.  

The government’s chief scientific adviser, Sir Patrick Vallance, has pinned his colours to the R mast: on 1st April, he stated we must get and keep “R, which is the average infection rate per person, below one.”  R, the reproduction number, “is an indication of how much an infectious virus will spread in a population, and various things impact that value,” said Jonathan Ball, professor of molecular virology at the University of Nottingham. “The susceptibility, size and density of the population that the infection is introduced into matters, as well as the infectiousness of the virus itself.”

Estimates of R across Europe vary, not least because, as Imperial College modelling concedes, no one has any idea how many Covid-19 infections there have been. Their report, with over 50 authors, estimates R to have been about 3.87 before lockdowns.  Following lockdowns and other interventions, they estimated a 62% fall to 1.43. As an example of facts not being allowed to get in the way of a good theory, the 30th March their report stated (p.6): “The estimated reproduction number for Sweden is higher, not because the mortality trends are significantly different from any other country, but as an artefact of our model, which assumes a smaller reduction in Rt [reproduction number at time t] because no full lockdown has been ordered so far.”

By contrast, on 1st April the London School of Hygiene and Tropical Medicine, also part of the government’s scientific advisory team, estimated pre-intervention R0 to be around 2.1 and a 70% reduction to 0.62 would result from lockdown and other interventions, e.g. social distancing. They asked 1,300 individuals in lockdown to list their contacts for the previous day and compared the results with an unrelated study in 2006.  The research is not peer-reviewed and a number of caveats will be apparent but at least an effort was made to anchor it in reality.

In short, science is widely divided on pre-intervention reproduction numbers: on 13th March, the Journal of Travel Medicine reported “Our review found the average R0 to be 3.28 and median to be 2.79, which exceed WHO estimates from 1.4 to 2.5.”

Bandying R about is scientificating a simple measurement of whether the number of cases is increasing or decreasing and, if so, at what speed. Is infection accelerating or decelerating and by how much? It has nothing to do with the rate of deaths nor with prediction. And it is undermined by not knowing how many cases there are.  As Jeremy Hunt in The Times on 21st April, has rightly pointed out, contact tracing is critical. That, as the Lancet on 28th February confirms, would also provide the necessary data for estimating, via sampling, and controlling total infections. It is odd that there has been little or no mention of contact tracing from the government or its scientific advisers.

We do not need to track R, just the number of cases.  Whatever the ideal, we must use the numbers we have. Deaths, sad and important though they be, are not relevant for our purpose. Non-hospitalised cases are not known and, again, do not impinge since those infected can recover at home as they do for common colds or flu. Remember that the object of lockdowns and other interventions is to moderate the effect on the NHS.  Hospitalisations, or the “cases” numbers published, are the only leading indicator we have. Monitoring that needs no more than a simple graph, viz.;

The big bogey is the second wave. It is foolish to suggest that can be avoided, or even should be avoided.  Minimising, or at least moderating, it is what matters. Whenever the lockdown exit begins, and contacts increase, a wave of some kind will follow.  The issue is not when exit begins but how it is managed. It is extraordinary that such a simple distinction escapes the government’s scientific advisers.  Furthermore, exit management needs to focus, for the reasons above, on the number of hospitalisations, or the closest proxy available. As that trails infections by between a week and 10 days, the exit should be in fortnightly steps to allow response to significant changes in trend.

Advice from the scientists has been questionable all along. On 20th March, the Scientific Advisory Group for Emergencies (SAGE) stated: “In fast moving situations, transparency should be at the heart of what the government does. We have therefore published the statements and the accompanying evidence to demonstrate how our understanding of COVID-19 has continued to evolve as new data emerges, and how SAGE’s advice has quickly adapted to new findings that reflect a changing situation.”

They then went on to say that the modelling could not be published as the modellers may wish to do so later in academic journals.  Secondly, the site does show SAGE’s current understanding of the situation, but not its evolution. Thirdly, they present possible (guessed) scenarios but neither science nor proposals for government action. Their estimates of public compliance proved wildly wrong and even their estimate that 75% of 80+ year olds would not go to work or attend schools were, surprising as it may seem, low.

All this is reminiscent of the time the Ministry of Agriculture decided that too much guesswork was involved in estimating the weight of pigs.  A committee of science professors from obscure universities was formed. After deliberation, they recommended the acquisition of a plank with the pig tied to one end and a basket to the other.  The plank should be carefully placed with the mid-point on a low wall and the basket gradually filled with stones.  When the plank is balanced, the farmer should guess the weight of the stones.

Private benefit is a public good

I’m often asked how bad the impending recession is going to be. The answer is that nobody has the faintest idea. If they say they do, then they’re either lying or mistaken. 

We’ve had a whole range of figures from the forecaster. From a 5% decline to a 35% decline this year. With things changing so fast, it’s impossible even to guess. 

We might be able to get a clue from the Spanish flu of 1918-9 which was actually far more lethal than Covid-19. US industrial production then  fell by 25% but it had mostly recovered within a year. I don’t expect a quick bounce back this time. 

In previous recessions, business has at least kept going. This time we have closed it down. And our economy is much more integrated than it used to be. Rupture any bit of it and you dislocate the whole. 

Government can help the recovery of course, mostly by getting out of the way: cutting regulations like the land planning rules and taxes like VAT and the taxes on capital and investment: the factory tax. 

Some people might worry about the loss in government revenue doing that but unless we encourage new businesses to spring up and replace the old ones that have been killed by the recession then there won’t be any government revenues anyway. And what does that mean for the funding of welfare benefits and indeed the healthcare system. 

Fortunately most people agree. In polling commissioned by the Adam Smith Institute and conducted by Survation under BPC rules, 72% of people say that they’re supportive of tax cuts designed to boost the economy and jobs after lockdown ends. The largest cohort of support came from the youngest in society. We’re going to need the private sector to survive and thrive if we’re to have a prosperous future, that means reducing the cost of government.

Perhaps Sadiq Khan should have a chat with Trevor Phillips?

Sadiq Khan wants to know why BAME folk are being hit by the coronavirus rather worse than non-BAME in our fair and pleasant land. We’d offer the simple observation that pandemics tend to hit concentrations of population, the BAME population is largely in the big cities and that’s at least a reasonable start to the answer:

It’s by no means a revelation that there’s a link between health and socioeconomic inequalities – certainly not for those who live these lives, or for all the charities, campaigners and organisations, including City Hall, that have been fighting these injustices for years. But one of the unexpected consequences of this crisis is that the depth of these inequalities is being laid bare in such a stark fashion.

Mr. Khan is a politician on the stump and so we get structural problems, inequality, racism - Vote For Meee!

As it happens, Trevor Phillips, who is not a politician with an election all too soon, has also been looking into the same matter:

Concern about this known unknown was etched on the face of the chief medical officer as he addressed the issue at the weekend; factors like genetics, culture, language and religion could be quietly undermining scientists’ attempt to predict the spread of infection. Public Health England has rightly begun an inquiry. But however hard they try, scientists can’t keep pace with the rumour mill and must ensure the emerging conspiracy theories and knee-jerk victimhood do not go unchallenged.

That seems a reasonable point to us.

The pattern isn’t easy to explain. Assumptions about racial biology are unlikely to hold good across a range of non-white groups who are in most ways more unlike each other than they are different from whites. As for poverty, the list of the seventeen most afflicted local authorities includes low-income Brent, but also features multi-ethnic Wandsworth, where median weekly earnings, at £720, are 50 per cent above the national average. And of the virus hotspots, only two appear in the list of England’s ten most overcrowded boroughs. The most significant hotspots outside the capital, Liverpool and Sheffield, are 35th and 107th respectively out of 126 boroughs in order of population density.

That would be both Mr. Khan’s and our own suggestion dealt with then.

One puzzling finding in our report concerns not who is being infected, but is who is not. Were poverty the key determinant, we would expect the virus to be running rampant among Britain’s Pakistani and Bangladeshi Muslim communities. Yet they are conspicuous by their absence in the list of hotspots — no Blackburn or Bradford, no Rotherham, Rochdale or Luton. The London borough of Tower Hamlets is more than a third Muslim — the highest density of any in England — and is sandwiched between two Covid-19 hotspots, Newham and Southwark, both home to substantial non-Muslim minority communities. Yet Tower Hamlets lies in the bottom third of the capital’s infection list: 22nd out of the 32 boroughs.

The surmise that the religious ritual of washing immediately before the five times a day prayers might have something to do with it seems reasonable to us.

The surface point here being that perhaps Mr. Khan would like to have a word with Mr. Phillips - the latter does seem to be doing the research that the former desires, even if the results aren’t quite the electoral gold dust first thought of. This does presuppose that Mr. Phillips could bring himself to converse with Mr. Khan of course but where there is hope and all that.

The deeper point is that a politician on the stump doesn’t appear to be all that good a place to go looking for solutions or even reasoned analysis. Which does rather mean that politics itself isn’t, doesn’t it?

SAGE advice from some economists might help

As the government has said, its strategy on COVID-19 has been driven by the science. Specifically, it has been informed by SAGE, the Scientific Advisory Group for Emergencies.

SAGE comprises a number of very distinguished epidemiologists and physicians. And the same is true of the three other committees that feed them.

These experts supported the economic lockdown—and its extension—as a way of flattening the infection curve, preventing an unmanageable surge in critical cases and deaths. And most of us have gone along with that.

But we are starting to realise that locking down an economy for three weeks is very damaging. Locking it down for six weeks is disastrous. Each business that closes spreads trouble to many more. And they in turn to many more others. So, the failures and unemployment multiply, like a virus ripping through our productive network.

Given the enormity of that, you might think that economists would be involved in the lockdown decisions. But no: there are no economists on SAGE, nor the committees that feed into it. No Roger Bootle, Mervyn King, Paul Ormerod, John Vickers, Patrick Minford nor others who could explain the cost of lockdown and how best to unwind it.

Advice that has such serious economic impact should not be decided by physicians alone but by economists too.

Lockdown and the size of British housing

The man has a point here:

Tom Wall highlights one of the great problems in our housing, lack of space, which is exacerbated by the Covid-19 pandemic (“Two adults, five children, one room: ‘It’s really scary but what can I do?’”, News). We have a confusion of “overcrowding” standards in housing law and even the latest minimum standards for licensing of houses in multiple occupation originated in the 1930s – is 10.22 square metres really adequate for two people to live and sleep in as their permanent home? We need an overhaul of these standards that must recognise the adverse health effects of lack of space and crowding, including the spread of infectious diseases, unintentional injuries and mental ill health.

Prof Gabriel Scally, quoted in the article, is right: the housing market has led to the modern equivalent of the Victorian slums that the new diseases will just love. At the same time, we build the smallest new homes in Europe, so we are storing up problems for the future.

Dr Stephen Battersby

Britain does build the smallest new housing in Europe. The bit that the Good Doctor gets wrong being “the housing market has led to…” the problem in fact being an absence of market, not existence. For planning laws only allow permission to be granted for projects of minimum density - it is this which leads to 30 to 35 dwellings per hectare. Given the cultural preference for a des res with a garden this and this alone explains the less than 80 m2 rabbit hutches now built as new housing.

Back before we had such a prescriptive planning system speculative builders used to throw up those 30s semis and detacheds that people now fight to be allowed to buy. One solution is therefore our oft suggested blowing up of the Town and Country Planning Act 1947 and successors.

Another possibility is that we just insist upon those in the planning system - from the MPs who vote on it, the civil servants who administer, the local councillors who approve and the planning officers who examine - live, en famille, in the estates of shoe boxes they allow. As we are rather sure very few to none of them do now. At which point we can just leave it to public choice economics, that insistence that public servants are subject to the same economic incentives as the rest of us, to return us to a system of new dwellings being houses that people would like to live in being built in places that people would like to live.

That or the blowing up, either would work.

For once we're going to take The Guardian's advice

The Guardian tells us that the current troubles mean we should think about food, where it comes from, how, what we might do about all of that:

The Guardian view on the future of farming: let’s think about food

Editorial

The British food system, as well as individuals’ diets, needs to be balanced. Price is not the only factor

Entirely true that price is not the only factor, it never is and never has been. The aim of having an economy at all, let alone an economic policy, is to maximise human utility. Price will of course be an influence here, possibly a dominant one, but never the only.

As it happens the same edition of the same newspaper warns that the country might be running out of tinned tomatoes:

Suppliers ration stocks of tinned tomatoes after surge in demand

“Ration” is a bit extreme as a description, warn that the supply is not infinite perhaps:

Italian tomatoes make up about three-quarters of UK stocks, according to the Grocer trade journal, and are canned between June and September.

Diego Pariotti, the head of export at Conserve Italia, which owns the Cirio tinned tomato brand, said it could meet usual order levels but not “crazy demand”. He added they had told customers: “If you don’t start calming the fever we won’t get to the next crop.”

....

McDiarmid said: “It’s a seasonal crop. It’s finite. What was picked last year is what was picked and that’s all there is until 2020 harvest. We can’t bring forward the harvest.”

Which is a useful education in how things used to be. The Hungry Times were not in winter, they were in June and July. It is just before the next harvest that the supplies from the year before are in danger of running out. It is the weeks just before the fleets of combine harvesters sweep through the fields of golden grain that bread is in short supply.

With tomatoes there is added detail. It’s possible to hothouse them in the UK but as Adam Smith said about wine in Scotland it’s easier - consumes fewer resources - to get the product shipped in from where it grows freely under the Sun. Spain - largely employing a different cultivar - ships us fresh tomatoes, Italy these canned being talked about.

So, thinking about farming and food, what should we do about this? Clearly, we should be maximising the number of different harvests that we gain our supplies from. The best method of gaining copious year round edibles being to ship in from places that pick and process across the calendar rather than being reliant upon just the one event a year. Southern Hemisphere farms, for example, might well be canning tomatoes in the January to March window to match that July to September in Italy. Which would neatly cover any possible shortages in May and June, wouldn’t it?

We have indeed done what The Guardian advises, thought about food and farming. We desire more globalisation and free trade in food. Not that we expect The Guardian to come to the same conclusion, despite its origin as a paper campaigning against the Corn Laws, but we can hope, right?

We're against the idea of salary caps

We have entire think tanks - the High Pay Centre for example - dedicated to the idea that some people earn, or are paid, too much. Thus, perhaps, there should be limits, salary caps, on how much people may earn. We are against this, yea even in association football:

Tony Bloom, the Brighton & Hove Albion chairman, suggested that it may be necessary to introduce a salary cap for top-flight players as a depressing picture started to emerge yesterday of the financial predicament Premier League clubs are in.

The reason for our opposition is that this is a distinctly pro-capitalist move.

Bloom, while seeing the problems with introducing a salary cap, was not averse to the idea. “If it’s going to work, it needs to be worldwide — certainly Europe-wide — and I see big difficulties with that,” he said.

“But something, I think, does need to change. Otherwise, salaries, player salaries, will always increase far too much and it becomes unaffordable for clubs. Certainly, I think something like that will be talked about. I see it being very difficult to come to fruition, though.”

Markets work best when they’re allowed to work. An outcome of this being that the money flows to whoever has the scarce resource. Being able to play professional sport at the top level is a scarce talent - certainly more scarce than the possession of a ground to play it upon, the ability to design and or buy a strip or the possession of a brand name. Thus all and more of the money in sport flows through to the players, none to a negative amount sticks to the hands of the capitalists.

We’re entirely happy about this.

It’s notable that American sports teams are generally profitable. They are also all a cartel - there’s no promotion up or down into and out of the professional leagues, making the team itself the scarce item - and have strict salary caps. It is these two things that limit the portion of the overall cashflow heading toward players and thus make them profitable. European sports near all have that promotion up and down. In association football a club can move from only just above amateur to the very top rank in mere years as both Rangers and the old Wimbledon and now again the new one have shown.

This does mean that we’re against UEFA’s financial fair play rules as well, which are a lighter version of the same restriction upon player incomes.

This is all most apparent in sports, where the scarcity of the talent is most obviously pronounced. But it is the same in any arena where salaries are restricted - it’s all a manner of increasing the incomes of the capitalists.

We should point out that we’re entirely happy with capitalists earning, just as we are with labour however talented or not. It’s just that to us financial fair play means the outcome achieved by a free market, not a set of rules designed to favour one side or the other. And the truth is that salary caps, as with other earnings restrictions, favour the capitalists, not labour. Our opposition is to the thumb on the scale, not the measurement itself.