HORROR SHOW

Of all the deficiencies in the official response to the Covid 19 pandemic, the sourcing and provision of Personal Protective Equipment (PPE) to "front line" medical workers has perhaps been the most significant. It has been costly too: £15bn since the meter started ticking in March up until the Chancellor disclosed this figure (by way of an update) to Parliament in early July. In the early days of the pandemic, PPE (or rather the alleged lack of it) was invariably the lead issue on the BBC news. The President of the BMA, Chaand Nagpaul was given unfettered access to bash the government over this issue and his assertions were never challenged. Not even Dr Nagpaul CBE would deny that his interventions were just a tiny bit political; indeed he has form in publicly opining on issues which do not strictly come within the remit of his responsibilities. But the BMA is a powerful union of the dominant producer interests within the UK's healthcare system, and so Nagpaul is allowed to shield within the sacred halo that has settled on "our NHS". It would also be fair to say that his interventions, which the BBC treated as Holy writ, induced a sense of near panic in the Department of Health.

Alas, PPE has become a proper scandal as even the BBC has now sheepishly admitted. As is usually the case when the government and officials are in full "Something MUST be done" mode, money was sprayed around rather too indiscriminately. You might have thought that HMG would have learnt its lesson from the fiasco of awarding a shipping contract to a firm not known for its production of ferries, or indeed of any device which floated, as part of its No Deal Brexit preparations. But no; all sorts of  companies with no known manufacturing connections were awarded contracts to supply PPE, while others which did have the know-how and capacity were ignored. More embarrassing still, some of the lucky recipients of the government's largesse appear to have invested more heavily in acquiring off-shore status and other exotic tax arrangements  through which to funnel their cheques, than they have in the production of the kit.

Naturally Dr Nagpaul is entirely unrepentant. In his most recent outing before Parliament, he effectively accused the hapless Secretary of State of lying about the actual quantities of PPE that the government has procured, although he seemed strangely unable to give the "correct" figure. Indeed he has moved on to far weightier issues: now his beef is that the government has ignored the religious sensibilities of medical practitioners who have to wear beards as a signifier of their faith, but who cannot get their face fluff within the standard mask.  Meanwhile, he argues for tougher protective measures since, in his opinion, the public doesn't "understand" social distancing because citizens cannot accurately distinguish one from two metres.

It is not entirely clear how this eminent lobbyist thinks he is improving public confidence in the UK's healthcare arrangements. Certainly, he has been quite amazingly successful in adding to the narrative that all deficiencies are entirely the fault of the government rather than that they augment the shortcomings of those fellow professionals whom he so assiduously represents. Indeed one of his colleagues (Niall Dickson, head of the NHS Confederation) admitted to the baffling inability of the 1.4m strong NHS to distribute that PPE which was procured - apparently, we would have been better off "with a sort of Amazon style service". 

Sadly, whenever HMG does get a belated opportunity to get onto the front foot, it drops something heavy upon it. Some of its initiatives seem both risible and contradictory. What, for example are citizens to make of the £10 voucher schemes that encourages us to stuff our faces away from home during August and the £50 subsidy to get us to repair our bikes and get cycling in the new "war against obesity"? Much more seriously, the attempt to get back to normality as the pandemic demonstrably subsides has been up-ended by the new policy of mandatory face masking and by the capricious re- imposition of  quarantine restrictions so soon after they were rescinded. It is simply neither fair nor credible for Nichola Sturgeon to admit that while a fortnight ago people were not discouraged from going abroad, she herself would never have made such an arrangement. Now she says it would be far better for us all to stay at home and drive nose-to-tail up the A9 to the Highlands while observing "appropriate" social distancing.

Apparently, all this risk aversion is to do with the likelihood of the so-called "second wave" of Covid 19, which has been eagerly anticipated since the UK began to emerge from lockdown in early July. It would be fair to say that a lot of scientific reputations are on the line if such a phenomenon does not recur. Even as the observable and verifiable evidence accumulates, public policy is still dominated by the model dependent "realism" propounded by the likes of Professor Ferguson and which has been so thoroughly discredited as the pandemic has subsided, both here in the UK and in lockdown "refuseniks" like Sweden. Yet the two "Gentlemen of Corona", Dr Whitty and Sir Patrick Vallance have continued to emphasise "worst case" scenarios upon which the government is acting as if they were its own base case. 

In this context the private sector, upon whose contributions all this public sector complexity, ineptitude and scaremongering depends, is in absolutely dire straits. It is clear  that the good intentions of the original government schemes to support both employment and corporate solvency have been vitiated by red-tape and patent instances of unfairness simply because previously earning citizens did not show up on officials' spread-sheets. In the latest SNAFU, the emergency grants scheme operated by local councils is to be terminated, even before the intended recipients of this support have received a penny. The reason for this delay? The government's valuation agency is still trying to determine the "status" of those many small businesses that pay their business rates by way of an intermediary such as a landlord, and which have only recently been recognised by the Business Department.

Larger companies have fared little better: as with their smaller brethren, double digit falls in revenues have been multiplied by operational gearing into hugely diminished profits and frequent losses, notwithstanding recent results have shown corporate ingenuity and ruthlessness in riding out the storm. Investment and inventories have been cut back and cash squeezed from whatever level of activity that has been achieved. It is noticeable too that many companies have decided to repay those loans provided by the government, perhaps fearful of ministerial interference where they are deemed to have received "public support". Yet now jobs are being shed in earnest, despite furlough measures.

But the biggest flashing light of all is surely the banking sector. Recent results have shown the shocking levels of carnage in their loan books, which their other activities such as investment banking and securities trading have barely mitigated. Yet the regulator behaves as if the banks should just sit there and take it, as a further form of existential punishment for their previous misdeeds in the Great Financial Crisis of 2008/09. Now even the current Chairman of the recently re-named NatWest Bank says that the sector is un-investible. The implications of this are startling. Certainly smarter investors who can see that the banks will neither be able nor be allowed to make an economic return in the current dispensation are arguing that they should be wound up and their distributable assets returned to shareholders. With many banks trading at multi-year discounts to their intrinsic book value, even the costs of an orderly run-off can easily be accommodated within current valuations of equity.

Meanwhile, the government continues to make a virtue of its caution, buoyed by opinion polls that show the public is still far from being educated about the difference between risk and uncertainty. Dare one say it, but the PM's and Ms Sturgeon's understanding of business and economics extends no further than a dim hope that the central banks around the world will continue to keep the monetary taps open and that companies will somehow manage, despite their best endeavours. Why all the rest of us should continue to bankroll this calamity by way of our jobs now or by way of higher taxes in future is far less clear.