Good morning from New Economy Brief.
As the Covid-19 Inquiry dominates the headlines, the TUC conducts its own investigation into the UK’s Covid response and preparedness. But rather than dodgy WhatsApps, this new report explores how austerity left the country “hugely unprepared” for the pandemic across four key pillars:
We take a look at each of these pillars and how greater economic resilience could mitigate future crises.
Safe staffing levels in public services. The report finds that “multiple years of pay caps and pay freezes” left both health and social care “dangerously understaffed” during the pandemic due to low recruitment and increased staff turnover. Between 2010 and 2020, the number of nurses per capita in the UK grew by less than one per cent compared to the OECD average of 10 per cent. The report states that in the months before the pandemic, the average NHS worker was earning £3,000 less in real terms than in 2010 and that in social care, the turnover rate for staff in England increased from 22 per cent in 2012/13 to 31.8 per cent in 2019/20.
Public service capacity and resources. In 2020, spending per capita on transport, housing, childcare, schools, higher education, police, fire services and environmental protection was lower than in 2010. The TUC argues that these limited public services had a negative impact on “civil contingencies” and children’s education during the pandemic.
A strong safety net through the social security system. Benefit cuts largely made between 2010 and 2016 damaged the social security safety net and caused increases in poverty levels, argues the TUC. It highlights that “living in poverty was associated with greater risks of exposure to Covid-19, and greater levels of vulnerability to more serious health consequences from being ill with Covid”.
Robust health and safety protections at work. Health and safety took on a new meaning during the pandemic amid the presence of such a contagious and in some cases deadly disease. But according to the TUC, “the enforcement of rules to keep workers safe at work was compromised by cuts that decimated public health and workplace safety regulator” which particularly affected those who couldn’t work from home. Staffing numbers at the Health and Safety Executive, for example, have been cut by 35% since 2010, and the number of workplaces investigated by a safety inspector fell by 70% from 2010 to 2020. To avoid such issues in the future, the TUC proposes “long-term, adequate funding of health and safety regulators”, “a realignment of health and safety regulation is needed to ensure independence” and better “regulatory clarity”, ensuring “greater level of awareness among employers, the public and stakeholders.”
Austerity on trial. The wider significance of highlighting the relationship between austerity policies and Covid is twofold. First, the Covid response highlighted cracks in state capacity that normally go under-analysed, whether that is lab capacity, sick pay levels, or number of health and safety inspectors. These areas were often the target of cuts precisely because they got little attention and therefore less public backlash. This inquiry is an important opportunity to shine a light on these decisions, and provides an important example of the link between public spending, state capacity, and economic resilience. Perhaps the more important reason is more forward-looking. State capacity in the UK is likely to be stretched in similar ways again in the near future, whether by other pandemics, by the effects of climate breakdown, or other unforeseen events. At the same time, the government has pencilled in yet another round of public spending squeezes in the middle of the decade in order to comply with their fiscal rules. With UK public spending levels back at the centre of national debate, this inquiry’s verdict could have a significant impact on wider attitudes towards public spending.
“Bidenomics on steroids”? The FT has a long read on Labour’s emerging economic policy, which is “more radical” than you might think according to GMB general secretary Gary Smith. However the tension between the party’s ambitions and its fiscal rules runs through the piece.
Public Priorities. Meanwhile, the public think that reducing government debt is the least important of the Prime Minister’s five pledges, according to new polling from Ipsos UK. Fixing the NHS and addressing the cost of living, unsurprisingly, continue to be top of the wish list for the public.
UBI Pilot. A new plan for a locally-led pilot of a universal basic income in England has been published by think tank Autonomy. Under the plan, two small-scale trials would be attempted in East Finchley and Jarrow, with participants each receiving around £1600 per month.
Age of inequality. The gap between the super rich and the rest has become a chasm in recent decades, according to new analysis of the history of the Sunday Times Rich List since 1989 from Ben Tippet and Rafael Wildauer at the University of Greenwich. The research finds that the richest 50 families in the UK now possess the same wealth as the combined poorest 50% of the population.