The Omicron Variant | NEB Digest

New variant. The World Health Organisation (WHO) has classified the new Omicron Covid-19 variant as a ‘variant of concern’ due in part to its ‘unprecedented’ number of spike mutations, which gives it the potential to escape protection against immunity induced by vaccines and previous infections.

South Africa and travel bans. South Africa has invested heavily in genomic sequencing, which is why scientists in the country were able to spot the new Omicron variant so swiftly. This also means that it should be easier to create updated vaccines if needed. However, the reaction of many countries (including the UK) has been to introduce travel bans from South Africa and neighbouring countries. South African President Cyril Ramaphosa criticised this, saying it would impose heavy costs on the country and would discourage those who find such mutations from sharing their findings with the rest of the world.

Global vaccination. Gordon Brown has renewed his criticism of rich countries for hoarding vaccine supplies when vaccination rates in the global South remain low. “The failure to put vaccines into the arms of people in the developing world is now coming back to haunt us.” With enough vaccines (2 billion a month) now being manufactured to vaccinate the whole world, the problem is one of distribution. In June, the G7 countries promised to donate their surplus vaccines to the global South. Brown set out “the arithmetic of failure”: the US has so far delivered only 25% of the vaccines it promised, the European Union 19%, the UK just 11%. The UK threw away 600,000 vaccines in the summer which had passed their expiry date.

Vaccination rates. In the lowest income countries, double-vaccination rates are as low as 3%. The New York Times publishes an updated vaccination tracker.
Pandemic treaty. The WHO is meeting this week to discuss the proposals for a ‘pandemic treaty’ to ensure stronger coordination of national responses and greater and more urgent support to countries in need. Despite previously pushing back on calls for such a treaty to be legally binding, the US and several other countries seem to have entered the new discussions with a more open mind. ‍
Intellectual property. The new variant has prompted renewed calls to waive intellectual property (IP) protections on Covid-19 vaccines, to enable them to be cheaply mass produced throughout the world. With the World Trade Organisation meeting next week, President Biden has renewed his call for vaccine IP protections to be waived. Global Justice Now has published a useful policy brief on the issue.

Vaccine sell-off. The UK’s Advanced Vaccines Manufacturing and Innovation Centre has been instrumental in ramping up vaccine production. Last month science minister George Freeman MP boasted about the £215 million investment in it provided by the UK Government. This week - just as details of the new variant were emerging - the Financial Times revealed that the Government is now going to sell it to the private sector. The decision attracted much criticism on Twitter.

The new normal? With vaccines not yet widely available globally and as new variants continue to develop, the Progressive Economy Forum’s James Meadway explored how the economy may adapt to a more permanent presence of Covid-19. Capitalism’s command of labour is changing, as pandemic diseases and public health measures change the location and patterns of work. On the other side of the political spectrum, Kate Andrews in the Spectator agreed.

Short-time working. The TUC argues that the Government should introduce a permanent short-time work scheme for future periods of economic turbulence, drawing on the success of the Coronavirus Job Retention Scheme. 23 countries in the OECD had similar schemes in place before the pandemic.

Sick pay and income support. With cases of the new variant set to grow in number over the coming weeks, questions have already been raised over whether those who cannot work due to self-isolation will be properly supported.

Living sick pay? Pandemic restrictions over the last two years have drawn attention to the issue of statutory sick pay (SSP) reform. The Fabian Society suggested several potential reforms earlier this year. The TUC, which commissioned the research, call for SSP to match the Real Living Wage.
Equalities. Calls for sick pay to match the Real Living Wage were also backed by a report on the impacts of Covid-19 on paid and unpaid work, by the Women’s Budget Group, the University of Nottingham and the University of Warwick. The report found that the largest economic burden of the pandemic has been experienced by working class women.

Weekly Updates

Migration

Channel crossing tragedy. The tragic loss of life last week in the English Channel has focused attention on the government’s border and asylum policies and the reasons why people are fleeing their homelands in search of safety. On BBC News Bella Sankey from Detention Action argued that the tragedy was “completely foreseeable and completely avoidable.” Oxford economist Simon Wren Lewis argued that the deaths are the direct result of Government policy, which has abolished legal routes to claim asylum in the UK. Former diplomat Lord Kerr criticised government policy in the House of Lords: “the facts do not support the case for cruelty".

Policy briefing. The Joint Council on the Welfare of Immigrants has produced a briefing explaining the steps MPs can take to prevent more people dying while attempting to get to the UK. ‍
How many refugees does the UK take in? The House of Commons Library has published data on UK asylum applications. In 2020, there were around 6 asylum applications for every 10,000 people living in the UK, compared with 11 across the EU. Polly Toynbee in the Guardian sets out the wider picture.

Climate change and environment

Biden’s Net Zero shake up. Presiden Biden has announced a new White House office aimed at coordinating federal climate policy. With so much climate policy cutting across traditional departments, Boris Johnson should consider doing the same, argues the European Climate Foundation’s Joss Garman.

Investing in net zero. Global investment in clean energy infrastructure is far below the levels needed to secure a sustainable future and meet Net Zero targets, according to the International Energy Agency.
Italian green homes upgrades. One government which is investing in green infrastructure is Italy, where the government is meeting 110% of the cost of green home upgrades such as insulation.

Green finance? The Bank of England has started using ‘green’ criteria when buying corporate bonds. However Positive Money reveals that big oil and gas polluters are still eligible for the scheme.

European banks and climate risk. Meanwhile a new European Central Bank study finds that the majority of European banks are not prepared for climate risks. In a Twitter thread energy commentator Assaad Razzouk warns of the dangers.

Fossil fuel subsidies. COP26 called for the phasing out of fossil fuel subsidies. But a new report by Common Wealth and NEF finds that the UK is still offering tax reliefs to fossil fuel companies totalling billions of pounds per year.

Bulb bail out. The UK government has bailed out energy supplier Bulb to the tune of £1.7bn as the energy cost crisis continues. This leaves little remaining competition to the ‘Big 6’ suppliers. Commentator Christine Berry argues that this exposes the flaws in the energy supply market.

Natural capital inquiry. The House of Commons Environmental Audit Committee has launched a new inquiry looking at broadening definitions of economic prosperity to take greater account of natural capital and sustainability.

Tax and Fiscal Policy

Levelling Up White Paper. The Daily Telegraph’s Ben Riley-Smith claims that the forthcoming ‘Levelling Up’ White Paper will not be supported with any new money from the Treasury. He reports that Chancellor Rishi Sunak continues to frustrate his Cabinet colleagues with his refusal to spend.

New Tory tax group. Meanwhile backbench rebellion coordinator Steve Baker MP has fired the starting pistol on Conservative infighting over taxation and possible pre-election tax cuts, signalling his intention to form a new parliamentary group on the issue.
Brexit and tax cuts. Brexit Minister Lord Frost argues that cutting taxes is the only way to make a success of leaving the EU.

Global tax avoidance. Governments around the world missed out on nearly $500bn in tax revenue in 2021 as a result of tax avoidance by corporations and rich individuals according to the 2021 ‘State of Tax Justice’ report from the Tax Justice Network and allies.

Make Amazon Pay. This comes as ‘Black Friday’ saw global protests against Amazon as part of the ‘Make Amazon Pay’ campaign.

Make Brexit work. A new Commission has been formed on how to ‘make Brexit work’. It includes business figures, trade unionists, academics and former Financial Times editor Lionel Barber.

German coalition government. Analysing the new German coalition agreement, the Delors Institute’s Lucas Guttenberg says its more flexible approach to fiscal policy could signal ‘good news for the Eurozone’, making the Stability and Growth Pact more expansionary.

Work and welfare

UBI for Wales? A new report produced by Autonomy for the Welsh Future Generations Commissioner has found that an introductory basic income scheme in Wales would cost around £6bn and reduce poverty levels by 50%.

4 day week trial. Atom Bank has become the largest UK employer to adopt a 4 day week without cutting pay, although they have only actually reduced working time by 3.5 hours per week.

Economic inactivity. The impact of Covid on the labour market can be seen more in declining participation and inactivity than in unemployment, according to new research from the Resolution Foundation.

Wellbeing issues. Half of small businesses and 73% of bigger firms had staff ‘wellbeing issues’ in the last year, according to Lloyds Bank research.

Minimum wage rise in Germany. Germany’s new coalition government has confirmed that it intends to raise the minimum wage by nearly 25%, to 12 euros per hour.

Paradigm shift

Public perception of the economy. New polling from Ipsos Mori has found that nearly 60% of people in the UK think the economy is performing poorly. When the same survey was last conducted in 2013, in the midst of austerity, the figure was 84%.

Deficit levels no longer of most concern. ‘The level of the deficit’ is now 8th in the list of important economic indicators for the public. Inflation and unemployment are now the issues of most concern.
Austerity around the world. A new academic paper by Alexander Kentikelenis and Thomas Stubbs suggests that 83 countries around the world are facing new waves of austerity in the coming years, many as a result of IMF lending programmes.

Fairness Foundation. A new UK non-profit organisation, the Fairness Foundation, has been launched. Founded by former Richer Sounds boss Julian Richer, it is committed to making the argument for an economy underpinned by core principles of fairness which unite the public.

Wellbeing economy. Green MP Caroline Lucas has secured a parliamentary debate on the idea of a ‘Wellbeing Economy’ following a successful petition on the subject. The House of Commons Library has produced a useful briefing for the debate.

Resources. The Wellbeing Economy Alliance, a global network advocating for a wellbeing economy, produces a wide range of resources and advocacy materials. The Club of Rome has produced a major report calling for “wellbeing economics as the road to recovery, renewal and resilience.”