• Lockdown. UK hospitals are facing their “worst crisis in living memory” (infographic Twitter thread here) and the situation will likely deteriorate further, as the effects of mixing over the Christmas break emerge. Politico reports government projections of a peak of 2,000 deaths per day. This points to an extended lockdown to begin 2021, with March 23 seen as the date “coronavirus restrictions might realistically begin to be eased” within Whitehall (Sunday Times).

    • Is low compliance to blame? Aside from the highly-transmissible new strain of the virus and the easing of restrictions in December, reduced public compliance is being blamed for this most recent wave of infections. While strict compliance is increasingly crucial, recent evidence suggests that adherence to and support of regulations remains high. Psychologists writing for the BMJ Opinion blog argue that “the narratives of blame… project the real frailties of government policy onto the imagined frailties of public psychology”.
    • ~~One exception is low adherence to self-isolation rules, e.g. following a positive test or contact with a Covid-positive person. But here, the authors argue this has “less to do with psychological motivation than with the availability of resources''.

    • Protecting household incomes. The Government has extended the evictions ban in a welcome move, but it is still due to cut Universal Credit by £1,040 per year in April. Back in October, the Resolution Foundation argued this would have an “unimaginable” impact on the living standards of the poorest households and on the wider economy - read their analysis here.
    • ~~Child Poverty Action Group analysis has revealed that over 1m households face “debt deductions” on their UC payments, leaving them with up to 30% less in benefits than their Government-assessed need.
    • ~~Gaps in coverage: Up to 3 million people are estimated to have fallen through the gaps in Government support schemes (Financial Times), with no new measures in the Chancellor’s recent announcements to address this (ExcludedUK).

    • Protecting businesses. The CBI welcomed the Chancellor’s “swift” response to the changing circumstances, but argued for an extension of the furlough scheme until at least the end of June. Delaying this decision could lead to unnecessary redundancies, as it did last autumn.
    • ~~Fragility. Recent surveys suggest a large number of businesses face collapse, including up to 250,000 small businesses (Financial Times) and 4,000 City firms (Guardian).
    • ~~Public equity stakes. IPPR has argued that cash support for businesses should be approximately 10x more generous to help firms handle the £180m drop in cash flow they face according to December Bank of England figures. They, along with think tank Common Wealth, argue this support should take the form of an equity stake, as is normal in Germany. (Explainer thread on Twitter.)
    • ~~Tighter lockdown? The New Statesman’s Stephen Bush has argued that the continued spread of the virus is explained not by lack of compliance, but by the range of legally allowed economic activity. This could be targeted by tighter lockdown measures, necessitating further support measures.

    Weekly Updates

    Climate change

    • Getting to zero. Think tank Onward has launched a cross-party programme of research on the political and practical challenges of achieving net zero.
    • ~~Jobs. The initial report found that 10 million jobs will need to be retrained or replaced as part of the net zero transition, with the UK's least prosperous regions - including "Red Wall" constituencies - facing the most potential disruption. (Coverage from Edie here.)

    • Building a resilient economy. NEF, the Zoe Institute and WEAll released a comprehensive analysis of the options for systemic economic change after the pandemic.
    • ~~The authors propose eight mutually-supportive areas of reform: a wellbeing budget, modernised fiscal rules, a UK investment authority, green credit guidance, a land value tax, an environmental border tax, mandatory financial risk assessments and resource caps.


    • "We are not all in this together." The IFS Deaton Review's New Year Message summarises how inequalities widened in 2020 and outlined the action needed in 2021 to address this, while the Resolution Foundation outlines the "lessons from lockdown" that need to be heeded for this most recent wave of infections.

    • Health inequality. The Covid-19 Marmot Review examined health inequalities and their intersection with socioeconomic inequalities in the context of the pandemic.

    • International inequality. Jeremy Cliffe wrote for the New Statesman arguing that unequal vaccine distribution and stimulus support is creating a "walled garden" for the rich world.
    • ~~In depth analysis. We covered this and other political economic issues surrounding vaccination in our previous Digest.


    • The consequences of trickle-down economics.Analysis published by the LSE of 18 OECD countries over the last 50 years suggests that tax cuts on the rich have not had a significant impact on unemployment or growth, while they have increased income inequality.

    • Which taxes might the Chancellor raise? The Times found that environmental taxes, wealth taxes and a “pandemic solidarity levy” were the areas economists most expected tax rises in their December survey.

    • Property taxes. 29 Conservatives launched a new research group last month to “reform outdated property taxes”. Bright Blue’s Sam Robinson outlines the case for reform of stamp duty, “regressive” council tax and land taxation here.


    • How does the deal look? In their first analysis of the UK-EU deal, IPPR argues that it leaves “workers’ rights and environmental protections at serious risk of erosion" and has important implications for state aid policy.

    • Greening trade. ICYMI, last month Common Wealth published a report outlining how the UK could take advantage of its trade independence post-Brexit and outlined the contours of a “Green New Deal” approach to trade policy.

    Local economies

    • “Policies of Belonging”. Centre-right think tank Onward released a report today arguing that “Government’s flagship levelling up ambition will fail unless Ministers take concerted action to invest in and empower fraying communities after the pandemic”, and outlines proposals for empowering these communities, backed by a cross-party coalition of MPs and civic organisations.

    • The future of towns. Public attitudes research by think tank Demos has found that people in English towns are “split down the middle on the future of their town”, but outlines how local government leaders can bridge this divide and chart a path forward through community engagement.

    • Plural ownership models. CLES’s Isaac Stanley outlines the role employee-owned companies, cooperatives and other business models can play in Community Wealth Building.