Tiers for Fears

 The Government is scared, why now and not a week ago I don't really get. The only way to make sense of it is that the scientific advice the Government has been getting is of poor quality. The way the Government has destroyed itself to follow advice, does not look like politics leading to me. Far from it, the Government is being led by the nose by the scientific advice and is being ruined by it. 

Meanwhile, with a wrecked Christmas anyway it is right to ask why this was not planned for. It would have been a much better call to stop travel and close shops a week or two ago in the face of rising cases. 

Moreover, the suddenness of the move has spooked other Countries, now isolating themselves from the UK. At least we won't notice a no-deal Brexit now!

What a mess and what a disastrous set of guidance from SAGE in my view. Now they are advising total lockdown in the South East for a couple of months, London was in Tier 2 last week. When this mess is over, and it will be with the good news that 500,000 people already have been vaccinated, the whole approach needs to be looked at. 

As much as Keir Starmer witters on about what he would have done several weeks ago with the benefit of today's knowledge, I think any Government would have been side-swiped by the weakness of the officialdom in the Government Scientific advisory space. A good way to tell this is that a big song and dance was made about getting rid of Dominic Cummings and pals, but we are in more of a mess now than ever on the communication side with the new people just as flummoxed as the past ones!

An alternative to lockdown strategy for 2021

The current lockdown strategy in the UK is not working and leaves me enervated. The virus has become more widespread than before it started a month ago, lots of places that were Tier 1 before lockdown are now in tier 2 or 3. 

There is no acknowledgement of this in Government, becuase there is no acknowledgement of this from their scientific advisers. The advisers are obsessed with their forecasting, which has been both broadly right and specifically wrong for the entirety of pandemic. I am tempted to almost to say I have had enough of experts...

Worse, there is not real calculation of the real hrm being done by cancelling other types of care and impoverishing millions through killing jobs. Any work done on this has been buried deep under Whitehall. 

In general, I am supporitive of the Government, the crisis awful to deal with and has hit a cold Europe very hard, even Germany is more or less at the same levels as the UK now - Italy, Spain and France too, if not relatively worse. There are no easy answers. 

However, for me it is time to try something new in the new year. Free everyone, restore liberty to travel and work to most. But, make the wearing of masks and even gloves more or less compulsory. no bleating about asthama or some other excuse. Just behave in public, full social distancing too of course. Shops caught not enforcing can be find as can any other service, public or private. 

Yes, the draconian enforcement is still a breach of habeas corpus, but there is a virus to defeat for antoehr six months. The up side is a recovering economy, the only places to keep closed in bad areas are pubs and nightclubs - no compliance from drunk people is to be expected. The rest of life can continue in a freer way. 

The Wales Syndrome

Much merriment can be drawn from the situation in Wales this past, amongst the darkness that stalks our lands otherwise. 

I have throughout the last few months grown tired with two aspects of "Covid Control" that are at once contradictory. On the one hand, I get bored with the media (and also immediate family and acquaintances) finding every tiny loophole to exploit in any suggestions from the Government about restrictions to our lives to help prevent the spread of the Virus - it is just a series of sad little gotchas. We do know the Government is trying to restrict the virus spread and not just wind up directly Mrs Lilliput from no.23 who wants her hair done on a Tuesday. I find these conversations a tragic waste of time.

On the other hand, the ridiculousness of the micro-management by the Government and the pseudo-Governments of the regions also frustrates me. The latest idiocy in Wales over the sale of non-essential items is the most hilarious example yet. Since when in the the UK anywhere has a Government decided what items in a shop you can or can't buy on any given day? This is like something out of a Solzenhyitsen dystopia. But it is also very funny, to see a Labour Government, do exactly what we all  would predict and get even more micro-managing than the Tories - all for your own good of course. 

Overall, the Government's have lost the communications battle as they listen too much to the scientists. The current message "hands, face, space" is pretty good - it makes the case for simple social distancing. Throw that in with curtailing some activities where the virus is spreading fast and we have a policy easily understood and abided by. It is the extra craziness of specific venues being open or not, or groups of people gathering or not, that ruins this message. Governments cannot seem to help themselves gorge on the minutia of interference. But better that they focus on bigger things like reading NHS beds and testing and leave out the insane micro-management. 

Dissolution of the Monasteries, 2020-style

What is going to happen when the wave of local authority bankruptcies hits? 

... as, in the coming months, must surely be highly likely.  We've raised this before, and I remain extremely interested in it.   As well as serious general political interest there's a local angle for me: after 6 years of Labour excesses, mismanagement and all-round failure, my borough (Croydon) is well up there with the most indebted, over-extended councils in the land.  Others said to be near the brink are Luton, Oxford, Birmingham (!), Woking and Peterborough: and that's by no means the end of the watch-list.

There are a couple of clues as to what happens next.  This month the government imposed a new Chief Executive  - a turnaround specialist - on Croydon as the price for being willing to continue in dialogue with the Labour leadership.  There must, though, surely be a very finite pool of genuinely competent *turnaround* merchants available at short notice.  (I'd offer myself but I don't think t'unions would relish my management style ...)

The other massive clue is what happened in Northants, where the fateful day of the Section 114 Notice has come and gone.  As well as the government dividing up the old responsibilities into newly-minted authorities with revised boundaries (which sounds like doing something radical just to make the point), rather than bailing them out the government gave them approval to sell capital assets until they'd filled the hole in the ordinary accounts.  Generally speaking, a council's ability to do that is very heavily circumscribed, for obvious reasons.

So here's the vision.  Council after council goes bust.  If they couldn't contemplate rescuing Northants (Tory-held) in 2018, there's no way on earth the government is going to bail them all out: so massive, nationwide asset sales are mandated.  There's been nothing like this since the Dissolution of the Monasteries, supervised by that outright genius of an administrator, Thomas Cromwell.  And before that, the shakeout of labour relations following the Black Death.

This might actually be a major component in the dynamics of a post-Brexit, ongoing-Covid UK.  Sadly, there's no obvious likelihood of a latter-day Cromwell to execute the same highly diligent job he made of the 16th Century version.  (Cummings?  Don't make us laugh.)  Mostly, Cromwell ensured Henry got top dollar for the assets seized.  Even under his distinctly hands-on guidance, however, there was plenty of dubious cronyism involved.  We may be sure all manner of *bargains* will fall into undeserving hands at ridiculous prices - less Henry VIII, more Boris Yeltsin, I'm guessing.  Which will be depressing.

If anyone truly relishes the idea of all the pieces being thrown up into the air ... I know what you mean, but be careful what you wish for.  If Brum goes under, that'll be quite a crash.

ND

Weekend: American Lament - Darwin Awaits ...

If we don't much bang on about the USA so much on this blog, it's not for lack of regard; far from it.  Personally, I have worked for more than one US company and, whilst never resident, I have done a huge amount of business in the States (indeed, made most of my money there).  It's such a big country with so many traditions, and generalisation is often foolish: but in commercial terms most Americans are a delight to do business with: open-minded, and always ready to deal if you show there's something in it for them, without being overly concerned about what's in it for you.  They put most Europeans to shame.  (I exempt the London financial sector which happily shares this same characteristic.)

No: if we don't bang on about the USA so much, it's more out of a sense of not wishing to intrude upon the private grief of friends.  Because they have fallen into the hands of utter lunatics.

1.  There has always been a bonkers strand on the US fundamentalist Right.  I have worked with good professional geologists who claim to believe the Lord made the world in literally seven days some 4,000 years ago - and yet their entire technical discipline is based on, errr, a rather different account  - one that they must also maintain in their heads Monday to Saturday, so to speak.  But in the past it's not generally been too hard to leave them to their Sunday eccentricities**.

2.  The American sense of libertarianism is also somewhat hard to rationalise.  Yes, there are indeed some out-and-out cave dwellers maintaining a genuinely self-sufficient lifestyle in their Montana fastnesses.  (Well, they probably don't manufacture their own automatic firearms ...)  But for so many others, their professed enthusiam for individualism and personal liberty somehow doesn't apply during working hours, because the average American corporate is a tightly-run dictatorship. (Benign? -ish.)  Employee involvement most definitely not wanted: but blind, unquestioning loyalty most categorically required (and forthcoming).

3.  Finally there's the aggressive-woke-snowflake tendency in their universities (and increasingly their corporate HR departments), but we'll let that abomination pass just for now, because ...

It's the fundamentalist/libertarians that are my immediate worry, them and their commander-in-chief.  Their attitude to Covid-19 is likely to see Darwin swinging into action in a big way: a whole year of Darwin awards being issued.  And although we could just about make a pro forma evolutionary argument for how American society is going to emerge all the stronger for a good clean-out of the weak, somehow it doesn't ring very true.  "What doesn't kill me, makes me stronger!"  Yeah, maybe.  But you might want to check on the physical and mental condition of some Covid "survivors".

There are of course those on the Left who'd say Boris Johnson's Britain bears more than a passing resemblance to Trump's America.  It's not a wholly empty comparison.  But it's not a quarter as much perturbing (not to me, anyway, even if it's clear Boris has made a very bad fist of being king-of-the-world).  

Yes, the USA has colossal strength in depth, as the Japanese learned to their surprise and detriment.  And mighty empires don't crumble overnight.  But what Americans face today, on several fronts (Covid, China, identity politics ...), and the shape in which they face it, is frightening.  There's a long LRB piece here that addresses primarily the China apsect of this, concluding:

The US is currently preoccupied by the legacy of racial hierarchy and the last half-century of widening inequality.  But as it attends to the challenge of domestic reconstruction, its political class faces another question.  Can it fashion a domestic political bargain to enable the US to become what it currently is not: a competent and co-operative partner in the management of the collective risks of the Anthropocene?  After the shock of Covid-19 it is more urgent than ever.  

Sorry, my Trans-Atlantic friends, but under any probable political leadership over the next four years, I don't quite see how you come out of this, except materially diminished - relative to China at the very least.  Which is depressing indeed.

ND

____________________
** I realise of course that many would attribute much worse things to some fundamentalists than just quirky ideas on evolution etc  

Relief in Retail

At the beginning of the Covid crisis you may remember I wrote a few times on the need to switch away from upwards-only rents to a more nuanced approach for retail based on turnover. Fair to say I did not get universal support for this and a few people pointed out that some shopping centres had tried this already.

However, I am still pleased to see the Crown Estate is to pursue this strategy in Regent Street (where I work, so will be able to give regular updates as to how it is working out) - see here.

This approach shoudl work for the low income restaurants and shops that are not going to bounce back for a few months yet to anything like pre-Covid normal.

It will be interesting to see if this strategy works, or whether business is just too bad to continue for many of the independent retailers.

Weekend: More Authoritative Covid Stuff

A couple of months I posted some knowledgeable Covid material from an Oxford prof I'd heard speak.  It's had the most hits of anything on C@W over the past three months.

Here's the perspective from another Oxford prof - this time more conveniently available on www.  It's only 18 minutes, and entirely accessible.   The speaker is Naj Rahman, Professor of Respiratory Medicine and Director of the Oxford Respiratory Trials Unit, who is absolutely in the front line on several key aspects (Oxford being way out front in real-time research & response on Covid, and Rahman being a practitioner as well as a researcher).

His talk is at once sobering, encouraging, and in its account of the noble efforts of some medical students, uplifting.  BTW, I'm not sure he agrees with the previous prof that Covid-19 might be the last coronavirus pandemic we face.

So - only 18 mins and well worth a viewing.

ND   

Some Authoritative Covid Stuff

Well there's been a lot of tripe and premature stuff to contend with, n'est-ce pas?  Today I attended a (virtual) lecture by this fine chap and (to the extent I've understood them aright), here are some of the things he had to say.

• For a very long time, progress on anti-viral medecine lagged many miles behind anti-bacterial.  Then HIV came along,followed by some serious effort, the resuts of which are impressive.  HIV has broadly been tamed, and one of the hepatitis family (I forget which) can be cured easily now.  They've really got the bit between the teeth, and he's confident something will soon be available by way of treatment for the various types of corona virus: there are several promising angles of attack
• When it is, it will be generic, able to be stockpiled, and probably good against any of the corona family.  He even went so far as to say:  this could be the last coronavirus pandemic ever.  (Brave man ... but I only report what I heard)
• One of the problems researchers face is ... shortage of experimental human subjects!  Last month you could step into any European or US hospital and have as many as you needed.  Now, the number of new cases coming forward is very small (!)   They think they may need to ... (wait for it) ask for volunteers to be infected.  Some would die
• The UK testing regime is now excellent (you hear that, Starmer?) - the expertly delivered tests, that is: home testing is not much use
• The idea of of a 'passive' herd immunity strategy was utterly bonkers.  In no part of Europe has more than 4% of the population had the virus, and you need >>20%.  Any health service would be overwhelmed along the way, long before that % could be reached
• It's entirely possible, indeed likely, there could have been corona virus outbreaks in Victorian times (this stuff has been around in animals for yonks).  It's just that nobody would have noticed it, in amongst all the other illness and death in crowded areas.  He suggested the Tudor-era sleeping sickness (made famous by Mantel) might have been a corona virus.  Like the 1918-19 'flu, these things can just burn themselves out

Finally, another fine speaker at the same event (to whom I will return in another post) said that it's wrong to claim (as some do these days) that the current generation of youngsters is the first that will have a lower life expectancy than their parents.  They'll live longer, she said, because medics and pharma will continue keeping horribly unwell oldies alive for ever increasing amounts of time.  They'll just have an unhappier time of it than their elders - unless they sort out their lifestyles (= over-eating).

ND

Landlords should move on lease terms

One of the key areas coming out of the current Covid crisis is the frankly terminal shock to the retail and leisure sectors. There simply has been nothing like this in history to compare it to in the modern age.

Restaurants and shops will fill up again, people are desperate for some normality as mile long queues to McDonalds' as they open up is demonstrating. However, it could be months or even years until social distancing restrictions, both regulated and emotional, are relaxed. Restaurants can't make money at 50% occupancy snd neither can many shops.

Equally, retail landlords are in a big fix, June rent roll is coming up and it could be a bloodbath. As the next quarter kicks in a lot of retailers will give up the pretence of trying to come back. Better to emerge with a fresh business and new rent rates than try and limp on with the accrued debt.

But the US and Europe have an answer, the answer is that lease terms move to share of turnover rather than fixed, upwards only, rents. Share of turnover, or even share of net income, will see businesses able to operate at reduced levels, but still pay some rent. Plus when the good times return, so do the rents to the landlords.

Crisis is a time for flexibility, the UK has long be afflicted by the deformities of the rent and business rates system which has ruined our high streets and many of our once thriving retail industry. With the additional burden of Amazon and now Covid the situation is dire, but the proposal above will show a way out that shares the costs appropriately between landlord and tenant.

Guest Post: At The Blunt End

From our longtime BTL champion, Electro-Kevin

Well here we are, regulars at the Capitalists (not) @ Work Arms and how honoured I am to spend a moment serving behind the bar rather than arguing with customers in front of it.  (If I've offended anyone I didn't meant it.)

We may be a nation all in this together but I disagree that we are a nation united, as The Sun trumpets this morning.  We are not.  We are one that is deeply divided.  This disease has opened up every fissure in this land and by golly, aren't there a lot of them!  Continuity Remain vs Brexit for one, managers struggling to start up businesses vs no-win-no-fee lawyers (aka 'elf 'n' safety); then there's devolution.  Oh my!  Whatever England may need right now, we are going to get what Scotland wants.  Boris could not make a bold decision even if he wanted to because Nicola Sturgeon simply says in advance of his addresses "This is what Scotland's doing [financed by, errr, the Treasury] and we don't want to come out of lockdown".  So England can't come out of lockdown because if we do the death rates will undoubtedly climb and will contrast badly with Scotland's which the BBC will point out with glee.

We are in a game of duck-and-cover, soon to turn into Whack-a-Mole because we simply have to start thinking about making a living once more.  I feel it in the air that we are about to see the return of soup kitchens and there is no assurance that there will be a vaccine any time soon to stop that.  I'm pretty sure it won't all be over by Christmas so the only thing that can prevent us from tipping into the economic abyss are very hard decisions of which our comfortably furloughed and suntanned people (particularly on state wages) are unready to stomach.

I really don't envy anyone in a position of authority in our divided country these days. There are no easy decisions.  The situation is awful from every angle, especially politically.  This the most exquisitely wicked disease to screw up the West.  The Goldilocks disease.  Not too strong, not too weak, not too impossible to cure... juuuust right.  Tepid enough to royally bugger us up.  And on that note I'm afraid to report that owing to social distancing, C@W Arms can no longer serve you the All-Day-Breakfast.  We can, however, chuck some tepid porridge at you with a ladle - the bad news is that it tastes foul, the good news is that there's plenty of it.

Tuck in!

E-K

Covid: Energy Sector Update

All manner of interesting things are happening as the lockdown and general paralysis works through the energy system.  Top of the list is, of course, severely reduced demand: residential up, but everything else significantly down.  Plus, customers' ability (and/or willingness) to pay is diminished.

Here are summaries of several current stories from the industry.     

 *   *   *   *   *  

Ofgem is in negotiations to pay more than £50m to EDF to reduce output from Britain's largest nuclear reactor (SZB) to avoid blackouts this summer.  Low demand threatens to overwhelm the network with surplus electricity, notably from nukes and windfarms that "must run".  National Grid warns of a "significant risk of disruption to security of supply" over the Bank Holiday unless it is granted emergency powers to disconnect excess solar and wind farms.  The costs of paying off all these plants will feed through to consumer energy bills - of course!

Ofgem (again) warns of a potential shock to consumers after research revealed only 35% have thought about the impact of coronavirus on their energy bills.  23% feel their finances are negatively impacted and 44% expect their financial situation to deteriorate in the next six months. 56% say they are using more energy than normal for the time of year, rising to 75% among families with children. Despite this, only 35% have given consideration to the roll-on impact to their bills, prompting the regulator to warn of potential “bill shock” further down the line

UK power network balancing costs for Q1 2020 climbed 36% year-on-year, driven by rising constraint payments to natural gas and wind powered facilities, National Grid data show: £430m, up from £312m in Q1 2019

Wind and solar power have stepped into the baseload role in Europe, with very little coal-fired plant running and less gas-fired plant than usual, wind and solar output having priority on the grid

*   *   *   *   * 

What's interesting about this last snippet is that it offers something of glimpse of where we expected to be in, say, 2030 as ever more renewables are developed, and ever more energy efficiency measures are taken.  Some grid operators are now proving able to manage grids at 70% or more renewable energy and with a much lower level of demand.  This would have been hard to believe until, errr, it actually happened.  Well, those grid chappies are good engineers - and they have a lot of tools at their disposal, some of them rather blunt instruments (see above).  What we'll learn later is, ahem ... the cost!  Which we shall all pay, one way or the other.

Finally, as a rather detailed but potentially significant consequence of all this, the output of gas-fired power plants in the UK and elsewhere has absolutely cratered (down by 90% in UK in April).  It is gas-fired plant that has been the great bulwark and standby in our system for two decades now - the grid's go-to source of flexibility, taking the strain of most of the ups-and-downs caused by intermittent wind generation (coal isn't nearly as flexible, and nukes not at all).  I foresee some very awkward premature closures in this sector - or, as above, the need to throw some big money at them to keep them available.

All the greenies (and a lot of lefties) are hoping these unexpected developments point the way to the green future of their dreams.  Maybe.  But it won't be cheap.

Oil might be, though ... 

ND

Maybe a little private enterprise could help here?

Sorry for the absence this week, family illness and other things have taken up all spare time.

The non-stop Covid news is very trying for all of us. The era of 24 media is a distressing one, things are bad enough without the constant stream of inane takes (yes, I get the irony!) across all news outlets, many of whom have given up reporting for the cheaper option of just cut 'n paste Reuters and add some views.

A current issue being raised is the lack of testing for Covid in the UK. Clearly, we are well behind the curve on what we could have done to stop the spread. But us and most European countries.

We should have stopped international football and skiing trips etc. "If only" we will be saying for years to come after this.

However, on the current media spasm around PPE and testing I feel the NHS has a lot to answer for. There is no real shortage of PPE at the basic level, but distribution to the right places has been poor. Moreover,  I know of plenty of suppliers keen to help with equipment, but NHS procurement has long processes and rules - it only buys from those it knows already. Addtionally, it has an aversion to dealing with the private sector. By contrast, in Germany they are very far ahead procurement for testing and PPE but worked with Bayer a few weeks ago to produce an effective cheap test and manufacturing capability.

The NHS wanted to do it in house and to work with Universities and their laboratories. Perhaps they would have been better to speak to GSK or to contract it out to them - but if you have socialised medicine it means a socialised approach. I note the US, for all of its many mistakes, also has plenty of testing available....as does Korea, Singapore etc. The questions are being asked of the government, but as ever in the UK,  complete worship of the NHS (this is not to do down a sterling effort by it frontline currently has to include all its staff - when the admin side we know is very weak indeed) means that the buck cannot stop where the issue lies.

It is not too late to change course, I see the Government has been super keen on "Dyson" ventilators which has had the Left in fits of vapours about Brexit - in reality it is a sensible move in these dark days to put all hands to the pump, literally.

Let's hope the NHS and Government are learing some fast lessons about moving quickly becuase unfortunately the situation is going to get very bad now, very quickly for a time.