Balancing the risks

As the peak of the coronavirus outbreak approaches, it is easy to focus predominantly on the medical side of this crisis and lose sight of the economic devastation it is causing. The Government has put in place an insurance policy amounting to hundreds of billions of pounds in the hope that businesses will weather the storm.

But every day brings even more dire news that makes a lengthy lockdown increasingly difficult to sustain. The UK’S response, shutting down swathes of activity, is expected to reduce output by 15 per cent, a greater hit than during the financial crash of 2008. The oil price has fallen to under $25 a barrel as world industrial production has crashed into the coronavirus wall. Pension funds have been ravaged and, while losses may be made up in years to come for younger savers, those drawing incomes now are suffering a big impact. Easyjet has grounded its planes. The spectre of bankruptcy hangs over hundreds of firms.

A recession is inevitable. It is the job of the policy makers to avoid it becoming a depression. While following the science in dealing with a pandemic is important, it cannot be to the exclusion of all other considerations. The long-term impact on public health of a poorer country may well be greater than the human costs of the virus. The perverse consequences are already being seen. In Scotland, hospitals have cancelled routine breast, cervical and bowel screening to deal with Covid-19, a decision which could have appalling ramifications in terms of missed cancer diagnoses.

The science is there to guide government policy and, as Sir Patrick Vallance, the chief scientific adviser, disclosed last night, the measures do seem to be slowing the spread of the virus. But in the end it is for ministers to balance the short-term benefits with the long-term costs.