The gap between the people whose income and jobs are being hit by the pandemic and those largely unaffected risks being turned into a chasm by the new lockdown. The Government has introduced unprecedented supports for individuals and businesses. But these supports are, by their nature, limited and temporary while much of the damage now risks becoming permanent.
An extraordinary sacrifice is being asked here of a minority of the population – generally younger, generally lower paid. Their jobs are being put at risk and their businesses closed to protect the wider population. The comfortable classes “worry” about whether they will be able to meet friends for a few drinks at Christmas – those working in hospitality and retail worry about whether they will have a job, or a business, in the new year.
You don't have to look far to see the growing evidence of divide. In its latest presentation to investors who lend us money, the National Treasury Management Agency estimated that about half the economy – including the multinational-dominated sector, the public service and some other sectors able to continue – are largely unaffected by the pandemic. Most of the rest are exposed, with the worst damage in sectors which are relatively low age but employ a lot of people, such as hospitality, travel and retail.
Hospital Report
The to-and-fro debates between experts, all sure their own route is the way forward, are getting a bit tedious
It is a massive advantage that we have sectors doing well, Multinational taxes will keep flowing. Many of us are lucky enough to be able to continue working from home, But vast numbers of SMEs and self-employed people are in a dire situation, while youth unemployment will soon head back towards 50 per cent.
Pay rises
The divide is clearly shown in a recent Ibec survey on what companies plan in terms of wages next year. Among big business about half of firms plan to increase pay next year and half plan to freeze it. It is remarkable and a testament to the diverse strengths of the economy that half of firms are planning pay rises, At the other end of the scale, consumer-facing SMEs and their staff will merely be hoping to get through this.
The worry is that many won’t. Each time there is a lockdown, fewer jobs will return after the reopening and fewer businesses will make it back. The floor level of unemployment will rise.The Government’s apparent acceptance that we may be heading for successive lockdowns – and that is what the Taoiseach said – means our economic strategy now involves waiting for a vaccine.
Time here to acknowledge that no one has a magic solution and that while we have learned more as the pandemic has gone on, we also continually discover how little we actually understand. The to-and-fro debates between experts, all sure their own route is the way forward, are getting a bit tedious. The experts that chime with me are the ones who openly acknowledge the huge uncertainty.
We will wait and see how things evolve across Europe. So far our restrictions are much stricter than most – Belgium yesterday announced new measures, but all retail remains open, as do places such as cinemas, albeit with lower numbers. Perhaps in a few weeks the rest of the European Union will also be largely closed like Ireland. Nobody knows.
But if we are to head to further restrictions in 2021, we have to look at how we do this. In Northern Ireland, documents were published along with the announcement of restrictions there, drawn from UK government research on what contribution individual measures might have in terms of reducing the R0 (virus reproduction) number. It also looks at the economic cost and the risks of each measure.
Economic costs
Here we do not see this kind of detailed data or argument. We need to, because “that’s what Nphet said” is not enough. Fortunately the construction sector can stay open this time, but serious data-based consideration is urgently needed on what we do next and whether so much of the economy needs to close if restrictions tighten again in 2021. Non-food retail is seen in the documents published in the North, for example, as a lower-impact measure in terms of reducing the virus but one where closure comes with a high economic cost.
We now urgently need a group with wider expertise mandated to look at what we will do beyond this lockdown
We are starting from the position of what can stay open, rather than what has to close. We need to reverse our thinking to what has to close and what we can't do – and why. The current approach risks crippling the economy and society. To take just one example, Minister for Health Stephen Donnelly told the Dáil that tennis and golf cubs had to close because others sports were not allowed. Why not have a list of sports ranked from high to low risk and explain to people that, say, singles tennis can be allowed, but full-contact club rugby cannot? Or why you can go hill walking but you can't play indoor football?
The Government made a strategic error when it set up the new oversight group of senior public servants to examine National Public Health Emergency Team recommendations. This still left Nphet taking the lead by making the recommendation in the first place. We now urgently need a group with wider expertise mandated to look at what we will do beyond this lockdown, to take the initiative in looking at how we control the virus while doing less damage to our economy and our lives. And of course the much-discussed issues of test and trace will be central.
None of us know where the right balance lies. But the current approach of open and shut will leave a substantial minority of the population in deepening economic distress and will, in time, lead to the tentacles of recession spreading more widely across society.If hanging on and waiting for a vaccine is now Plan A, we need a Plan B if the magic injection does not appear in 2021.