Public Policy Dynamics UK #4

by RPP colleagues

Health and Politics in the United Kingdom

Total COVID-19 cases:4,154,562
14-day total COVID-19 cases per 100,000:233.9
14-day change:-101.6
Total COVID-19 deaths:135,613
14-day rise:14,939
  • Chancellor Rishi Sunak is set to announce his budget on 3 March. Sunak is expected to pledge £30 billion to extend the furlough scheme along with other critical Covid-19 support measures into June, and may, controversially, corporation tax from 19% to 25%.  A key dilemma for Sunak will be balancing fiscal conservatism with the need to kickstart Britain’s economic recovery. In Scotland, rifts within the Scottish National party are deepening, making a decisive SNP victory in the Scottish election in May, and with it an ‘advisory’ independence referendum, appear increasingly unlikely. 
  • Through the Budget, Sunak is planning the launch of a Life Sciences Investment Programme, to be matched by private investors including the UAE. Separately, amidst rising pressure on global blood plasma supply, the Government has reversed its decades-old band on allowing domestically sourced blood plasma to be used for immunoglobulin medicines.
  • Britain’s vaccination strategy and prolonged lockdown appear to be paying dividends as Covid-19 infections and deaths have begun to decline. Nearly 20 million people have received at least their first shot of a Covid-19 vaccine and average daily new cases have dropped from an average of 56,000 in January to 13,000 in late February.  Encouraging trends have allowed Prime Minister Boris Johnson to lay out his plans for lifting lockdown restrictions across England. With sustained vaccinations and declines in hospitalisations, all restrictions will be lifted by the summer.

Politics

  • Many expect Sunak’s Budget to set the direction of travel for post-Covid-19 Britain. Sunak is widely expected to allocate £30 billion to extend Covid-support schemes into the Summer so as to align financial support with Johnson’s plans for lifting lockdown restrictions. Less is known about his stance on raising corporation tax in the face of rising public debt. Some rumour Sunak will follow US President Biden, who had proposed to raise US corporation tax from 21% to 28%. Although the UK has the lowest corporation tax rate within the OECD, standing at 19%, a tax hike has numerous opponents in Parliament, ranging from Conservative backbench MPs to, somewhat surprisingly, the Labour party leadership.
  • A host of economists across the policy spectrum, ranging from banks to think tanks, have urged Sunak to dramatically boost fiscal spending to aid the economic recovery. As with taxes, Sunak is prodded to follow the lead of Biden, who is currently pushing Congress to approve a $1.9 trillion stimulus package. The Chancellor’s commitment to “balancing the books” has been criticised as ideological rather than pragmatic, given Britain has been predicted to recover markedly slower than its European peers and interest remains for international borrowing remain at an all-time low.
  • Tensions continue to rise between Scotland’s First Minister Nicola Sturgeon and her predecessor, Alex Salmond. In a recent submission to a parliamentary inquiry into the handling of complaints against him, Salmond accused Sturgeon’s husband and SNP chief-executive, Peter Murrell, of working against him in a biased investigation dating back 2018. The Scottish government in 2019 accepted the investigation was biased and Salmond was later acquitted of all charges. The dispute has wider ranging implications for the UK as it has the potential to stunt Sturgeon’s chances of winning a majority in May’s Scottish parliamentary elections, in which case it is unlikely she would be able to call an, albeit only ‘advisory’, second referendum.

 

Health

  • Ahead of the Spring Budget, proposals have been finalised to launch a public-private life sciences investment fund in partnership with the UAE. The UK Government would invest £200 million into the fund, with twice that amount being matched by external sources. The fund, which would be part of Britain's new Life Sciences Strategy, would invest in companies directly or through existing biotech funds. With the UAE seeking to diversify its investment portfolio and the UK looking to establish itself as a leading nation in the life sciences, such an agreement could turn out to be a win-win situation.
  • Britain has lifted its decades-old ban on allowing UK blood plasma to be used for the development of therapeutic immunoglobulins. Immunoglobulins are made from plasma donated by the public and often used to treat patients with weakened immune systems and antibody deficiencies. The ban was introduced in 1998 in response to concern over the spread of a human variant off BSE, nicknamed “mad cow disease”. Experts have now advised the use of UK-sourced plasma to make these treatments for patients within the UK is safe, provided that every medicine is individually reviewed and evaluated and that donations are traceable. This decision comes in the wake of pressures on global blood plasma shortages, which have been exacerbated by the Covid-19 pandemic. Britain’s main international supply sources have narrowed as the number of blood donations globally has reduced. Given that this reduces Britain’s reliance on imports, this could be interpreted as yet another symbolic step toward British independence.
  • The Supreme Court has found that Health Secretary Matt Hancock has acted unlawfully in failing to publish information pertaining to several billions of pounds worth of public contracts in a timely manner. In order to comply with transparency legislation, the award of any state contract must be published within a 30-day window. Hancock is criticised for awarding contracts to supply goods and services vital to tackling the pandemic to companies owned by people personally connected to him. Many of these companies had not produced medical equipment before. Hancock defends his actions, appealing to the urgency of the situation.

 

Covid-19

  • Recent statistics reveal the UK is seeing its first substantial fall in the number of Covid-19 infections, as well as in hospitalisation and death rates. Much of this fall is attributed to the lockdown, with vaccinations set to take big effect in the coming weeks. Whilst an average 56,000 new daily cases were recorded in January, this has now dropped to around 13,000 as of late February. Nearly 20 million people have received their first shot and Britain boasts one of the highest vaccine confidence rates in Europe, with 92% of the population either wanting the jab or having had it already, according to a recent study.
  • Prime Minister Boris Johnson has laid out his plan for taking England out of its 2-month-long lockdown. The first major step will be reopening schools, which is set to take place on the 8 March. Whilst large segments of the hospitality sector, such as hotels and indoor dining will not reopen until 17 May, non-essential retail, gyms and outdoor dining will be allowed to open over a month before that, on 12 April. A full lifting of the lockdown is expected on the 21 June. However, Johnson has made it clear that this is contingent on the vaccine rollout continuing to go plan and hospitalisation rates continuing to decline.
  • Although this roadmap has largely been deemed to take a “cautious” approach, Johnson has been criticised by teachers and their unions for not implementing a phased return to schools, whereby different year groups gradually come back into the classroom. Unions argue that a full reopening of schools will at once bring nearly 10 million pupils and staff into circulation in England and urge Johnson to follow Scotland’s lead. The Scottish approach allows for a phased return to schools lasting from February to early April, after which Scotland will return to a flexible “tiers-system”, rather than a wholesale lifting of restrictions.

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