Politics: ignorance is bliss

04/07/2020

A propos the government giving us permission to go to the pub for a drink, as from 6am today, I must admit that the sight of Downing Street bottom-feeders, and other such cretins, on our TV screens calling for "responsible behaviour" tends to invite a sharp rejoinder.

This usually involves a two-word instruction which, if not physiologically impossible, would be biologically highly undesirable. If I were to meet any of these creatures, I would tell them to their faces. These are the very last people on the planet to talk about "responsibility", or similar concepts.

This lack of self-awareness in government, however, is easily matched by media representatives, the classic example of the moment being Andrew Roberts complaining about Johnson's intention to introduce White House-style press briefings.

This, Roberts is warning – apparently with a straight face – will only "further trivialise British politics", as if that were even possible with the current state of the media. But then Roberts, by his own admission, believes Laura Kuenssberg to be "very sharp-witted", and Nick Robinson "equally clever".

Down in the weeds, though, where these clever people don't look, we see an intriguing report from the Irish press, telling us that a draft agreement has been reached between the Republic's government and EU officials to reduce the impact of Brexit on Irish agri-food exports and live animal exports.

This comes via the broadcaster RTÉ, which says that Irish food exports will gain access to the EU's "green lanes" network of transport routes after travelling on ferries from the UK to other EU member states.

This is especially relevant to vehicles from Ireland using the so-called "land bridge", travelling to the UK and then crossing over to the Continent via Dover. Unlike the UK traffic, which will be subject to a variety of checks, Irish trucks will be able to bypass the customs channels and pass directly across borders with minimal formalities.

The concept, from the look of it, is quite recent, introduced in March of this year, as a result of border delays arising from Covid-19 control measures.

Applicable to internal borders, the idea is to avoid disrupting the European supply chain and, in the context of roads accounting for 75 percent of freight transport, the EU Commission is anxious to avoid delays, especially as waiting times at some internal borders went beyond 24 hours, even for medical supplies.

For the system to apply at external borders would be an extension of the principle, but there is little objection in principle to arranging fast-track clearance for Irish vehicles coming through the Channel ports. If nothing else, this will serve as a reminder for British operators of what they are missing.

But what this also tells us is that the Commission (and the Irish government) is quite definitely expecting delays at the Channel ports – something which will come as no surprise to those who have been watching the situation, even if it shocks British politicians and many businesses.

It seems, though, that while the EU is steadily making preparations to cope with a no-deal TransEnd, the UK media is unable to focus on such boring things and is indulging itself by covering the end-of-lockdown news and related matters. You will struggle mightily to find any Brexit-related news for today.

We are, however, seeing a small amount of interest in the Irish Times as it confronts the "appalling vista" of a second Covid-19 outbreak and no-deal Brexit.

This is hardly a new theme, but the story here is that the Irish Central Bank is shunning forecasts in the face of what they see as the "extreme uncertainty" of these two events combining. Instead, the bank sets out two scenarios for the economy.

Its "baseline" scenario involves gradual reopening of the State this year and a rebound in economic activity, in which case it suggests that the economy could contract by 9 percent in this year, expanding by 5.7 per cent in 2021.

A more "severe" model would mean the economy contracting by nearly 14 percent in 2020 with unemployment staying elevated for several years after that. This assumes the lockdown period has a more damaging impact on economic activity and that there is a virus resurgence at some point over the next year.

Should this scenario take effect, it would take until 2023-24 before the economy rebounds fully from Covid-19.

But the point made by the Irish Times is that the Bank is not prepared to speculate on the probability of either outcome. And rather than a cop-out, it protests that this is a public health matter and therefore outside its bailiwick.

If it was to start speculating, it would have to acknowledge that the "severe" scenario is not the worst case. That would be if no vaccine arrives and the new normal involves perpetual social distancing and disease vigilance. But the Bank stopped short of evaluating the effect, presumably because the ramifications are too difficult to estimate.

But if these are the disease scenarios, layered on top of them are three possible TransEnd variations: a trade deal between the EU and the UK; no deal with an orderly transition to tariffs; and a disorderly, no-deal outcome. At the moment, the two Covid-19 scenarios presented assume a EU-UK trade deal.

Inevitably a complete breakdown in the trade talks would significantly amplify the Covid-19 shock, which gives rise to what is being called "the Dracula scenario". This is where a second wave of coronavirus and a chaotic no-deal TransEnd hit at the same time.

There is already recognition that some of the failures that a no-deal scenario might have brought have already been occasioned by Covid-19. Thus, some of Brexit effects that would have been expected next year have been front-loaded into the economy as a result of the lockdown.

Thus, while a worst case scenario for Brexit/TransEnd might not be as bad as it could have been in pre-Covid times, we have to take account of the possibility that the combination could be worse than either.

It you really want to stoke up the nightmares, though, you can add in a third element – the "net zero" preparations so beloved of the climate changers, which hasn't gone away. The drag on the economy, on top of the other two events could be… "interesting".

Yet, all of this is practically a closed book for the British media and our politicians. Keen to lecture us on how we should behave when we visit the pub, either and both have long since ceased addressing grown-up topics.

Whether we will have to focus on them, of course, is beyond speculation – which is why the Irish Central Bank is exercising caution. But the "double whammy" or "Dracula scenario" can never be ruled out.

Here, we have the example of Israeli experience, which has seen an increase in incidence in Covid-19 since relaxation of its lockdown just over a month ago.

What is interesting here is the timescale. There is usually a lag phase when dealing with the early stages of an epidemic, and if it takes a month for the mortality rate to respond to changes in lockdown regimes, then we need to expect an upturn to be evident in August.

But then, if we start looking at cyclical effects, with the incidence curve starting to look like a sine wave, that could spell bad news for the end of the year. But then, as long as we don't speculate, then we can pretend nothing bad is going to happen. I think this is known as "ignorance is bliss".

And, if that's the policy, we certainly have the right prime minister for it. Just lie back and drink for England.

Also published on Turbulent Times.