Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.
Back in May 2020, I wrote that a high-efficacy vaccine was the biggest economic stimulus available to us. Removing whatever barriers existed to its approval and rollout, so accelerating the end of the pandemic, was worth billions of pounds per week in GDP and hundreds of lives. Stock market reactions last year implied vaccines were potentially worth 5-15 per cent of global wealth. But it’s now clear there’s a need for even greater urgency in getting the UK vaccinated.
The disease outlook is grim. As of Sunday, the number of people hospitalised with Covid-19 in England was 32 percent higher than its April peak, with new daily admissions above those seen last Spring. In the South East, the number of Covid-19 patients in hospital is near double the 2020 peak. Chris Whitty explained yesterday how case curves are trending upwards in other regions. Given recent trends and mobility data less responsive so far than to lockdown one, things will get worse before they get better.
So a national lockdown was perhaps inevitable. To judge by Twitter, people were gearing up to revive their pro- and anti-lockdown talking points beforehand. But the armchair cost-benefit analysis from Spring 2020, or even November, is no longer valid. First, because we have vaccines already being rolled out that will, at the very least, mitigate against Covid’s worst effects. Second, because the new mutation appears more highly transmissible in the face of given suppression measures. Both realities strengthen the case for reducing interactions now. Both increase the urgency for rapid vaccination.
The benefits of measures that reduce transmission of the disease are more certain with vaccines available. Lockdown sceptics had a point when they said at least some “lives saved” from government mandates last year were deaths deferred until the next wave. Now, with only 20 million full vaccination courses required to inject demographic groups making up 97 per cent of cumulative deaths so far, avoiding infections today means avoiding Covid-19 deaths forever. That makes the case for breaking up social networks all the stronger, including through closing schools (evidence suggests children are seeding the virus into households).
The high transmissibility of the new strain supports this action. A more rapidly spreading virus increases the risk of “overshooting” ICU capacity. Such is the speed of spread (one in 50 people had the virus last week), each day of societal delay in reducing the transmission rate below one accelerates the crunch. So quickly are we becoming infected, herd immunity may even come this year. The choice before us is whether we achieve it through the route strewn with significant deaths and bad illnesses, or via a path where injections eliminate almost all severe cases.
It feels almost lame to say it—as if nobody ever thought of it—but both the public health and economic consequences suggest we must do everything possible to speed up the vaccination process. We are in a straight race between vaccinations and the virus, and I fear even Boris Johnson’s revised timetable is too slow.
In an ideal world, with plentiful vaccines, logistics ready, and vaccines preventing transmission, the best path to herd immunity would be to vaccinate high transmitters first in a geographically concentrated way. However, we do not know whether the vaccines actually reduce transmission yet, and Chris Whitty contends that there will be supply shortages for months. If that is true, prioritising those at highest personal risk, as the government is doing, makes sense.
The UK regulator was admirably swift in vaccine approval. But doses available have been revised down massively since November and it’s not obvious why things aren’t moving faster. Reported vaccinations in week two (through 27 December) were not even half the number of those in week 1. Sure, this was Christmas week, but why not have longer working hours on other days to compensate? With a spreading virus, delay costs lives. Oxford/AstraZeneca’s vaccine was approved last Wednesday. It was not rolled out until Monday. Why? The virus doesn’t take time off to celebrate New Year’s Eve and a bank holiday.
Yesterday, Johnson said that 1.3 million vaccinations had now been undertaken. That’s only around 350,000 in the past eight days – nowhere near fast enough given the balance of costs and benefits. By mid-February, he hopes that 13.4 million first doses will be achieved. That requires two million per week from now until then. Yet even that seems tardy given the costs of lockdowns.
We must be pulling every lever here. Constraints to early roll-outs should have been foreseen. And if there are unforeseen roadblocks, economists would advise that raising the price you are willing to pay encourages supply. If, as reported elsewhere, a lack of vials is really the problem, what incentives are being given to ensure manufacturers work round the clock, seven days per week? Making the activity more profitable increases the willingness to pay overtime, train new workers, and run machines hot. If not vials, identify the production or staffing bottleneck and apply the same logic.
Eliminating barriers to vaccinator volunteers is a no brainer. So it’s heartening that the government is “reviewing” red tape that says vaccinators must be diversity, terrorism, and fire-safety trained. But financial incentives could help too. The NHS is giving GPs an extra £10 for every care home resident they vaccinate this month, which makes sense given 36 per cent of deaths have been in homes. Yet what about financial inducements for extended hours, weekend work, and more?
This would not only help in getting more vaccinations delivered, but potentially space them out a bit too. So prevalent is the virus right now, hordes of people packed into waiting rooms could lead to infections even prior to vaccines being administered. Is anyone establishing drive-through or outdoor sites, as seen in Israel?
Nor can we afford wasted vaccines. The zero out-of-pocket price means no penalty for people or providers for missed shots. With the possibility of vaccines wasted or appointments missed, GPs, hospital workers, and (hopefully) pharmacies should have the decentralised authority to administer them to “ineligible” individuals without the threats of repercussions to avoid waste. A vaccine dose to someone is better than no one. Let’s not sacrifice lives on the altar of “fairness.”
The Government’s “first doses first” policy shows that Ministers understand inoculating more people sooner is essential, even with a potential efficacy trade-off. But this strategy only helps in the medium-term if the supply is ramped up. The economy and the public health effort require getting the manufacture, logistics, and physical delivery expanded in the swiftest time possible. It’s not easy, but the language from government sometimes treats the stated constraints fatalistically, rather than seeing them as an economic problem that prices, incentives, and regulations could affect.