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Weekend reading: Stuck in the middle with you

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What caught my eye this week.

The lockdown continues, with the predictable result that the global economy has fallen off a cliff in barely a fortnight.

I’ll repeat again – we cannot take many months of this.

I continue to have doubts about how we’re approaching this crisis, whilst conceding most policy makers are striving to do the right thing with incomplete data and faced with horrible choices. It’s easy for pundits with blogs to speculate about alternative approaches. Rather different if you hold people’s lives in your hands.

Anyway, the links below – offering several different perspectives – cover where we’re at.

To be honest, social distancing rather suits me. I know others are finding it very tough going. Extroverts have owned the world for 30 years, and being asked to sit in a quiet room alone is alien. And nearly all of us could do with putting an arm around a friend again.

I thought the Farnham Street blog had a nice take on making the best of things:

What’s important is that you find an activity that lets you move past fear and panic, to reconnect with what gives your life meaning.

When you engage with an activity that gives you pleasure and releases negative emotions, it allows you to rediscover what is important to you.

Wouldn’t that be a wonderful dividend from disaster, even as cash dividends are cancelled?

The markets continue to do their thing. While the plunge was heart-stopping, I don’t think many shares are at bargain basement levels. With rates at zero and only a year’s worth of profits definitely set to be eviscerated, maybe they shouldn’t be? I’m not worried about most of my investments on even a medium-term view, let alone the long-term.1

This weekend will be hard. The sun will be out. Doctors and nurses will again be going into the trenches while most of us hide it out safe behind the lines.

Whatever one’s personal feelings about the universal lockdown strategy, it’s the path we’re on. Let’s hang tough.

I’m pretty confident in a year we will be talking about defusing capital gains tax and filling our ISAs, just so long as the economy isn’t utterly derailed.

Happy quarantine!

From Monevator

What has changed and what has not – Monevator

From the archive-ator: How talking about money is like French kissing – Monevator


Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!2

Economists warn of ‘unprecedented’ recession as PMI hits record low [Search result]FT

950,000 apply for universal credit in first two weeks of UK lockdown – BBC

UK banks banned from requesting personal guarantees for loans – Guardian

One in 15 people in London may already be infected with the coronavirus [Search result]FT

Loan and credit card payments to be frozen for three months in UK – Guardian

Coronavirus crisis: your financial rights [Search result]FT

Global lay-offs surge as 6.6m Americans file jobless claims – FT

Products and services

Six things you need to know if you’re applying for Universal Credit – ThisIsMoney

Robo-adviser results: Nutmeg and Wealthify vs Vanguard year 2 – Much More With Less

Surge in investment account openings on UK platforms [Search results]FT

Beware of Google ads for ‘bonds’ touting mouth-watering returns – ThisIsMoney

Victorian gothic homes [Gallery]Guardian

Comment and opinion

When dollar-cost averaging matters the most – A Wealth of Common Sense

The majority of Vanguard investors are holding steady during the crisis [Data]Vanguard

Recovering from the coma – Investing Caffeine

Was that the bottom? – Of Dollars and Data

Barry Ritholtz: Maybe the coronavirus didn’t end the bull market? – Yahoo

This too shall pass – Humble Dollar

Rebalancing Vs taxes Vs expenses Vs life – Retirement Investing Today

Simon Lambert: Why are the airlines making it so difficult to get coronavirus refunds? – ThisIsMoney

Financial Independence and the virus mini special

They all retired before they hit 40. And then this happened – New York Times

The implausible millennial movement to save, invest, and quit the workplace – Vox

Naughty corner: Active antics

Dabbling with discounts – IT Investor

Which way now? [PDF]Howard Marks

Terry Smith: my scepticism of value stocks was proven correct in market sell-off – Money Observer

Developing a buying policy for the bear market – Simple Living in Somerset

The limits to lessons from past bear markets – Validea

COVID-19 corner

Just how deadly is the virus, really? – BBC

Why death and fatality rates differ – BBC

Test and trace with Apple and Google – TechCrunch

The math behind social distancing – Visual Capitalist

With this virus, a majority of ventilated patients are not coming off the machines / are dying – NPR

How NHS Nightingale was built in just nine days – BBC

The cost of compassion: Every life saved sees the US foregoing $1m in economic activity – Mr Money Mustache

Tim Harford: How do we value a statistical life? – FT

The real reason epidemiologists and economists keep arguing – Bloomberg

Why it’s so freaking hard to make a good COVID-19 model… – FiveThirtyEight

…although with that said… in praise of models – The Atlantic

We may be underestimating the COVID-19 death toll – Bloomberg

Will the economy ever get back to normal? – The Reformed Broker

Submariners likely unaware of global pandemic – Associated Press

Kindle book bargains

Remote: Office Not Required by David Heinemeier Hansson and Jason Fried – £0.99 on Kindle

Tin Can Cook: 75 Simple Store-cupboard Recipes by Jack Monro – £0.99 on Kindle

Side Hustle: Build a Side Business and Make Extra Money by Chris Guillebeau – £0.99 on Kindle

Elon Musk: How the Billionaire CEO of SpaceX and Tesla is Shaping our Future by Ashlee Vance – £1.99 on Kindle

Off our beat

Why time has slowed – Morgan Housel

Will the coronavirus kill AirBnB? – NY Mag

Live for today, plan for a better business tomorrow – Michael Katz

The Zoom privacy backlash is only just getting started – WIRED

And finally…

“Without us, Earth will abide and endure; without her, however, we could not even be.”
– Alan Weisman, The World Without Us

Like these links? Subscribe to get them every Friday!

  1. This future is unevenly distributed among different companies. Also you need to factor in some disruption impact for everyone. And if we get into a 3-6 month long lockdown like today’s and with it a depression, all bets are off. My belief is that politicians (and the public) will demand the economy is switched back on before that happens, rightly or wrongly from a medical point of view. []
  2. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. []

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{ 194 comments… add one }
  • 51 Dawn April 4, 2020, 7:26 pm

    I’ve learned so much from monevator which i am grateful and will carry on doing but the Invester himself tends to add a slight negative and pessimistic twist.
    “Ill repeat…we carn’t take much more of this” are his words.
    Are you a virgo by any chance, they can be very negative?
    A recent interview with Bernstein said ,if we can survive the Great depression we can survive anything. He also added markets were very resilient.
    How long did the world wars last , years, certainly not a few months.
    I also read 2008 was much worst because the banks were about to go bust.
    Mathews comment seemed more balanced and IMO.
    Anyway ,I’ve held on and sold nowt!

  • 52 The Investor April 4, 2020, 8:02 pm

    @Dawn @Neverland — Yes, we survived the Great Depression / the Thatcherite retrenchment. Few would argue permanent scars weren’t left by both, and plenty of deaths in the former. Survival is a low bar. But sure, if that’s the bar we will clear it easily.

    @ZXSpectrum48k – I don’t understand the “one long lockdown and done” theory. We got to this point with a tiny (known) infection source over just a couple of months. We now have the virus rampant here and abroad across the entire globe.

    Let’s say we bring the current wave in the UK down to near zero and finally turn off lockdown. Surely we get untracked new clusters again? That ramp up fast once more?

    Of course far faster testing and tracking in the future would help. I guess the presumption would be we sat on our hands two months ago but we are now alert to the reality.

  • 53 Neverland April 4, 2020, 9:17 pm


    I’m guessing you stamp it out domestically, close your borders, prepare and then do what you should have done in the first place

    At this point I wouldn’t assume the UK government has a plan that looks that far ahead

  • 54 Seeking Fire April 4, 2020, 9:18 pm

    Some very interesting links and well thought out comments by people. I’m not selling (again – I think for those with a couple of decades accumulation to go please don’t unless you can market time) but equally global equities just look less expensive, not cheap. But who knows for certain why, my best reasoning is (a) rates are zero (b) markets think we’ll basically adopt the Investor’s strategy (which FWIW, which is nothing, I agree with). Do not sell (unless you think you can market time – you v likely can’t).

  • 55 Snowman April 4, 2020, 9:56 pm

    My hunch TI is that your estimate that 7 million of the UK population have or have had the virus is a reasonable one. I might even guess higher than this. The difficulty is in estimating the overall death rate (e.g. 0.3% or 0.6%?) because we still don’t know the proportion of asymptomatic cases or even how many symptomatic cases there have been. Only the Italian town data has come close to giving us help with the asymptomatic proportion here although the Chinese seem to be claiming there are a large proportion of asymptomatic cases. And it is hard to estimate how long UK deaths will increase as even the death and cause of death data is sketchy, and it isn’t clear what time lags are present, and how the lockdown measures will have affected the R(t) and so whether the peak in deaths will be in 2 or 3 weeks or longer and how high they will go up to in that period to the peak. Deaths are on average from people who were infected 4 weeks ago, so knowing future deaths for the next 4 weeks and the death rate would give us an estimate of sorts but we can’t really estimate either.

    So it can only be a hunch at this point so could be completely wrong. But if Porton Down really can do 3,500 accurate antibody tests on some sort of random selection of the population as was suggested at a press conference this week then in a couple of weeks it shouldn’t be too difficult to come up with a reasonable estimate accurate to within say a factor of 2. Whether that information is made public is another matter.

  • 56 Vanguardfan April 4, 2020, 10:31 pm

    Those of you who think we’ve got millions of unknown infections out there. I don’t know how you’re reaching those figures.
    At present the UK has about 4300 deaths and 42000 positive tests. We know we are under testing (although maybe most hospitalised cases are tested). In China the mortality rate for the clearly symptomatic cases was about 1%, so let’s say we actually have more like 400,000 clearly symptomatic cases. I’ve not read anything that estimates higher than 50% for asymptomatic/so mild they are unnoticed cases, so that takes us up to about 800,000.
    That’s clearly loads more than we have recorded, but it’s nowhere near 7-8m, or even 2m.
    I accept that this is no better than a fag packet calculation, and proper studies are needed, but I do have a problem with ‘there must be millions already’. Much though I would love to believe it, and I hope you are proved right.
    (Also, remember the critical spatial nature of the spread. You who are in London will have a very different perception of prevalence, because you are in the first epicentre. This might explain why your hunches are different from mine).

  • 57 Neverland April 4, 2020, 10:51 pm


    “Those of you who think we’ve got millions of unknown infections out there. I don’t know how you’re reaching those figures.”

    They are getting it from wishful thinking. No one knows.

  • 58 The Investor April 4, 2020, 11:23 pm

    @vanguardfan — Did you read the FT “1 in 15 in London” article in the news links above? That’s from the IC model group who drove the UK gov policy towards full lockdown.

    From memory their latest working paper estimates between 1 and 5.5% or so of the population has been infected with C19. At the upper end that’s 3 million plus. Just under three-quarters of a million at the low end.

    So say 1.5million in the middle.

    Again, from the official Imperial modelling team! Not from my fag packet! 🙂

    The latter packet skews higher on a various hunches, one of which is that the official estimate seems to always run a week or so behind reality! 😉

    As @neverland remind us in his inimitable fashion, of course nobody knows for sure. Presumably he intends to reveal his constructive thoughts and strategy in a decade or so when all the data is in.

  • 59 The Investor April 4, 2020, 11:28 pm

    @Snowman – Agreed. Assuming the serum test is accurate we’d have to be very unlucky not to get some great insights from such a survey.

    I remember in the very early days the government picked 10 places in the country where it was going to test randomly (for live infection) as a sort of early warning system / indication of spread. Not sure what happened to that, presumably it was overwhelmed by incoming. 🙁

  • 60 xxd09 April 4, 2020, 11:56 pm

    Sweden remains an interesting outlier
    Will they pull it off without total economic shut down?
    If they do (master the Coronavirus outbreak that is)-how did they do it?

  • 61 Vanguardfan April 5, 2020, 5:43 am

    Ah yes, Imperial College has the very highest quality fag packets ;-). So even their very highest estimate might get us to 3m, not 7-8m. And 3m, still leaves us with a huge number of unexposed. Therein lies the issue.

    Btw, the scheme to randomly test was based on existing flu surveillance mechanisms:
    I’d forgotten about that, perhaps it was stood down along with the contact tracing efforts.
    It would certainly be difficult to implement now that primary care has pivoted to seeing virtually no patients face to face, and people with respiratory symptoms have been told to stay home and dial 111..

    The problem with crisis mode is that the emergency response takes all the bandwidth. That’s my fear for coming out of lockdown – we really need to be planning and gearing up for a massive trace and isolate exercise to accompany that, but right now all capacity is going to the immediate treatment and response. That’s going to go on for some weeks, judging by Italy and Spain. Lifting restrictions too soon would actually be the worst of all worlds, as we would have gained very little.

    Btw I’m with ZX and, yes, Neverland, in pointing out there is another way of viewing the ‘economy vs lives’ tension. Thanks for that.

  • 62 Penelope April 5, 2020, 7:45 am

    Is it just a co-incidence that Imperial College was named after a large publicly-quoted cigarette manufacturer? I think we should be told.

  • 63 Snowman April 5, 2020, 7:59 am

    In terms of the numbers, assume:

    Period from infection to death = 22 days (20 days infection to death + 2 days reporting delay on average)

    Assume infections have doubled every 5 days until 24th March 2020 (lockdown) and so deaths will increase every 5 days until 15th April 2020 (22 days after lockdown).

    Assume infections halve every 8 days from 24th March 2020 and so deaths halve every 8 days after 15th April 2020

    Assume the real death rate is 0.5% (probability of someone with the virus dying) to take into account asymptomatic cases.

    Ignore lots of other things (e.g. care home coronavirus deaths – sadly there have been multiple covid19 deaths at a care home near me, they aren’t hospital deaths so won’t count in the daily figures, and anecdotedly it appears the death certificates aren’t even showing covid-19 so won’t even be in the ONS statistics, and ignore covid-19 hospital deaths where covid-19 is likely to be the cause of death and so case should be reported as covid-19 but isn’t in practice).

    Question 1: Do those assumptions get you to around 8 million currently with the virus or who have had the virus in the UK?

    Question 2: If you think it does get you to ballpark 8 million, which of my assumptions do you think is wrong?

    Not remotedly pretending that this is anything more than guesswork, and accept my assumptions will be wrong, but I think it is enough to form the basis of a hunch.

  • 64 BBlimp April 5, 2020, 8:25 am

    Estimations across the 70m pop of the U.K. kind of impossible because the deaths etc figures are so scewed toward London which is ahead of the other regions

    I suspect the proportion of Londoners who’ve had Coronavirus is huge.

    Of the tiny group of people being tested think how many are coming back positive – Prince Charles / Boris/ Matt Hancock etc etc … and it’s hard to imagine this group of people were packed in like sardines on the tube before the lockdown

    I had a temperature and a headache, woke up with sore limbs, for about fifteen days. Had it not been for Coronavirus the symptoms would have been at the ‘carry on as normal it’s one of those things’ level, albeit for far far longer than one normally has a temp.

    Did I have corona ? Sadly we won’t know until June at the earliest.

    ( I live & work in Inner City London, what some might generously call ‘central London’ )

  • 65 The Investor April 5, 2020, 8:41 am

    @vanguardfan – Morning. 🙂 I don’t think I ever said 7-8m, I believe I said “several” and @Snowman numerated it thusly. Perhaps I should have said “a few”. Still very much higher than anything like the official cases still guiding the public discussion, and I’d be more surprised if the true number now was less than 1m versus more than 7m.

    @BBlimp – I had a sore throat for a week or so, a day of hotness and tiredness, and a two-day headache. It never became anything else (eg a cold). At the time we were still looking for fever and continual cough, so I presumed not CV. Sore throat with neither has now edged into the CV symptom list and it’s become understood mild CV is fairly commonplace, so I think it possibly was. We’ll see, but I hope so.

  • 66 The Investor April 5, 2020, 8:48 am

    P.S. Edited my comment as less than / greater than symbols were edited out by browser. Also I agree with you about testing and tracing. As stated above given where we were I think this first lockdown was the right call. But we do need to do something with it. Hospitals and equipment, testing system set up etc.

    Going to just monitor comments from here as like I said I’m in questioning mode, not “I know it all” mode but this sort of discussion ends up implying the latter as it goes on. Have a good day all!

  • 67 Dan H April 5, 2020, 8:57 am

    @Vanguardfan to get the total infected you have taken the current number of deaths and multiplied it by an estimated fatality rate of 0.5% including asymptomatic cases.

    Assuming you want to include those currently infected, using the current number of deaths is invalid due to the time lag from infection to death. You would need to estimate the number of deaths in 3-4 weeks time to use for your input. This would give an output several times higher than 800,000. This is where the higher infected figures come from.

    Of course this can also be massively affected up or down by changing the estimated fatality rate.

  • 68 Neverland April 5, 2020, 9:13 am

    Here are some figures to think about

    UK government tax revenues £600bn

    Latest estimate of conovirus support cost from the IFS £200bn

    That tax take in 2020 will collapse too due to lost income/profits

    Taxes are going to go up a lot

    Can’t really make a hole in that without raising income tax

  • 69 Naeclue April 5, 2020, 9:21 am

    The exit strategy I think has always been clear. Scale up testing so we can return to trace and isolate, together with isolation of the “most vulnerable”. Better information is of course key to getting there. The trade off between economic damage and number of deaths is much easier to handle once we have more reliable data on the death rates.

    Innovation/experience on how best to treat the infected will help bring down the death rate. Antivirals will likely come along, but again we need scale. There has been some talk about introducing alternatives to ventilators for some patients that may help, such as old fashioned iron lungs.

    Although we need more, ventilators are far from a panacea, very much a last resort. They are horribly intrusive, can damage lungs and put more pressure on the heart. I have a couple of relatives in their 90s who have already said if they get the disease they do not want to be resuscitated or ventilated. The more treatments that can be introduced earlier that keep people off ventilators the better.

    I suspect as well that infection rates in London may be quite high, in line with the spirit of the latest IC paper as, anecdotally, I know quite a few people who think they may have had it. A family of 5 living next door are fairly certain they have. The mother had all the symptoms and has just about recovered. Kids had it and barely noticed.

  • 70 Naeclue April 5, 2020, 9:25 am

    @Neverland, inheritance tax will likely rise 😉

  • 71 Jonathan April 5, 2020, 9:31 am

    In terms of exit strategy, I was intrigued by a story on the BBC website today describing how Holland has a much looser lockdown than the UK and other countries – and concern whether it was enough. (Basically, most shops and activities where social distancing can be maintained are still open, only things like pubs and restaurants are closed along with activities requiring person to person contact like hairdressing).

    So I looked up Holland on the Worldometer coronavirus tracker. They have had these measures in place for approximately 3 weeks, and the exponential factor for deaths is now easing off in the same way that Italy’s did after 3 weeks of much stricter lockdown. To be optimistic, that gives at least a model for partial easing of UK restrictions once the infection rate gets under control.

    The important stage for reaching something near normality will be having schools return. That has been pretty much discounted for the entire summer term so the target is next September. The question is whether by then it is identified how to control any new surge, and how to deal with new cases better so that a much smaller proportion end up in a life-threatening condition.

  • 72 ermine April 5, 2020, 9:46 am

    @Penelope 62 What the world doesn’t need at the moment are any more conspiracy theories 😉 Imperial College was my alma mater, so I will defend its historical record. No, it wasn’t named after the cigarette brand. It was formed out of institutions created at the height of Britain’s imperial past in Victorian times, although it was chartered by that name in 1907, the sun had yet to set on the British Empire at that time.

    You can certainly charge the name with being not woke, but it wasn’t established by a cigarette manufacturer to deny the consequences of smoking. HTH.

  • 73 Jonathan April 5, 2020, 9:59 am

    @ermine I am another with a connection to Imperial.

    For ages they preferred to call themselves IC because of the embarrassment of the Empire connection (not tobacco!) until they realised that their reputation was bigger than that. They now get the benefit of a name with widespread single-word recognition like Harvard or Yale. Most other universities are named after the city which happens to house them.

  • 74 Tom April 5, 2020, 10:05 am

    By being our own antisocial selfs of course. Have you seen swedish bus stops, even before this pandemic? You’re talking about the people who will wait at their door until they hear the neighbour has cleared the stairway before leaving apartment.

  • 75 Penelope April 5, 2020, 10:13 am

    @Ermine 72 @Jonathan 73.

    Thanks for clearing that up. Where do you stand on the question of the Moon Landings?

  • 76 two shilling and sixpence April 5, 2020, 10:18 am

    On the number of asymptomatic cases i understand that in one village in Italy all the population was tested. For every positive test with symptoms there was three positive tests without symptom.

    Our best way forward i feel is the antibody home test currently been developed and the hope that the virus dose not mutate so those infected have some immunity

  • 77 Richard April 5, 2020, 10:25 am

    There are only two apparent ways out I see. Firstly, and the one I have been assuming, is herd immunity. High deaths by default, though as long as you stay below capacity you can minimise this. It truley ends (or at least bubbles away quietly in the background and life returns to normal).

    The other is squash it now and revert to containment. In theory much lower death toll. To date I have not really entertained this as a valid approach considering the world wide infection rate. While the rest of the world is infected you will be forever fighting against sudden re occurances and super spreaders. It also didn’t work first time around and many ideas are yet untested. The result could be lots of little lock downs in the future if not handled well and still high death rates.

    But maybe there is something to the second approach. It appears to be working well in South Korea. I guess time will tell, but thanks to these comments for making me think about it further.

  • 78 Matthew April 5, 2020, 10:26 am

    With the intrusiveness of ventilaters, their low success rate and shortage, maybe we should make people sign DNARs as a condition to going into/working in a hospital, nursing home, prison etc, or have an opt out system

  • 79 Vanguardfan April 5, 2020, 11:13 am

    Ok, I concede that many realities are compatible with current observations (th Scottish CMO is working on 1000 cases for every 1 death, I had doubled that).
    I hope the UK government acts more quickly and effectively on antibody testing than it has done so far, of course the whole globe sees the need for this, and I suspect our first useful data will come from elsewhere.
    Btw I do of course hope that all of you who suspect you’ve had it are correct – I’m sure all that any of us wants is to have had a mild infection that confers lifelong immunity. I had a cold myself last week, and was wishfully trying to identify odd things about it. On the other hand, only about 25% of those who’ve had tests so far have been positive….

    I think isolating the vulnerable is for the birds, to be honest. The most vulnerable, those in care homes (not all of whom are elderly), are being left high and dry, along with those still prepared to care for them (who are some of the heroes of this crisis). Other people with ‘underlying health conditions’ live in households with the rest of us. What about the doctor or supermarket worker whose teenage daughter is a brittle asthmatic, or whose husband is immune suppressed?

    Oh and no 90 year old will be offered a ventilator. I doubt that would happen even in normal times. And Matthew, GPs are very busy trying to have difficult discussions with all their vulnerable patients about DNACPR, so as to save hospital resources for those with better chance. Frankly it’s bad enough sending workers to care for the vulnerable without PPE, they deserve utmost protection, not a waiver from treatment!!

    Anyway I’m off to enjoy some outside air. I really hope we don’t get a uniform national ban on outside exercise, driven by issues in urban areas….

    Good luck and stay safe.

  • 80 Matthew April 5, 2020, 11:41 am

    @vanguardfan – they deserve a humane final hours, the whole process of ventilation or resusitation is questionable for anyone, and it could be argued that choosing to work in these environments is a form of self neglect itself

  • 81 Duncurin April 5, 2020, 12:07 pm

    @Vanguardfan. Many thanks for your expert commentary.

    I’m not sure whether to be reassured by the BBC report that at my age (mid-sixties) the risk of dying of coronavirus appears to be little more than my chances of dying of something else.

  • 82 Aidan Williams April 5, 2020, 12:32 pm

    There are some great interactive charts here:


    What worries me is the fixation on the death rate. Anyone entering hospital with Covid19 is likely to suffer long term lung damage (and earlier death) even if they do leave hospital alive.

  • 83 Vanguardfan April 5, 2020, 12:52 pm

    @matthew, I think you’re just trolling now, and I’m not going to bite again.

    @aidan, again, no data yet on long term outcomes, but the last snippet I caught was more optimistic. Remember that lots of those hospitalised won’t need ventilation/intubation, just extra oxygen and other supportive care.

  • 84 Matthew April 5, 2020, 1:09 pm

    It’s hard to justify the logic of ‘brave’ staff risking their life for no personal gain, vs universal credit that isn’t miles off the wage of the lower paid staff, at some point they had to tell their spouses why theyre choosing to put the health of random unknowns above their own family, it’s not an easy one to answer, especially when the gap to universal credit is small.

    So to be brave, you have to accept the risk of death, like a soldier it’s what you sign up for. In the crunch of making hard decisions about who gets ‘help’ it might be a factor

  • 85 The Investor April 5, 2020, 2:18 pm

    @matthew – I don’t think it’s very helpful questioning the braveness of medical staff going into work and in some cases dying of a horrible disease in order to treat the wider population. Just as importantly I’m not sure it adds much to this conversation. They are doing what the nation is asking of them and I’m very grateful for that.

    You’ve expressed your view and further discussion is just going to upset people without adding much to the substance of the conversation. Further comments in this vein will therefore be deleted. Thanks!

  • 86 Matthew April 5, 2020, 2:54 pm

    Certainly no intention of causing upset, just please be aware that these workers are having to justify to their spouses – its not something we tend to think about, the domestic arguements these workers face

  • 87 marked April 5, 2020, 3:22 pm

    Going to throw this hand grenade in and see what we get as a response 🙂

    The Chancellor, when announcing the self employed package, lamented the lack of NI contributions the self employed pay in contrast to salaried employees.

    Full Disclosure: I’m an employee and a director, so not part of the self employed from a payment perspective.

    My view on adding more NI for the self employed – what a bloody cheek! He is linking NI with the package of measures to support the self employed and I don’t see how that works. The Tory government sometime ago under Cameron admitted NI and Tax are the same.

    So here’s the hand grenade (particularly for FIRE people)…..

    Why not flat rate tax at a new rate which includes NI. That means pensioners pay it too? Much fairer. Of course all those pensioners would then be paying 12% tax over £12500. The tax system is so complex now (and obviously more complex if you have kids, or earn > £100K) maybe this time to simplify, but don’t just pick on the self employed!

    Hand grenade deployed!

    Stay safe everyone!

  • 88 Marked April 5, 2020, 3:46 pm

    Edit to #87

    All those pensioners would be paying a further 12% over 9500 for next (this depending when you read) tax year.

  • 89 Naeclue April 5, 2020, 4:26 pm

    @Marked, I have never liked employee NI and think it creates a lot of distortions and unnecessary compexity, so I have a lot of sympathy with your suggestion. The difficulty is how we get from where we are now to the new system. A lot of people will only have received 20% tax relief on their pension contributions, so it would be a kick in the teeth to hit them for 32% on withdrawal. With the tax free PCLS though, such contributors would still be in profit if the basic rate was lifted to 25%.

    The other difficulty is that NI contributions are linked with the state pension, which is considered “earned” rather than a benefit by virtue of people making sufficient NI contributions. However, this is watered down to a degree by various NI credits people can claim and also by the fact that pension credit can increase many pensioner’s income to the basic level anyway.

    If the sums worked out I would not object to 25% basic rate and the abolition of employee NI, but I received 40+% tax relief on my pension contributions, so maybe it is easy for me to say 😉

    One thing I think could be done to claw additional tax back from us retirees would be to remove the tax free status of ISAs for those past state retirement age. Prior to state pension age, ISAs encourage saving. I cannot really see the justification for keeping the tax free status beyond state pension age though.

  • 90 Naeclue April 5, 2020, 4:37 pm

    @Vanguardfan, I had not thought about over 90s not being offered ventilators, but makes perfect sense of course. My relatives are very fit, still driving and not receiving care, although they did have a cleaner that they reluctantly have stopped coming. With family help, they could easily continue to be isolated as restrictions on others are lifted, but I know they would not want to cooperate with that. They are already fed up with the restrictions and have the attitude that if this virus doesn’t finish them off then something else probably will soon enough.

  • 91 Jonathan April 5, 2020, 4:54 pm

    @Marked, @Naeclue, I am another who suspects National Insurance will be the vehicle for overall increased taxation.

    Even though it is to all practical purposes an extension of general taxation, I think it will retain its separate label. As @Naeclue points out it acts as qualification for state pension: for that reason I personally think the threshold should actually be lower than now so that an employee on minimum wage working half time gained qualifying years. And with governments having at some point to deal with the issue of funding elderly care, keeping the label would make it more palatable as an additional tax on pensioners (probably at a different rate from employees).

    At the same time, the fact that it is part of general taxation ought at some point to mean rationalisation of rates for higher earners, with NI rates continuing upwards but the highest rates and some of the complicated taper rules removed.

    The issue of NI for self-employed is obviously a matter of contention, but not one I have ever got my head around.

    And not sure whether changing the tax benefits of ISAs wouldn’t create unintended consequences that neutralised any notional tax gain.

  • 92 Vanguardfan April 5, 2020, 5:02 pm

    @naeclue, just don’t mention it to them, ok?! We have an elderly relative who is similarly difficult to keep with the programme. It’s harder I think for those who live alone, and older people can be less flexible/adaptable generally. We are distant from him too so can’t even help with practical stuff like shopping (and online delivery has not been available).

    Re NI. On the face of it it seems a logical simplification to bring it together with income tax, but for all the various reasons others have pointed out, I don’t think it will happen.
    The state pension entitlement is a big issue to unpick, it’s only been 4 years since that was overhauled.
    More relevant possibly, what government is going to want to introduce what will look like a big hike in income tax rates? (And for pensioners, it will actually be a big hike. Politically that would be a hard sell).

  • 93 Neverland April 5, 2020, 6:21 pm

    Look at who the government went after last time to see who they will go after this time:

    – corporations (IR35, entrepreneurs relief, standard corporation tax rate, digital taxes)
    – income tax deductions (personal allowance and pension deductions limited by income/LTA reduction)
    – non-residential property owners (buy-to-let, foreigners)

    I would be amazed if this government actual raised inheritance tax or levied NI on pensioners, but I can’t see right now how they won’t have to raise the basic rate of income tax or NI

  • 94 old_eyes April 6, 2020, 8:37 am

    I came across this interesting paper from a couple of economists http://www.algorithmiceconomics.com/wp-content/uploads/2020/04/ending_lockdown.pdf. Paul Ormerod I have heard of, but not the other author.

    They argue for staged easing of the lockdown, and suggest that habits will have been changed to the extent that people will not immediately go back to previous habits across the population. Some caution about attending mass events, travelling less, fewer handshakes, kisses and hugs. All of which will help reduce the intensity of any second/third wave.

    Not convinced, but a well made argument.

    Oh and thank you to @ermine and @richard (72 & 73) for leaping to the defence of Imperial. As another alumnus I was going to comment, but you got there first 😉

  • 95 Snowman April 6, 2020, 9:02 am

    Interesting take on the health and economic perspective here


    Just to be clear I’m totally supportive of following the guidance to stay at home and protect the NHS by stopping it being overrun. But we do need to be able to think openly about the issues.

  • 96 The Investor April 6, 2020, 9:44 am

    @Snowman — Excellent piece, which makes many of the points I’ve alluded to from a far more informed perspective. Thanks for sharing.

  • 97 ZXSpectrum48k April 6, 2020, 11:17 am

    @Snowman. The piece is riddled with assumptions. First, the government support package is not costing £350bn. £330bn of that is loans, not handouts. He’s assuming a 100% default rate with zero recovery! That’s a moronic assumption.

    The actual level of direct non recourse “helicopter money” is highly debatable. Large components of the UK packages are not actual direct handouts, much will eventually come back via other channels such as taxation and deferred consumption. The overall fiscal cost is far far less than headline numbers suggest. This doesn’t necessarily require the tax rises people suggest, especially when they is so much room to increase Gilt issuance (given huge demand for Gilts).

    Moreover, he cannot simply assign 100% of any costs to the UK lockdown. The UK is economically it’s one of the most open economies and incredibly vulnerable to the global economy “catching a cold”. Some of these fiscal packages would have been required even in the absence of any UK action. Once China, Europe and the US are in lockdown, the marginal cost of the UK implementing a lockdown is small since all the major global players have already done this. It might be different if nobody went into lockdown.

    This is just another example of people trying to reduce really complex problem to a model than can be calculated on the back of a postage stamp.

  • 98 MrOptimistic April 6, 2020, 11:20 am

    A couple of people I know think they might have been infected on the basis I reckon of a spot of hayfever. Thing is, if you were infected and showed negligible symptoms, the probability must be that family members/close contacts must have shared your infection. If all these also showed no symptoms then what chance the infection actually happened? So I am doubtful that the elves have been out painlessly inoculating us, sadly.

    Although an alumnus of Imperial, albeit before they bolted on a medical school, wonder why we haven’t got a panel drawn from across the country’s expertise and more than one model ?

  • 99 The Investor April 6, 2020, 11:29 am


    This is just another example of people trying to reduce really complex problem to a model than can be calculated on the back of a postage stamp.

    I’m not sure this is qualitatively that different from what the universal lockdown until vaccine approach does (and the assumptions it is based on) in practice?

    At some level it’s a matter of pick your postage stamp. 😉

    @Snowman – A friend I sent the article to is refuting with the doctor’s maths. He replied to me: “I’m afraid I think his maths is fundamentally flawed as his use of average at death doesn’t take into account the asymmetric distribution of current ages against expected lifespan.”

    He also knocked together a quick spreadsheet that does this and suggests the cost per QALY is more like £60K, or double the NICE guidelines. Given the uncertainty band is vast as @ZXSpectrum notes, that seems more reasonable on the surface.

    @ZXSpectrum makes a fair point about loans. On the other hand neither the DR nor my friend’s numbers take into account the permanent loss of GDP from a deep recession / extended lockdown. Again we’re all pulling numbers out of the air, but particularly with a long indefinite lockdown until vaccine supported by so many, this will dwarf the direct costs of State support.

  • 100 The Investor April 6, 2020, 11:35 am

    @MrOptimistic — Yes, that is definitely a risk. Availability bias risks are rampant here (e.g. “What are the chances that BJ has got it and only a small proportion of the population hasn’t?” versus “What is the chance someone very much in the public eye would have it?” — clearly the latter is very likely).

    The obvious retort to the “plenty have had it” theory is why haven’t there been more widespread deaths in China, even given the extreme superiority of their lockdown/quarantine/etc? It is hard to believe it decimated Hubei province then got into the world while mostly missing the rest of China.

    Antibody testing of a whole population in a known area of high infection (e.g. one of the Lombardy cities) will be instructive I think. The higher the expected rate of infection the less we need to account for false positives. It may be a long time before such a test can give us reliable ‘immunity certificates’ as they’ve been dubbed, but it should quickly give a handle on whether 5-10% of the population caught the virus pre-lockdown versus say 10-30%.

    More ridiculously, why hasn’t Trump got it if it’s so widespread? Is it because he’s a known germophobe? 😉

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