Journal of the Plague Years XVII: The Brexit Pandemic

Comparison of the coronavirus vaccination rollouts in the UK and the EU tells us much about why Brexit happened. A flailing European leadership is behaving irrationally. And the de-coupling of the UK from the EU will now accelerate, writes Victor Hill.

Fulmination

I have been writing in these pages about Brexit – its implications, modalities, political and economic consequences – since 2015. And I have been penning my Journal of the Plague Years here for nearly 14 months – in fact since SARS-CoV-2 first reared its ugly head in Wuhan Province. But in the last month or so the two great issues of our time have conflated in a way that few might have predicted last year.

On 10 March, the President of the European Council, Charles Michel, accused the UK of blocking the export of the Oxford (AstraZeneca) vaccine to Europe. That was baldly denied. On Wednesday this week (24 March), the European Commission placed restrictions on the export of vaccines and their critical components from the EU to the United Kingdom and elsewhere. The export of vaccines will only be permitted in the light of the current status of the vaccination programme of the country in question – and given an appropriate level of reciprocity.

Then on Thursday, the virtual summit of European leaders drew back from a blockade; but AstraZeneca was told that it must catch up on its promised deliveries. An outright ban would have been unjustified in itself; but, coming as it does after a three-month campaign by the European political class to denigrate the AstraZeneca vaccine, it is political. I explained recently why, for Britain, the post-Brexit experience is one of living with churlish neighbours. Now the rudeness has turned to outright hostility. This will have economic consequences long after the coronavirus pandemic is a bad memory.

What is extraordinary from the British perspective is that the Europeans have repeatedly undermined their own unimpressive vaccination programme rollouts to spite the British. President Macron and Chancellor Merkel have both irresponsibly fanned vaccine hesitancy. According to a recent poll, 61 percent of French people consider the Oxford vaccine unsafe, and more than half of Germans think likewise.

So, not only has the European vaccination programme stalled, but Europeans are much more likely now to refuse vaccines than their British counterparts. This has consequences. The fear in Whitehall is that, while Britain is cautiously optimistic that the end to lockdowns (restrictions) is within sight, much of Europe faces the prospect of a deadly third wave. As Mr Johnson said on Tuesday (23 March), we must be vigilant to ensure that this new wave does not crash against our shores. There will be fewer British sunbathers on the beaches of Benidorm and Torremolinos this summer even than last.

There is no shortage of vaccines in Europe: the Europeans have stockpiled large quantities of the Oxford vaccine; but they are refusing to administer them. According to the European Centre for Disease Prevention and Control (ECDC) France and Germany have used only about half of the doses they have received from AstraZeneca. Every time there are reports, for example, of blood clots in Norway further to administration of the Oxford vaccine, the entire continental programme shudders to a halt. (And how many recipients of the Pfizer vaccine have experienced blood clots?)

Britain has the largest database on the Oxford vaccination outcomes. AstraZeneca has reported 15 cases of deep vein thrombosis and 22 cases of pulmonary embolism amongst 17 million vaccinees. That is lower than would ordinarily be expected to occur naturally across a similar population. Oxford’s Professor Sarah Gilbert and others are confident that the vaccine is both safe and effective. So is the EMA. But if the European scientific establishment is listening, it is not communicating effectively.

Hindsight

In the week that recorded the first anniversary of the first formal UK lockdown (23 March) there has been much discussion about how things might have been handled better. It is now a leftist trope that Mr Johnson procrastinated, and closed down all social interaction too late, with disastrous consequences. Professor Neil Fergusson of Imperial College has even produced another model which posits that 21,000 deaths could have been avoided if the lockdown had been imposed one week earlier, in line with esteemed Denmark. (Five million people; 15 million largely caged pigs. And now zero unfortunate mink.)

Yet statisticians at the Universities of Edinburgh and Lugano have finally got round to analysing Professor Fergusson’s original model which panicked the political class into following the science. They found that that model contained several highly questionable assumptions. (All models do, by the way.) One Cambridge epidemiologist, Dr Raghib Ali, argues that delaying the lockdown in the spring actually saved lives because march was a better time to catch Covid than December. North Dakota locked down quickly; South Dakota didn’t. And there was little statistical difference in Covid mortality.

What is now clear is that bureaucracies – of which the EU is a case study – favour extreme risk aversion; while dynamic, pro-market societies (the UK on a good day, and the USA) encourage reasoned risk-taking in both the public and private sectors. This has had a highly paradoxical result. Mr Johnson’s UK and Mr Trump’s America entered lockdowns kicking and screaming; the French were content that they needed a chit of paper to go jogging.

But come the vaccination endgame, the boot was on the other foot. The risk-takers sounded out big pharma early on, invested hard cash in promising candidates, and placed firm advance orders for the yet unproven elixirs. In contrast, the bureaucrats (the EU Commission) were only concerned to cover their backs, to haggle about dose prices, and refused to place firm orders until the boffins gave their reluctant imprimaturs. Britain has now vaccinated nearly 29 million people; France, a country of equivalent population, has vaccinated 6.6 million.

President Biden signed a law last month blocking the export of vaccine components from the US. Significantly, last Friday (19 March) Mr Biden achieved his goal of vaccinating 100 million Americans within his first 100 days – six weeks ahead of schedule. As of Thursday (25 March) 133 million Americans had been vaccinated and the President set a target of administering 200 million doses by his 100th day in office. Yet the FDA has still not approved the AstraZeneca vaccine and complained this week that the company had submitted incomplete and outdated data.

It has become fashionable to suggest that countries with women leaders have fared better during the pandemic than those ruled by men. (I made that conjunction myself last summer.) Ms Ardern, Frau Merkel (aka Mutti) and others were hailed as model crisis managers. But in the vaccination phase of the pandemic that assertion is more difficult to defend. New Zealand has not even begun its vaccination programme and will remain, for the foreseeable future, a fortress nation, secure behind its firmly closed borders. Risk-aversion carries a price when it extends to risk elimination.

Quarrels

The EU is threatening to re-direct supplies of vaccine inputs from the Halix BV factory in Leiden, the Netherlands, destined for the UK and elsewhere, to EU-only destinations. It is worth noting that in December last year, the former UK vaccine czar, Kate Bingham, despatched a taskforce to that plant to help upscale production by installing new bio-reactors – so Britain has a direct interest in this facility.

The European position was most forcefully articulated by Belgian MEP Phillippe Lamberts on BBC Radio 4’s The Today Programme on Wednesday. The real quarrel, he said, is not between the EU and the UK but between the EU and AstraZeneca – because it has reneged on its contractual obligations. In an extraordinary outburst, he accused AstraZeneca of having a track record of dishonesty. He said that AstraZeneca had bungled up their test data…So, everything points to a company that cannot be relied upon. He then affirmed Justin Webb’s clarification that the company had been deliberately dishonest. The EMA has already authorised three coronavirus vaccines – those produced by Pfizer-BioNTech, Moderna and AstraZeneca. All three had encountered production bottlenecks, which is natural. The first two firms, however, according to Mr Lamberts, had engaged with the EU constructively. But AstraZeneca had been not straightforward since they have delivered to other customers on schedule (i.e. the British government)^[i].

These are allegations that could be tested in a court of law, but which the EU has been hesitant to pursue by judicial means. According to Politico website, the EU waived its right to sue the company in the event of delivery delays. It all hinges on the nature of the contract that the EU signed with AstraZeneca back in August last year – more than three months after the UK government signed a deal and put cash on the table to finance development. The British position is that the contract with the UK government was a firm commitment, whereas the deal with the EU was on a best-efforts basis.

Whatever the legal reality, the EU’s main gripe is that AstraZeneca has given Britain priority over Europe in the fulfilment of its order of 400 million doses (even though its CEO, Pascal Soriot, is a Frenchman). What Brussels wants is for the UK government to release AstraZeneca from its commitments to supply the UK so that it can send more product to the EU. The Johnson government sees no reason why it should. So, despite what Mr Lamberts says, the quarrel is between the UK and the EU.

Brussels also wants the US to release 30 million AstraZeneca doses for export since the US regulator, the FDA, has still not approved the vaccine and these doses remain unused. There may yet be a major spat between Brussels and Washington.

Upsurge

In England and Wales, the number of excess deaths has fallen below its monthly five-year average. In contrast, the death curve in most European countries is rising. 19 EU states are reporting rising positive tests; 15 are reporting rising hospital admissions. Germany, once considered an outlier, so low was its mortality rate, is now touching Covid deaths of around 1,000 per million. The Czech Republic has the dubious distinction of having the highest Covid mortality rate in the world at 2,373 per million, well ahead of Belgium (1,962 per million). Even Poland, almost unscathed until recently, is now in a severe health crisis. President Macron refused to impose another lockdown in January despite the rapid spread of the British, South African and Brazilian variants – but rather went for a couvre-feu (curfew). Now, Paris has run out of ICU beds and new patients are being transported to the regions.

It is now clear that the European tourist industry – which accounts for over 12 percent of GDP in Spain – will take another hammer blow this summer. Italy is in another lockdown. Large parts of France, including Paris, entered severe lockdown this week. And Germany declared an Easter lockdown – though the country’s now near lame duck Bundeskanzler was then forced to cancel it. Reportedly, the Germans are believed to be considering buying the Sputnik-V vaccine from Russia, like the Hungarians.

Sclerosis

The precautionary principle (if you cannot be certain about the outcome, don’t do it) militates against good old Anglo-Saxon empiricism (see what works by trial-and-error – aka pragmatism). But it is embedded in the Treaty of Amsterdam (1999). The European Acquis, on which European economic life is founded, is inflexible – even when obtuse. (Ask the people of Northern Ireland.) I have also noted that, anecdotally, Remainer-Rejoiners in this country tend to be more risk-averse concerning the Oxford vaccine than Brexiteers, reflecting their attitude to risk.

Over the last 25 years, living standards in the US have accelerated away from those in Europe. Europe is a laggard in terms of AI and quantum computing. None of the world’s top 20 tech firms in terms of market cap is European. Even European agriculture is falling behind as a result of Europe’s ban on all GMO crops. Germany has shut down its nuclear power stations and (as I observed last week) is 25 percent dependent on carbon-belching coal.

But, even for those like this writer who have an instinctive affinity with European culture, something more worrying has emerged in the first quarter of 2021. The European elite, which was supposed to be anti-populist (populism or nativism is surely the monopoly of pesky anti-integrationists like Mr Farage and Madame Le Pen) has manipulated public opinion in perverse ways that would make even Jair Bolsonaro or Rodrigo Duterte blush. This was to avoid blame for a shameful performance. Frau von der Leyen has even threatened to infringe vaccine patent rights under the notorious Article 122 (most recently reformulated in the Treaty of Lisbon, 2009). That is a challenge to capitalism itself – why would pharmaceutical companies bother to invest in expensive R&D at all?

Since 01 January most British people (including most Scots) now understand that Europe is a foreign country. Things are done differently there. Not that we have any beef with the people of Europe, just its leadership. The Commission is now directed by a failed German politician who makes ex-Commission President Jean-Claude Juncker look like a statesman in comparison.

British people awaiting their first or second jab should not worry too much. There may be an embargo on exports of the Pfizer-BioNTech vaccine manufactured in Belgium – though that uses inputs made in Yorkshire. (Croda International(LON:CRDA) supplies critical fatty molecules (lipid nanoparticles) manufactured in Staithes). That is one reason why the Europeans held back on Thursday.

Home-grown supplies of the Oxford vaccine are still readily available. And supplies of the Novavax vaccine will soon be arriving from America. The Moderna vaccine will be produced in Switzerland. The Valneva vaccine will come into production in Darlington. The Serum Institute of India (SII), which is manufacturing the Oxford vaccine under license, was supposed to supply 10 million of the 100 million doses ordered by the UK government. But the Indian government’s temporary export moratorium will affect developing countries due to receive consignments under the Covax programme more than the UK. And the Vaccines Manufacture and Innovation Centre near Oxford will go live by the end of this year. This will have the capacity to produce tens of millions of jabs each year.

Ironically, the EU may be hit harder by any restrictions on vaccine exports than we will. And the UK is better positioned than the EU to cope with the long tail of Covid infections that will ensue, even if a third wave can be avoided. And better prepared for the next pandemic – which will most likely be wrought by another zoonotic pathogen.

The real point is that mutual trust – and respect – between the UK and the EU may not easily be regained. And trade flows will not recover with a partner that is consistently hostile – and increasingly irrationally so – because it is ideologically determined that Britain will not be allowed to make a success of Brexit.

This is not necessarily a disaster in the age of slowbalisation – the gradual retrenchment of hopelessly over-extended supply lines. Amongst the more surprising predictions I shall be offering shortly is that England will be self-sufficient in sparkling wine before mid-century. Great news for Kent and Sussex – bad news for Champagne.

But they will have brought it on themselves (with a tail wind from climate change).

^[i] The BBC tweeted the clip at: https://twitter.com/BBCr4today/status/1374667294132031489