My understanding is that if DVLA is processing your application and you meet the criteria for section 88, then you can drive without having a physical licence. However, it would appear that paper applications are being processed much slower because the staff at DVLA couldn't handle them during the coronavirus lockdown and now they're being processed slowly due to social distancing measures at the Swansea office. If they don't have you application, they can't process it - so, in theory, you couldn't drive under S88. However, if you have evidence of application then you should be fine to drive.

We asked the DVLA directly what the situation was and they said this:

"Where a driver has submitted a relevant application and documentation to renew their driving licence to the DVLA, they may still be able to continue driving while they are waiting for their application to be processed, providing they meet the criteria for doing so. This may apply whether the driver held a photocard driving licence or an older style paper licence. Further information on this is available on www.gov.uk/government/publications/inf1886-can-i-d...t;

It's also worth noting that if your photocard driving licence or your entitlement to drive expires between 1 February 2020 and 31 August 2020, you now have a seven-month extension from the date of expiry: www.honestjohn.co.uk/news/driving-1/2020-07/dvla-u.../