Coronavirus  

Economic impact of big business lockdown

Economic impact of big business lockdown

We are at around week 12 of the coronavirus lockdown and for most people, their work life continues from home.

What is going on in this world of virus-induced faux fiscality?

There are mortgage payment holidays for six months (as recommended by the Financial Conduct Authority), credit card payment holidays, car finance payment holidays, state-sponsored paid furlough, self-employed income support, business grants, VAT breaks, schools still out possibly until September and more.

Meanwhile in this crisis, £30bn worth of debt has been created.

The problem of partners with different employers working from home, childcare or the lack of it, working hours, amateur haircuts and managing technology has made us all think about how we go forward.

Without wanting to sound preachy, can those who make decisions about returning to normal office life (by overcoming all those health and safety, PPE and distancing challenges) try and get everyone back to the day job in the spaces designed for that purpose as soon as possible?

The country needs ‘big companies’ all around the UK to help in getting the economy up and running again. And financial services companies should lead that march back.

In keeping bigger businesses’ staff working from home, the result is the destruction of thousands of smaller businesses who rely on the symbiotic support of bigger companies, supplying their income, in return for the services they provide that everyone has come to rely on over many years, to make their working life better. 

Like the Remora suckerfish that needs to attach itself to larger marine animals to survive, there are small and medium-sized enterprises that depend on big companies being back at their desks, working as usual in the cities they are based in.

Think of the shops, restaurants, coffee shops, health clubs, bars and support services – such as drivers and couriers in cities like London, Bristol, Birmingham, Manchester, Newcastle, Edinburgh and Glasgow. 

By getting big business back to the office, many ‘Remoras’ may stand a healthy chance of survival. 

A Covid-19 induced death of cities

Life is about risk. In fact, when you look at many parts of the financial services industry and the history of Lloyd’s of London, it was built on and maintained for risk protection in its myriad forms.

This is just another risk to overcome before the next one comes along.

Perhaps from the historical roots, inspiration could be drawn to ensure that protection extends to dealing with unintended consequential loss; in this case the unintended losses big business lockdown causes for others.

When the time for lessons learned arrives, I am sure that blame will be laid at the wrong targets for reputational preservation and, as a result, no lessons learned at all.

In late summer or early Autumn, the reality will hit for millions as the full economic impact of social distancing takes hold, and catching a virus will be the least of their worries.