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The Tories are trying to stymie the disruption that the economy so badly needs | Christine Berry | Opinion

The Tories are trying to stymie the disruption that the economy so badly needs | Christine Berry | Opinion


“The pandemic is a portal,” wrote Arundhati Roy back in April. It has since become commonplace to argue that coronavirus has created both a need and an opportunity for fundamental change. Though we might like to pretend otherwise, the kind of deep-seated changes we need to confront our ongoing crises would certainly be disruptive. Retiring dirty industries and growing clean ones is disruptive. Shifting from an economy that bids up land values to one that does socially useful things is disruptive. Redressing the imbalance between London and the rest of the country is disruptive.

The pandemic means that much of this disruption is now happening anyway. We are enduring the pain – so couldn’t this be an opportunity to gain?

A government with vision could accept that the economy is being reshaped by coronavirus, and design its support in a way that leans into some of those changes and softens the transition to a different future. Instead we are getting the worst of both worlds. The government is allowing coronavirus to wreak economic havoc and has accepted that job losses are inevitable. Figures now confirm that the UK is in the midst of the worst recession among G7 countries. Yet it has no vision beyond an attempt to preserve the pre-crisis economy. Billions of pounds – thousands of lives and livelihoods – will be wasted in the service of this doomed endeavour.

An obvious example is aviation. We know that we must fly less to avoid catastrophic climate change. We also know that this process will hit workers and that they must be supported through a just transition. We cannot have a rerun of the 1980s, when pit closures left coal miners on the scrap heap and hollowed out entire communities.

Now, with planes grounded and passenger numbers through the floor, the industry is in freefall. It may not return to pre-crisis levels for years, if ever. British Airways and easyJet are cutting thousands of jobs and eroding conditions for their remaining workers, despite taking advantage of the furlough scheme and a combined £900m in low-cost loans from the Bank of England. This is disaster capitalism in action.

The New Economics Foundation has called for a sector-wide crisis support plan that combines a limit on redundancies with a job reskilling programme, supporting workers to find new, green jobs. If ever there was a moment to bite this bullet, surely it is now. Yet the current strategy seems to be almost precisely the opposite: preserve as much of the airlines’ pre-crisis business models as possible and let workers pay the price.

Another case in point is the high street. Alarm is growing about the impact of prolonged home-working on the sandwich trade and, perhaps more to the point, on city-centre commercial property values. It was enough to prompt Boris Johnson to urge people back to the office despite his own chief medical officer saying we have “reached the limit” of lockdown easing.

The economic arguments for this fall apart under scrutiny. The Centre for Economic and Business Research claims that £2.3bn of spending has been “lost or displaced” from central London during lockdown. But there is a big difference between lost and displaced. Since humans need to eat, one assumes that the demand for lunch is still being met – but much of it by neighbourhood shops and cafes rather than Pret a Mangers in Canary Wharf.

Now that people have realised they can do their jobs from home and save hours of commuting time, this trend will almost certainly continue as a matter of choice rather than necessity. Is this really such a bad thing? It could breathe new life into local high streets and improve people’s wellbeing. London First insists that getting the capital moving again would boost the economy, since it accounts for a quarter of national growth. But this is a circular argument. The fact that our economy is so skewed towards central London is a problem. The fact that so much of it revolves around lucrative commercial property is a problem. Of course these things cannot be changed without disruption. But the disruption is happening anyway. To insist that we must go back to eating overpriced sandwiches at a desk is nothing more than special pleading from those who stand to lose out.

Instead, perhaps we should be asking whether the fall in commercial property values represents an opportunity to bring land back into public or community ownership and repurpose it. Could we reimagine town centres with fewer office blocks or coffee shops and more parks or outdoor markets? Unfortunately, the demand for “shovel-ready” projects for the government’s £900m Getting Building fund seems to be pushing local authorities in exactly the opposite direction. Millions are being sunk into city-centre office developments at precisely the time when the future of such developments is in doubt.

The pandemic isn’t only changing where we work but also how we work. Many businesses have responded to reduced demand by using the furlough scheme to bring workers back part-time. Millions of parents are still juggling work and childcare, and some have realised they would prefer to work part-time if they could afford it. A shorter working week has long been advocated as a way to spread both paid work and unpaid caring responsibilities more evenly. At a time when there is less work to go around – when huge labour market disruption is already happening – it could be a critical tool to prevent mass unemployment.

The thinktank Autonomy has proposed extending the furlough scheme to support part-time working on a longer-term basis – and using this to ease the transition towards a shorter working week. Germany already does this through the Kurzarbeit, or short-time working scheme. By persisting instead with plans to withdraw support, the government is not only risking mass unemployment and worse economic disruption – it is also failing to seize the opportunity to help us move towards a better relationship with work, time and care.

We are getting the disruption without the renewal, the pain without the gain. The pandemic is upending our lives and our economy: that much is a given. Whether we use this moment to build something better is a political choice.

Christine Berry is a researcher, writer and consultant


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