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Tiptoeing back to work

As the government starts easing some restrictions to try and get people back to work the danger of a spike in new Covid-19 infections is very real. This means it will take some time.

As the government starts easing some restrictions to try and get people back to work the danger of a spike in new Covid-19 infections is very real. This means it will take some time.

John Redwood

in Features


On both sides of the Atlantic progress in getting back to work is slow and patchy. This is not going to be a sharp V-shaped recovery from the second-quarter plunge in employment and output.

One of the reasons is the growing tension between regional or state government and national government in many countries. In the US, President Trump abandoned his preference of organising a rapid and comprehensive return to work at federal level, partially because he was advised that the individual states have many of the powers needed to order lockdown and its end.

Health vs wealth

Mr Trump settled for placing the full onus on State Governors, expecting Democrat Governors to keep lockdown for longer and hoping that Republican Governors would get some benefit from letting people return to work earlier. Polling shows considerable support for a cautious approach so far, so it is not as helpful to him as he hoped.

In Germany Angela Merkel favoured a slow-and-careful path to relaxation, only to find several Lande (Federal State) governments want to limit the economic damage more quickly. She had to compromise, with more lifting of control than she wanted, balanced by an emergency brake to reinstate controls if the rate of cases and deaths leaps up again.

In the UK, Prime Minister Boris Johnson found the SNP leadership in Scotland wanted to avoid any relaxation – and the Labour leadership in Wales wanted only very limited changes. This has resulted in modest change throughout most of the UK, with the devolved Administrations beginning to differentiate their approaches. In Brazil, President Jair Bolsonaro is keen to lift controls but has encountered state government resistance.

Public support

The underlying reasons why removing controls is a slow flow from the scientific advice and the attitude of the public. The epidemiologists and some of the medical advisers understandably concentrate on controlling Covid-19, their immediate concern. The safest thing for them to recommend is continuing with tough controls to stop or severely reduce social contact to cut the spread of the disease. Once there is some success in this policy, they see the need to prevent a second wave or upsurge of the infection, were important controls to be relaxed too soon.

Governments understand there is an economic crisis, as well as a pandemic, and are being lobbied by some in healthcare worried that tackling the virus is stopping other treatments and medical consultations. Having committed so much to the fight against Covid-19, they are also worried that, if they start to tackle the other problems, they could lose their initial battle and throw away gains so far that were hard-won. It makes decisions difficult to agree within Cabinets and between governments.

Meanwhile, authorities worldwide have been so successful at portraying the virus as a uniquely deadly stealth killer that could take any of us to an early grave, that the majority of most populations are very afraid of the pandemic. This makes the public willing to put up with large controls over their lives, and to accept the price of safety is a lot of economic damage. This reinforces the advice to hunker down against the disease and to regard tackling the virus as the overriding priority. The public has also been cushioned from the immediate economic impact in many cases by furlough, state subsidy and cheap loan schemes which influences their thinking so far. This may change when the economic cost becomes more visible.

The UK’s document setting out a course to relaxation draws on recent research suggesting that the virus does not spread so easily out of doors. This gives more space to let people undertake recreation and leisure in the open air to keep fit – and allows businesses with an out of doors option more chance to meet social distancing rules.

Commuting is high risk

One of the biggest constraints on getting people back to work in offices or factories is the transport system. There is general agreement that the virus can spread easily in crowded trains or on buses. There is no simple way around this, so it means a longer period of more people working at home and more factories and offices having to accept much lower staff numbers coming in at regular times. Employers who need staff to travel are asked to stagger hours, expand parking facilities and make space available for bicycles.

The UK guidance makes clear that people should work from home where they can, and sets out a number of major restrictions on using offices that limit their utility to employers. Companies are advised to hold virtual meetings rather than physical meetings even for those in offices and to avoid the use of shared social and canteen facilities. There is detailed guidance on more entrances, fewer people in lifts, fewer desks and much more cleaning and hand washing.

We now learn that a factory or building site returning to work in a compliant way is unlikely, in the short term at least, to exceed half the output it used to have. Bentley, for example, have an order book to work through, but have decided they can at best manage half the previous output level in order to reduce the number of people in the factory and to create bigger gaps between people and processes. Restaurants and hotels in the UK have to wait at least until early July, and then face having to find ways to remodel their businesses drastically to allow proper social distancing. Those with outside areas where tables can be spread out have more scope to develop viable business plans but will also need ways of handling wet and cold weather.

All this reinforces our advice that there is going to be no early return to the old normal and continuing substantial reductions in cashflow and profitability of traditional businesses depending on social contacts for employees and with customers. Technology, protective clothing suppliers and hygiene and cleaning companies have good prospects.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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