Chancellor says permanent working from home culture not inevitable

Chancellor Rishi Sunak told City AM podcast that home working would not be the 'new normal' in the post-Covid world and that workers will want to return to city centres.

Saying human beings are 'social animals', Sunak told the City View podcast that people will return to restaurants, theatres and offices craving contact with friends and work colleagues. He also talked of the 'spark of ideas' that happens during such interactions.

The Chancellor's words came in response to major employers including Standard Chartered, Lloyds Banking Group and HSBC announcing that they were making a more permanent move towards home working for the majority of their staff.

Engines of growth

Sunak also opined that human interaction makes lives richer and fuels our cities to become engines of economic growth. He said that on a personal level he had found it moving to walk around the Square Mile and Canary Wharf, the great drivers of London's financial markets, and find them empty.

The Chancellor said it was 'sad' to walk around London and see the way life had just disappeared and with it the buzz, creativity and vitality. However, he remained convinced that it would all come back and that that would be a good thing for the economy and productivity.

He was also 'incredibly sad' that, despite the efforts of the Treasury to deliver full scale wage and job support schemes and the billions spent on furlough and business loans, it was not possible to save every business and every job.

Remote work after the pandemic

Latest research shows that as much as one fifth of workers in developed economies can work from home and many will continue to do so in the post-Covid world.

In a McKinsey survey of 800 corporate executives worldwide, 38% expected workers to continue with 1 or 2 days of homeworking after the pandemic.

As the Chancellor points out, that has an important implication for urban economies and a direct impact on restaurants, shops and services. This hybrid form of working will also reverse the trend of highly paid workers flocking to urban centres and risks accentuating inequalities for low skilled and women workers.

Work from home

However, with Chief Medical Officer Chris Witty warning that the pandemic is about to enter its most serious phase in the UK, the government advice is to continue to work from home where possible.

The list of exempted jobs and professions has been expanded in the third lockdown and now includes estate agents, dentists and elite sportspeople who can't pursue employment without being face to face.

Restrictions are currently expected to be in place until March or April but much will depend on the acceleration of the Covid vaccination programme. With 24 hour centres about to come on stream and a pledge to vaccinate the entire adult population of the UK, with at least one dose of the vaccine by September the return to work could come sooner rather than later.

Whether a broader return to the office will happen remains to be seen.