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Crikey, so Sunaks announced:
– £1000 to the employer for bring a Furloughed employee back
– a 50% voucher (max £10) for all of us to pop out and eat
– VAT down to 5% on food in Restaurants, Cinema and attractions
– Removal of stamp duty up to £500,000
…all for limited times to kickstart the economy.
£1000*X employees won't stop a business going under...
£10 voucher won't get many more people eating out.
VAT cut is might stop a few restaurants going under but won't get more people out as the price we pay won't change.
Stamp Duty cut is pandering to the Tory base who don't like the idea of affordable housing...
So now Boris is telling us it's not safe to stay at home.
Not safe for the economy that is.
Here we ****ing go- Johnson urges Britons to go back into work.
Surely proof that life is one big Ponzi scheme.
All my life, governments have been urging me to be prudent, save for the future, for a house, for a rainy day for retirement. It's all bs. We need to go back into work- and why? So we can spend, spend, spend. The government really hates it when we save, despite what they tell us- unless we waste money the whole ****ing deck of cards will collapse.
Vinnyeh - google any definition of Capitalism. The big people need the little people to be earning and spend money to pay taxes. The more taxes the little people pay the bigger the big people get.
The only reason your allowed to be well of and encourage to spend your money in a shop is that more of it goes upward in an ad Infiniti’s circular motion.
The government really hates it when we save
Erm, yes as our economy is largely based on consumerism thats pretty obvious. Spending = more taxes.
More taxes = more/improved services such as the NHS.
Will be interesting to see how many few businesses will now encourage employees to stop WFH and return to office-based working.
A permanent transition away from WFH is bad news for coffee shops early morning and lunch time trade; that, in turn, leads to more business closures and job losses.
Also likely to put an end to 'just nipping out to pick something up' - translate to...a quick bit of light shopping.
Employers will be looking at their property costs; combined with the reliability of
home-working technology, requirements around work-based social distancing and providing
CV19-safe environments this will be a major driver in decisions about vacating office space.
That, in turn, will negatively impact on the commercial property sector.
All under-pinned by economic uncertainty and employment fears.
will negatively impact on the commercial property sector
The commercial property market is hugely financed by pensions companies - any 'readjustment' of property values could have a big impact on our future pensions as well as business rates revenues to your local councils to pay for services etc. Whilst the government is trying to avoid the term austerity, this is going to be austerity with knobs on.
dovebiker - how right you are.
I think most businesses will return to the office. Many people don't have a good reliable broadband connection yet, even mine which is 30 mbps on a good day and an average of 20 mbps has dipped during this so meetings freeze. People have found somewhere to work from home because this is a crisis, often using their own PCs etc. Permanent working from home means properly setting people up with works stations and hardware, it'll be expensive. Many people don't have the space or won't want a permanent reminder of work at home. One good thing about commuting is there is a hard break between work and home, home can be a space away from work for many. Blurring the lines will mess with the heads of a lot of people.
As for Boris, yes this blatant politics and nothing to do with covid controls, he wants the coffee shop economy back and people to feel like we've got covid done. Unfortunately we haven't, another month of decent controls maybe, but all the way through we've been too lax and eased off early, hence our death tollwhich no one can argue paints the UK in a good light.
stumpy - interesting counterpoint to my earlier post. Time will tell.
My SiL (lawyer) said it costs £60k pa for a desk in an office in London. Wfh has shown them they don't need it and are off to the midlands. A lot of her high net worth clients are very keen to get in on the PPE supplies, it seems that killings are being made.
Yeah working from home wont stick I agree. For many their work is their life despite what they may tell you otherwise. People are generally hard wired to need to be doing something in a crowd with others - you only have to look at mob behaviour to see how that works. Working solo at home suits some, but the majority will lose the plot fairly quickly after the absolute need subsides and want to return to the office.
I've said in other posts and other threads that the long terms affects of covid economically are going to be felt in the cities. City centres are completely dependent on the weekday working population spending money. Since i've been working from home I reckon I'm saving at least £500 a month. That's £500 that would be spent on coffees, lunches, snacks, beer, takeaways and whatever else I manage to spend money on. Even if only a minority of the office workers like me don't go back that's a huge drop in income that many city centre businesses won't be able to absorb. The result will be shuttered shops, pubs and cafes, lost jobs and all the associated decay that comes with it.
And that's just the impact from people not spending money in cities. Once office based businesses start scaling back their office space due to increased home-working (and they will given how much cheaper it is), it'll cause a collapse the commercial property sector. The result again will be more boarded up properties, social decay etc. Following all that then the residential property prices collapse because no one wants to live in a dead city where the homeless and drug dealers are the main street presence. It's a downward spiral, and will need massive intervention to prevent cities turning into decaying, crime-ridden ghost towns.
r. The result again will be more boarded up properties, social decay etc.
perhaps, but probably not in london. There's no reason a desk in london costs much more than a desk elsewhere (I guess the costs to hire servicing staff are slightly higher) other than demand. If demand drops right off (I suspect you're right on that), I think we would see a lot of significant losses in the commercial real estate world, but places that have enough underlying demand will just be able to drop prices until the bare running costs (ie power, support staff etc) aren't covered. Any outstanding loans & other sunk costs will just be wiped out by bankruptcies - the result would be the same number of people in the City, just their employers paying less per square foot for real estate
the result would be the same number of people in the City, just their employers paying less per square foot for real estate
If, for arguments sake, 30% of office workers continue working from home (and that's a massive underestimate I reckon), then that's obviously going to result in less people in the city. The fuel for a city centre is people, and the money they spend. Take that away, as covid inevitably will, and they will quickly decay, and that will cause a feedback loop where less people will go to them. I reckon we're about to see a massive transfer of economic activity away from city centres (especially outside London*) to the suburbs and surrounding towns.
*London is a special case on account of its size and the distribution of its population.
So 20% hit in April and less growth than hoped in May
June should see better as things opened up a bit more but things looking more U than V shaped although at this stage L shaped might not be impossible.
And Andy Haldane (the one Cummings wanted as BoE head,) assured us it'd be a quick bounce back
https://www.bbc.co.uk/news/business-53233705
Interesting chatting to family & colleagues, people keen on home insulation scheme & eating out vouchers, although they are delaying doing those now until the schemes start in September & August.
Maybe pre-anouncing them so far ahead will suppress activity until they are available
Since i’ve been working from home I reckon I’m saving at least £500 a month. That’s £500 that would be spent on coffees, lunches, snacks, beer, takeaways and whatever else I manage to spend money on.
So how long until people start opening up cafes and restaurants in your suburb? A lot of modern suburbs are under-provided for in this respect, that could change.
I can't see anyone being stupid enough to open a new cafe or restaurant - anywhere.
With daz's monthly saving he could, in one month, buy a decent quality coffee machine and have change for some artisinal coffee and sourdough.
Going to a cafe means mixing with other people - that's another disincentive.
Going to a cafe means mixing with other people – that’s another disincentive.
For some people, others really miss mixing with other people and have cited it as a reason for not wanting to work from home
I think we will see people taking a punt on local work hubs in towns and cities. Like WeWork but smaller.
locally we have a coffee & snack van thats started coming round
weve also got these robots delivering snacks as theyve just expanded to my area of MK
https://twitter.com/alexdsword/status/1239913522689011712
things are changing
Its my £500 a month comuter fair Im not missing- tho Im back in 3 days a week so its £240 for now
Ive been pretty good for a while at making my lunch & buying minimal snacks/drinks in work
Its made me reassess my priorities, If I could find a similar research job here in Milton Keynes Id be on it in a flash! London is great fun & for my line of research its excellent
The only science jobs in MK are at the new covid testing labs here & the salary is poor (even accounting for my £500 commuting bill & it includes 12 hr night shifts, which Im not keen on)
I can’t see anyone being stupid enough to open a new cafe or restaurant – anywhere.
Like anyone's going to start a business in this environment! This is where the intervention by government is required. Meal vouchers are not going to cut it.
I'd hate to work from home full time. I need that definition of closing the door at work and switching off (as much as you can switch off!).
Call for volunteers for redundancy announced at my work today. 15 of 95 staff to go for now, voluntary or not. Manufacturing company in o&g industry, a very familiar tale at the moment.
Been working split site and home since all this started and much prefer it.
new job in sept will be much the same but probably visits to different sites.
I like the mix but have no intention of getting a job where I have to be on a site full time.
Crikey, so Sunaks announced:
– £1000 to the employer for bring a Furloughed employee back
– a 50% voucher (max £10) for all of us to pop out and eat
– VAT down to 5% on food in Restaurants, Cinema and attractions
– Removal of stamp duty up to £500,000
…all for limited times to kickstart the economy.
£1000*X employees won’t stop a business going under…
£10 voucher won’t get many more people eating out.
VAT cut is might stop a few restaurants going under but won’t get more people out as the price we pay won’t change.
The above hasn't saved my job. Found out yesterday that my branch is going from mothballed to closed as of the end of October and won't be opening up in the meantime.
We were on the edge of it closing but had to wait and see whether our clients in the pub, restaurant and retail trade came back fast enough and in need of our services to make it worth keeping us open a little longer and praying for some sort of recovery. None of the payments, vouchers or VAT reduction has made any difference and with the furlough scheme winding down Head Office pulled the plug at the end of last week.
Don't know if this is the thread for redundancy talk or is there another one floating around? If not I might start one as I've never been through the process before so may need a few pointers.
In the retail space, Oliver Sweeney closing their 5 stores and moving to online only.
locally we have a coffee & snack van thats started coming round
Even I didn't think of that - brilliant!
A couple of articles pointing to a little pain to come.
About the UK https://www.bbc.co.uk/news/business-53402176
About the US - and that's just 3 banks https://www.bbc.co.uk/news/business-53407965
Also read some comments earlier by a senior bod from Canary Wharf Estates trying to talk up the return of office working; a sure sign that offices aren't filling up and WFH still dominates - confirmed by separate comments from Barclays and Goldman Sachs.
Must be having a significant impact on the retail units in the mall beneath the buildings - all very swish, high rents and totally dependant on all the buildings being rammed M-F.
Car parking at Canary Wharf is almost non-existent; consider HSBC's HQ - 10,000 employees, c150 car parking spaces.
Everyone uses the DLR or Jubilee line.
Morning coffee, lunch, shopping at waitrose, a little light retail therapy at lunchtime or after work; beer/wine/cocktails after work.
All will be affected by reduction office attendees and increased WFH.
Yep. People just don't seem to be really grappling with the idea that London just doesn't work with any sort of social distancing- it barely even works with tube carriages packed like sardine tins, there's no excess capacity anywhere to add safety because the drive for so long has been to ram people into London by any means as long as it can keep the bubble growing and to have more and more people commuting further and further on the same infrastructure. It's been pretty much running on an edge-of-failure basis for years and just sort of forgot
I urge anyome who is bothered about macro economics to read Stephanie Kelton's very timely 'The Deficit Myth'.
The constant barrage of public debt warnings coming from the establishment are just not founded on anything in realty.
Learn about the public 'debt' and (and what it is actually made up of) specifically how the money for Covid-19 has been fully funded by the BoE. Learn how bonds are effectively unnecessary to fund government spending.
We do not want a repeat of the lies that led to austerity.
The constraints are real resources, employment and inflation. Not money.
Even the Guardian was kind to Professor Kelton's book.
So Rone, TDLR: We won't run out of money because the Government then just asks the BoE to print more; but to admit we can print our own cash at will to fund everything we want destroys the political machinations of taxation and control.
but to admit we can print our own cash at will to fund everything we want destroys the political machinations of taxation and control.
You also risk inflation if you just print endless money.
There's also the matter of demand, if too many people chose to avoid shops / cafes etc over fear of CV-19 we'll struggle to kickstart the economy. I'm certainly in that category - I think do I want to go out for lunch and is it worth the (small risk), to which the answer is no, I'll just wait for it to die down some more.
People just don’t seem to be really grappling with the idea that London just doesn’t work with any sort of social distancing
Or any city which has a significant business district, which is most of them. We've constructed a model of employment and working (ie commuting into a city centre to attend an office) which is redundant in a pandemic world. As northwind said, it's a bubble, and it's about to burst with massive effects causing a deflationary downward spiral. There's only one way to mitigate that, which is to print money and use it to prop up those who are negatively impacted so we can smooth the transition to an economy which is not centred around city centres and population density. Instead we have discounts at restaurants and token tax cuts.
Boris and co either don't understand the scale of what's occuring (which I doubt), or they're too indecisive, incompetent, and/or bound by neo-liberal ideology to do anything about it. I might be something of a pessimist on the economic affects of covid, but it's seems pretty obvious to me we're about to be hit by a tsunami, and no one seems to be that concerned, which is weird.
I'm more than happy to eat out - I'll just have to sit outside or takeaway. Cardiff Council has commandeered the castle (which it owns anyway) and closed the street outside so that eateries can put seats outside. Nice idea.
Some intersting and gobsmacking graphs in this.. https://www.theguardian.com/business/2020/jul/16/number-of-uk-workers-on-company-payroll-falls-by-650000-amid-covid-19-crisis
And this is *with* the furlough scheme in place. Imagine what they will look like when its removed. The phrase 'slow motion car crash' has never been more apt.
@rone, you are absolutely right. Yet day after day we have the media, particularly the BBC, banging on about 'how are we going to pay for all this?'. They should give all of their reporters and presenters a grounding in economics and MMT. I think that George Osborne knew that he was lying when he compared our national situation to household budgeting, but it gave him a justification for austerity. It is to the media's eternal shame that he wasn't called out on it years ago.
All that, yes.
Even if you're not a believer in MMT- and imo, after the last few years if you're not you're an economic illiterate and shouldn't be anywhere near policy decisions, since it has fundamentally been used, and worked, just that they were very careful about how it was presented-the justification for austerity was entirely built on deception and misrepresentation regardless.
"We have to live within our means" was horseshit and every politician who ever said it, knew it. Living within your means is renting a tiny flat at a high price forever when you could get a mortgage for a house and pay less and end up owning the bloody house, because Borrowing Is Bad. It's not building that new factory that would make your company stronger and more profitable. It's losing your job because you can't afford a new car and you won't take out a loan. My own little side business was built with borrowing, I wasn't "living within my means" for those first couple of months and now it's paid that back at least a hundred times over, but Borrowing Is Bad and obviously I shouldn't have done it.
If you, as a government, can't get a better return on investment by borrowing at government rates than the cost, you're not fit to run a corner shop. But the point of all of this was never really to cut borrowing or spending- in fact a lot of austerity did no such thing. The point was to cut services. Austerity was just the universal excuse.
The pain will really hit early 2021. Furlough ends October, more redundancies announced, savings start to get eaten up paying the mortgage & bills, try to remortgage but you took the 3 month mortgage holiday so can’t get a good rate... then repossessions.
It’s not going to be pretty. Neo-liberal capitalism is going to ‘fail’ for the 2nd time in 12 years.
Also, let’s remortgage the house to pay for a holiday!
There's a lot of idiocy like this going on, hence my earlier comment about it being weird that people don't seem to be alarmed or bothered about the impending economic apocaplypse. I had a good example on a UK wide work call yesterday to update us on the completion of redundancies. In the following Q&A some idiot asked when the staff who were promoted in April were going to get their pay rises.
Newsnight tonight focusing on the very issue I've been going on about. The move to home-working hollowing out the city and town centre economy. Apparently Boris is desperate to get us all slogging back into the cities on crowded trains so we can spend our cash in the coffee shops, pubs and restaurants. Not going to happen. People like homeworking cos it's more flexible and they save loads by not spending money on frivolous crap. Businesses like it because as long as they can maintain productivity it will slash their overheads when the office leases expire.
I can't be the only one thinking why should I put myself at risk of catching covid and endure a miserable commute so I can spend 20-30% of my salary in the act of going to work? No thanks. I have sympathy for the jobs that will be lost in the hospitality sector, but that's the government's job to sort out.
daz - didn't see newsnight but my recent posts have also banged on about the same.
Patrick Vallance's comments to the select committee are a clear counterpoint to johnson's pathetic exhortations.
This government - and many before it - have deliberately moved the economy to be consumption-based so non-essential retail, coffee shops, fast food and chain restaurants have become fundamentally important.
Volume manufacturing has been seen as infra dig so little effort has been made to save and develop it; overalls and 7.30am start?
Most of us have been sucked into this consumption nirvana but enforced WFH has provided the opportunity to think carefully about what we want from life and the price we're prepared to pay.
Rammed offices, coffee/food to go, beer after work, a little light shopping at lunchtime - thanks but...no.
You're dead right to say that job losses in the hospitality sector is for gov to sort out; johnson and his clown circus own it.
But wait...end of Brexit transition will solve all our problems as we transform into an economic and trading powerhouse.
Rammed offices, coffee/food to go, beer after work, a little light shopping at lunchtime – thanks but…no.
Well I'll admit to missing the after work pub visits a little, but they're invariably massively negative whining sessions which are occasionally cathartic, but mostly depressing. I've been much happier in the past 4 months because I've not been surrounded by arseholes for the best part of the day. And I get paid more for the privelege and can work when it suits me, rather than when it suits my boss. Like now for instance, at 2am. They're gonna have to drag me back.
I have sympathy for the jobs that will be lost in the hospitality sector, but that’s the government’s job to sort out.
I absolutely get the bit about not eating out until this situation is under better control, I'm very nervous for me and my family to do that. I'm not quite so sure though about it being just up to the gov to sort out. We are a society and do we not owe something to our fellow workers in the sector to try and help them. Sometimes we have to put ourselves out a bit for the good of others - support your LBS, buy your veg from the greengrocer instead of the big supermarket....risk aside is this so much different?
It's not a position so to speak - I'm not telling you to, rather than I have a voice on each shoulder and wonder what others think?