This was the week when the penny finally dropped. The prevalence of coronavirus may have collapsed across Britain, but we are not returning to our old, carefree ways for the foreseeable future. This will have immense, permanent consequences for our economy and way of life. Its most devastating impact will be on central London, which is facing an extinction-level event.
The Government’s mask-wearing edict shows that it remains terrified of a second wave, and doesn’t understand why, whether or when the virus will return. Its only solution remains a vaccine or a cure: prospects are promising, but it will be months at best before mass inoculations can begin.
It’s not just in Britain where neither the establishment nor the bulk of the public is prepared to live with the virus. California is shutting its restaurants again, Los Angeles and San Diego won’t be reopening schools, Melbourne is back in lockdown, Israel is in crisis, and masks will be mandatory in French public spaces.
For better or worse, neither West nor East will tolerate a resurgence in infections; they will hunker down again. There is apparently no other plan, no hope until we get a vaccine or cure. This über risk-averse approach will also apply to any major new virus: social distancing, masks and home-working are bound to be reintroduced each time a new infectious disease appears anywhere in the world, and even during significant flu seasons.
The implications will, in many cases, be catastrophic. The old order could have survived a once-in-a-generation government-subsidised hibernation, an extended Christmas holiday; it cannot cope with indefinite social distancing, and the threat of similar shocks every three to four years. We now face an excruciating period of destruction as malinvestment is purged, jobs are cut, debt is written off and resources are reallocated.
The private sector is already adjusting: many will delay the return to offices planned for September, regardless of official advice. Why move workers back if this will need to be reversed in November or December in the event of a second wave? The longer workers stay at home, the less likely they are ever to come back fully. I don’t know a single employer who believes they will revert to previous levels of office working. The interaction of the virus and technology will create a new class divide in Britain: those who can work from home, and those who can’t.
Until now, the most successful geographies were those that attracted members of the former category. Yet this is now a recipe for disaster: London’s economic and political business model has suddenly been rendered unsustainable, with office districts turned into ghost towns. The Greater London Authority, and Transport for London, its main asset, are, in effect, bankrupt, with nearly empty Tubes meaning fare revenues are in freefall, reliant on handouts from the Government. Devolution is over, de facto if not de jure. Sadiq Khan has accelerated his own demise by hyping the risks of public transport, but his likely reelection next year will mean nothing. His power – other than to infuriate his Tory minority in London by tolerating graffiti, hiking the congestion fee, shutting roads and cutting the police – has evaporated.
The private sector, for its part, is facing gargantuan structural losses: the economics of offices and retail is predicated on mass commuting and tourism. The former won’t fully come back; the latter will take a year or two. The arts, luxury, fashion, transport, hospitality, restaurant and many service industries face decimation. It’s a full-on biotic crisis: London’s economic ecosystem is suffering an immense decline in diversity. Lower-paid jobs, in particular, are being culled; the population could fall, with tens of thousands returning to Europe.