It surely isn’t a controversial proposition to predict that the current crisis might have lasting consequences on the way we live and work. It may be that this period of strife, restriction and reflection pushes us further and faster down some of the tracks which we are already on. It could prove to be one of the most important chapters in modern history, shifting our norms in favour of some wider and deeper changes.
This week’s observations stem from the world outlined by the media and my experiences of living and working in south Manchester. Inevitably, these observations come with an eye on financial implications not because this is a tax blog nor because I am an accountant but because, like it or not, we know how fundamental financial matters are to managing in life.
• Healthcare provision
Government, politics and economics are, to a large degree, about compromise and managing limited resources between competing needs and wishes. Balancing an adequate allocation of public money on health with a suitable level of tax burden on the population is a near impossible task. But this crisis might significantly affect that perpetual debate. Last Thursday I witnessed every resident in my street applauding the health workers who are battling to keep thousands of unfortunate citizens from an untimely end. It was the most compelling evidence that, today, we realise the value of healthcare. “Your health is your wealth” goes the saying, and few would contradict that right now.We have to wonder what this virus might mean for contingency provisions going forward. If we do find that we come to suffer a similar experience to that of Italy, we must expect the UK to reassess its provision needs going forward. That will have to be paid for, but perhaps the country will accept that more willingly than before?
• The planet
If you saw the report that came out of Venice recently, you’ll know that they are seeing the cleanest canals in decades and breathing the purest air, with sightings of dolphins where there have been none in years. It has doubtless taken a crisis and a forced curtailment of economic activity to show us what we thought was no longer possible.I wonder whether the population there might insist on holding on to this silver lining after its extreme suffering. Might this small illustration prove to be a catalyst for more global urgency in our race to stabilise the planet’s sustainability? If so, what might this mean for our continued retention of carbon-emitting fuels. And what about our seemingly unremitting thirst for increased GDP at every quarter end?
• Community spirit
At the national level we read of over 700,000 volunteers in the UK having signed up to assist the health service and our nation’s crisis efforts. At the micro level, my street now boasts an active WhatsApp group and is planning a street party for when it becomes safe to re-emerge. After nearly 18 years, I might actually meet some of the neighbours who live more than a door or two away!Having acknowledged the togetherness we feel today, and the common purpose we share, our street party might possibly look and feel just a fraction more cautious than those which took place across the UK after WWII. It seems likely that the social distancing we are practising so diligently today will remain in our consciousness even after the scientists have found an antidote and vaccine for COVID19.
One thing we are now all taking seriously and practising in earnest is homeworking. We always knew it was possible to do a large amount of our work from home but it seems, for many, we needed to be thrown in at the deep end – to be forced to invest and properly learn the techniques which enable us to be as productive from home as we were in the office.Within a fortnight, the reality of homeworking has become a recurring conversation between our firm and its SME clients and contacts; we are all already thinking about how we might work, going forward, and where we will need to be.
It begs the question whether, in future, “rush hour” might be significantly eased, making room for more effective public transport on which citizens talk to each other (albeit from a suitable distance). But what will become of offices and other work spaces which could become surplus? This might be a sobering thought for commercial real estate investors, unless it opens up space for the new homes which are currently in such short supply.
• Government debt
Fair play to the government for “putting its arm around every single citizen and business”. I certainly didn’t expect the magnitude of the response taking the form of grants for “furloughed” employees and lost self-employed profits, business interruption loans, deferred VAT and self-assessment payments, etc.The impact on the public sector deficit will be enormous and we will all have to recognise that there will be consequences; the Chancellor recently inferred as much in one of his addresses announcing yet more initiatives. The hope, of course, is that this emergency action will keep our economic system from breaking down. Afterwards we can have a national debate about how best (and how quickly) we put the public sector back onto a footing which will stabilise the macro-economic position. It seems likely that increased taxation, short term or otherwise, will become a key feature in any strategy to recover from this – again, maybe the electorate will understand and accept.
• Business, social enterprise and employee participation
How deep and radical some of these new emphases will be in a post-Coronavirus Britain might depend on how deep and lengthy this period of crisis, and convalescence afterwards, might turn out to be. China’s apparent return to work seems to suggest it could be shorter than many experts have suggested, but it is probably far too early to tell.
Meanwhile our firm is vigorously playing its part in advising clients on what the government’s initiatives mean and how to access them to the full. We are here to provide a local arm of assistance and support and to weather the challenges alongside our clients. Our clients are encouraged to get in touch to outline their concerns and to discuss potential solutions where desirable. We will be a constant for you throughout the coming weeks and months.