The main impediment to a swift recovery? It’s the Government
Do you remember when Boris was a gung-ho, go-getting, moraleboosting champion for Britain? A mere 13 months ago, our new Prime Minister gave a punchy, no-nonsense speech that was supposed to define his new way of doing things.
“The doubters, the doomsters, the gloomsters – they are going to get it wrong again,” Boris Johnson said. “The people who bet against Britain are going to lose their shirts because we are going to restore trust in our democracy and we are going to fulfil the repeated promises of parliament to the people and come out of the EU on October 31 – no ifs or buts.”
OK, the date was wrong. But a stonking majority meant the PM did “get Brexit done”. A man of action had his hand at the national tiller.
Yet that man is unrecognisable now, lost amid more U-turns than Spaghetti Junction, and a mad game of whack-amole to shut down entire cities, and our border with entire nations. This capricious administration is becoming the greatest threat to the economic recovery. Much of the populous is sick of it, and keen to return to life as normal.
Workers are up for it: more than 1.5m people got a job or moved jobs in the second quarter. That is fewer than the normal pace of about 1.75m, but remains remarkable given the lockdown recession. Bosses are keen: they have brought back most furloughed staff. Shoppers are enthusiastic: retail sales in June were back above pre-Covid levels.
The bounceback should become a boom. Household finances are in great shape as families funnelled spare dosh into savings or debt repayments through lockdown. Add in pent-up demand plus the supercharger of “Eat Out to Help Out” discounts, and we are on for a roaring summer. Infection levels, hospitalisations and deaths, thank goodness, are right down.
This should be the moment to relaunch Britain. Instead, the threat of local lockdowns hang over all our heads. Who wants to restock their business or launch new projects with that menace looming?
Investment intentions are at record lows, Bank of England surveys show. Companies loaded up with debt to survive lockdown, but instead of returning to growth now find restrictions returning.
The entire tourism industry takes regular punishment beatings in the form of overzealous quarantines.
Customers cannot make bookings with confidence. Workers face being locked at home for a fortnight on return from a previously safe destination, just as they need to get back to the coal face.
Even the discount dinners risk being undermined with a war on flab. Fun and spontaneity have been sucked out of town centres with non-stop warnings on public transport, one-way systems within shops and even on streets, plus enforced face masks to remove any hint of social enjoyment. Britons are doing their best, abandoning the paranoia of officialdom to start judging risks for themselves. After a week or two of strict mask adherence a glance around supermarkets shows growing numbers simply forget to cover up, because they are no longer fearful. Those indulging in a cut-price meal, or even escaping on holiday, find that a dose of normal, sociable life is a great cure for coronaphobia.
Johnson began well with serious steps to preserve the economy for a rapid recovery post-pandemic. Even the early days of cautious reopening were sensibly handled. But it has dissolved into a morass of conflicting guidelines and muddled politics. All direction is lost.
The best chance to restore order is for school to return smoothly, creating a natural moment to return to order.
Until that happens, the Government is effectively driving with one foot firmly on the accelerator and the other hard on the brake. That threatens what has the potential to be a rapid and remarkable recovery.
The $2 trillion prize
How did Apple double its market value, reaching $2 trillion (£1.5 trillion) this week just two years after becoming the first company to break into 13 figures?
One obvious answer is that tech companies were already fashionable before the pandemic became essential once physical contact was banned. Yet that is not what makes Apple special.
The real value lies in its appeal as a luxury brand. As Scott Galloway argued in his book The Four, this shift from being a second-tier electronics provider to a high-class style icon could give Apple an extremely long reign as a top-earning titan.
Being less clever than Galloway, I had long assumed Apple’s star would fade: after effectively inventing the entire market for MP3 players, smartphones and tablet computers, the raft of imitators (frequently equalling or excelling Apple’s quality, and undercutting its price) would destroy the leader.
Clearly the Wallace hedge fund would have lost a great deal of other people’s money backing this foolish hunch. I had reckoned without the power of conspicuous consumption.
Who wants a slick phone from an unknown brand, when you could show your taste, class and, crucially, spending power by buying an Apple model instead? This has powered premium brands with enormous margins throughout the ages, and the digital era is no different. The pandemic poses challenges to this model. Luckily for Apple, people need tech more than ever.
But for traditional premium products, the outlook is more bleak. What good is a luxury handbag if nobody gets to see it? If you are not out shopping, socialising or partying, you do not need an expensive watch or high-end make-up.
If you are not driving to work, nobody will see your flash sports car parked ostentatiously outside the office. A designer work dress or tailored suit serves no purpose if you are not going to meetings.
So how to show off effectively in the Covid era?
My money is on home renovations. A smarter property means the lucky few you invite around can admire your enormous spending power. High-end bookshelves will enhance your prestige on a Zoom call.
Exclusive holidays are another good bet. In a season when trips abroad are hard to come by, relaxing in luxury – and plastering social media with glitzy photos – will be the ultimate way to brag. Of course, you will be berated by the evermore virtuous puritans who harangue anyone who dares to break out of miserable isolation.
But public self-denial has always been a popular way of showing off – and it is cheaper, too.
Restaurants have benefited as customers make the most of the ‘Eat Out to Help Out’ scheme but attempts to get other sectors going have been thwarted by mixed messages from ministers