Trading jobs face the axe
Close to where I live in south-west london a top City trader has set up his lockdown office in his vast suburban home with a bank of trading screens as his window on the world.
Across town at Canary Wharf just 10,000 workers have returned to the gleaming towers occupied by the elite of world banking which normally host up to 120,000 people.
They support not just wealth creation for the City but jobs in restaurants, supermarkets, upmarket fashion stores and outlets from gyms to dry cleaners.
Financial services are a powerhouse of the UK economy, employing 1.1m citizens, generating 10pc of national output and contributing £75.5bn annually to the exchequer. It is worrying that, as Britain emerges from the pandemic, the towers of Canary Wharf are nearly empty and that City traders and the sellers of financial services are still working from their own homes.
They seem blissfully unaware that if a return to work in the City is delayed until september there may be less to do.
energetic financial workers in singapore, Tokyo and on Wall street largely are back at work and nibbling away at potential income.
The concern must be that when City firms do decide to go back in it will trigger a big jobs cull. Britain’s biggest bank, HsBC, has reinstated a pre-pandemic decision to reduce its global headcount by 35,000.
A new survey by City recruiters Morgan McKinley shows the number of UK financial sector vacancies fell 60pc in the quarter ending in June and salary rises took a beating. Moreover, some 14,200 financial firms – 41pc – decided to use the furlough scheme at a cost so far of £246m to the taxpayer.
some 71,000 have been on furlough, or 7pc of the workforce, in the sector. A proportion of all furlough jobs likely will vanish.
In many ways the Government did its job too well by encouraging home working and discouraging use of public transport. The idea of furlough and the various Covid-19 corporate lending schemes was to limit the scarring to the economy.
every day away from the office in a dynamic and highly mobile sector will mean there is less revenue to be generated.
Fashion sense
FAsT fashion group Asos recognises that alleged supply chain abuses at rival Boohoo could give pause to consumers.
It acknowledges the online fashion industry’s problems in terms of abuse and modern slavery, and has done its best to clean up its own act. Reliance on leicester sweatshops has been cut back and Asos says it only works with seven audited factories.
That is encouraging. But Boohoo made many of the same claims of ethical compliance and audit before exploitative conditions were revealed.
During lockdown the online fashion outfits have been a godsend for consumers. It is gratifying that they have re-shored some manufacturing to the UK and created distribution jobs. But the public will need a great deal more assurance that the boom in low- cost, lockdown leisurewear has not been built on the misfortune of others.
Asos did not emerge totally unscathed from the pandemic, with the GMB union claiming in March that the company’s
Barnsley warehouse was neglecting social distancing. Chief executive Nick Beighton says that the problem has been dealt with. He also underlined the firm’s ethical underpinnings by paying back furlough funds.
After an initial lockdown dip Asos managed a 10pc lift in sales in the four months to June, taking in £1bn of revenues.
This was less than the market had pencilled in and well below the 45pc jump reported by Boohoo.
But maybe we shouldn’t go there.
Tax break
YoU have to feel some sympathy for courageous european competition commissioner Margrethe Vestager, who dared challenge tax avoidance by the silicon Valley giants.
Her £12bn assault on Apple failed to find favour in europe’s second- highest court. she wasn’t helped in that Ireland, the alleged victim of the tax avoidance, aligned itself with Apple and against the Commission.
Ireland may have had little choice, given one in ten jobs there have been created by its tax-friendly regime for tech giants.
The decision illustrates how difficult it is going to be for the organisation for economic and Co-operation and Development to ever reach an accord on a much-debated common digital levy. Pity!