Allister Heath has written a devastating piece for the Daily Telegraph in which he depicts the future for London thanks to CV-19, the Lockdown and the mask edict by the government. Title and subtitle already describe the looming disaster:

“The death of the commuter is an extinction-level event for London – The capital is bankrupt, its business model destroyed by shifts in behaviour that may never now be reversed” (paywalled link)

It is about the economy and how the Lockdown and the Semi-Lockdown have and will affect the ‘business model London’:

“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.” (paywalled link)

He remarks that the attitude of governments across the globe is the same: they will do everything to avoid a 2nd wave, even unto making mask-wearing mandatory, while hoping for a vaccine and then warns:

“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.” (paywalled link)

Describing the economic outlook which is as grim as are the various government measures proposed in expectation of that ‘2nd wave’, being fearful at the same time of some new pandemic, he takes a close, hard look at Khan’s London:

“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.” (paywalled link)

Mr Heath next lists more particulars pertaining to London:

“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.” (paywalled link)

After a brief look back on past economic events since the 1980s, mostly benefiting London, Mr Heath refers to an analysis which supports his arguments for that economic  ‘extinction level event’ coming to London:

“A few years ago, Bridget Rosewell, an economist, revealed how the capital lost 1 million, mostly manufacturing, jobs on radial routes in the suburbs over three decades and created 1 million, mostly high-value-added services jobs in central London. Suburban factories and offices became homes. Economic activity became hyper-concentrated in the centre. This model was seen globally as a triumph of renewal. There were risks: it was contingent on staving off urban decay, avoiding terrorism, making sure taxes were not hiked, ongoing vast subsidies to public transport, continued globalisation, containing property prices – and yes, avoiding pandemics. 

As to the downsides: the rest of the UK failed to pull off its own transition, becoming addicted to transfers from London; and the capital’s culture shifted corrosively, becoming the epicentre of Remainia, Corbynite attitudes and intolerant illiberalism.” (paywalled link)

It is indeed a ‘moment of extreme danger’ for the economy – but in conclusion Mr Heath offers a solution, describing measures government ought to take or at least contemplate:

“This is a moment of extreme danger for the economy, which faces a productivity shock if agglomeration effects cannot be replicated when workers scatter widely, but there is a way out. Boris Johnson must not seek to prop up bankrupt central London investors. Instead, he must allow the market to work, and encourage Tory heartlands – suburbia, exurbia and smaller cities – to hoover up London refugees, workers who no longer need to commute daily. New, more spacious, houses will need to be built, not just tiny city-centre flats, as well as a new generation of suburban or out-of-town flexible offices. We will need electric cars, not HS2.

It once seemed that levelling up was about making the rest of the country more like London – now, it is the opposite. Britain’s only hope is a suburban renaissance.” (paywalled link)

I’m not sure I wholly agree with those ‘solutions’ offered by Mr Heath. It is all a bit Home Counties centred. We certainly don’t need HS2, but nor do we need ‘electric cars’. I also doubt those Home Counties will ‘hoover up workers’ – they won’t allow industries to pollute their nice new shire homes. 

I do agree with his general analysis but would warn that an exodus of European workers – working  in offices or in ‘Pret-a-Manger’ – is not desirable. We know who will fill the vacuum thus created. A Londonistan ruled by gangs having been taken over thanks to ‘white flight’, is a horror not to be wished for. The example of Detroit or a look at how Washington DC is divided between government and admin buildings and offices, surrounded by impoverished black communities, should be a warning.
All in all: a good and scary analysis – but the solutions leave much to be desired.


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