Full disclosure – the author has been working from home since mid-March.
With increasing pressure being placed upon office workers to return to their town and city centre offices, in order to save the economy, little attention seems to have been paid to the flip side of having hundreds of thousands of workers operating from their homes. The imminent death of Pret, and of small businesses in the urban cores, is being waved at us as a means of provoking us to go back to our daily commute.
Yet, yesterday, evidence emerged that, whilst there is undoubtedly damage occurring, there have been some benefits too. Setting aside some of the personal benefits – money saved on commuting (in my case, the equivalent of 9% of my gross salary), better work/life balance, greater flexibility in terms of working hours – independent retailers are reporting improved turnover, new customers and are hesitantly optimistic about their prospects if the change of working practices sticks.
There is plenty of evidence too that households are using the savings generated to pay off debt, particularly credit card debt, thus improving long term financial resilience. Bad news for the financial sector, perhaps, but a start on rebalancing the economy away from its reliance on the financial sector.
And yes, there has been a downside for those employed in the service and retail sectors. Ironically though, most of those staff are increasingly having to commute into town and city centres to serve those office workers who are… commuting into town and city centres. If both are staying put, there should be increasing opportunities for service sector employment in smaller towns and suburbs. People will still need to have their hair cut, or buy a sandwich, or buy clothes.
If people don’t have to work in towns and cities, pressure on housing stock is likely to reduce, thus taking some of the heat out of house prices. There are plenty of towns and rural areas that suddenly become much more viable and attractive to people looking for a home, where house prices are relatively affordable, and an influx of younger office workers would boost the local economy.
The impact on our transport system might be positive too. Without the sort of peak travel we have now, carbon emissions would be reduced, public transport could operate with less vehicles and rolling stock than it does currently.
The problem we have is, how do we manage the transition? It may be that selective targeting of support is necessary going forward, although the scope to open new businesses in small towns is probably quite good, if the number of empty shop fronts is anything to go by. Business rates and rents are undoubtedly cheaper in, say Stowmarket, than they are in inner London, thus prices could be lowered whilst maintaining, or possibly even increasing, profit levels.
As liberals, we have argued that the economy is unbalanced, that it is too dependent on particular sectors and parts of the country in comparison with more successful economies. Is working from home a chance to rebalance?
Mark Valladares is the Monday Editor of Liberal Democrat Voice, and has worked in an office since 1986.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
The Joy of Six 1530
The shame of Liverpool Labour councillors taking their allowances but not turning up to do the work
Should Labour reconsider the Brexit red lines?
Raising a flap about letterboxes
Restrained
Chase Park fair photos
Rob Heale
Kira Collins
Nonconformistradical
Tom Bailey
Katharine Pindar
34 Comments
Have you forgotten? The real issue of working from home is the stranded assets left behind in those huge empty offices. And the financiers don’t like stranded, valueless assets.
We have a double challenge
1. Make working from home convenient and efficient – space, equipment and communication
2. Somehow reduce big office asset values and build up home asset values.
Now how to do that?
I have been working at home for around 24 years now, and I totally agree with all the points Mark makes.
In addition the carbon emissions are greatly reduced by people not having to travel to an office. Essential journeys become more local, so greener trnasport can be used: electric cars, bicycles, walking.
In the longer term the design of housing needs to be considered – how it enables people to work from home. This must be coupled with reviving local centres to allow people to meet their neighbours and take part in local activities – working at home can be isolating.
Good and reliable fast broadband is also obviously essential.
There is one key to managing the transition to more local working, which will take time. Meanwhile, sandwich-makers (etc) will be unemployed. What needs to change is our disgracefully low rate of unemployment pay. We need to be able to give real support to people undergoing the transition to more local working, and the current rate of unemployment benefit does not go anywhere in meeting that need. Assistance with start-up finance also needs to be available.
Its hardly surprising that our Government & their tame Media should equate Change with Disaster but as usual they are failing to think things through. If they are serious about getting Commuters back to their Offices then it will have to be on crowded Buses & Trains; the Road Network is already near its maximum capacity during the Peaks – it cant take Millions more Cars.
The transition is going to be hard & lots of Firms will go bust but there are some relatively easy things Government can do to help like making it much easier to claim Benefits & raising them to more realistic levels – theres a Libdem Campaign theme waiting for us to use.
There will be lots of empty Offices but they could be converted to Housing – we could go back to an earlier models of City Life where people actually live in the Centres.
I did wonder why there was such pressure coming from the Government to go into offices untill someone on the radio pointed out that people weren’t picking up a copy of their daily newspaper if they didn’t commute in to work!!!
Figures from BBC news indicate that people are on average over 10% more productive working from home.
For a while I did a daily commute of over an hour in each direction and it was knackering! And you spend the first hour in the office recovering! And not much happens on a Friday in an office.
It’s clear that post Covid home working will rise from 10% pre-covid to well above 30%.
And there will be more “semi hone” work.
There’s already strong demand for office space in smaller towns and people will work between those remotely rather than going into bigger cities
And people will go into the office 2 or 3 days a week and we urgently need a flexible “carnet style” season ticket to enable that – if the government really want to help
As it is takeaway coffee and sandwiches are one of life’s biggest rip-offs at say a fiver against under 20p if I pop into the kitchen and make them myself!
One of my relatives works for the govn, one of their revenue generating rather than spending divisions, he has been working from home (the computer logs his time but it is quite flexible in nature) and the bosses have now decided to abandon an impending expansion of the office space and keep people working remotely. This should actually mean more people working for the department but less non-salary expenses so a win-win at a time of ever increasing unemployment. Yes, devastating for caterers and the like but they will just have to use their energy and brains to come up with a new angle.
Locally, a lot of shops have closed up (after getting their free 10 or 25k grant from the govn!) but it is good to see that many of the shops have already been filled with new businesses, different in nature to the ones that have closed. Never underestimate the flexibility of the self-employed and small businesses nor the powerful forces of the market.
An exciting policy for the new leadership would be how to meld high tech makers with the high street environment, technology of 3D printing taking us full circle back to a time when low scale manufacturing was possible in small spaces. A radical reform of the tax system to take out costs such as business rates and employer’s NI in favour of a transaction tax might be a good starting point, expanded further once bedded in to get rid of council tax and VAT (and even the TV licence). Town centres full of “shophouses” with the owners/renters living upstairs and running a creative business downstairs would give a much needed twist to High Streets that are often interchangeable in terms of shopping experiences.
Technology can enable this going forward but it needs to be encouraged by a much less confiscatory tax system and high overheads at the lower levels of start-ups (the other side is less need for govn handouts).
@ Mark V,
Yes, it is certainly better for the economy, and the environment, for everyone to work as close to home as possible. The effort of long commutes is also wasted effort. There’s less traffic on the roads and less pressure our public transport infrastructure. Workers will use the money previously spent on petrol and train fares on something else. Our economy isn’t fundamentally about supporting the sales of Mocha Coffee and packaged sandwiches to office workers.
“There is plenty of evidence too that households are using the savings generated to pay off debt, particularly credit card debt, thus improving long term financial resilience.”
Yes. But this will only be true if Governments understand what’s happening in the wider economy. The same thing happened after the 2008 GFC. There was a tendency in the Private Domestic Sector, then, to pay off debt too. In other words the PDS was running a surplus. As were our overseas trading partners. So, by the rules of sectoral balances the Govt had to be in significant and increased deficit.
The same thing is happening again. ie increased govt deficits and debts. If the Govt reacts in the same way as the Coalition government reacted, and introduce economic austerity in an attempt to reduce their deficits and debts, we’ll be in big trouble.
But I’m moderately hopeful that won’t happen.
An interesting aspect of re-balancing is examining the carbon impact of the types of transport that are being used less. Electric rail has a fairly low impact (classic performance from Grayling, Scapps, shame about the North). Aviation has a huge impact, either absolute or per passenger, but aviation has well funded lobbyists even though some of it was headed for zombie status before Covid.
So what are we to make about calls to help aviation? Can Richard Branson not make it work without public funds? What about parts of the UK that are connected by air? Subsidise a universal minimum service, or revert to rail and road? It looks like someone is going to take a haircut, and the residual is socialised. If anyone thinks that private aviation is going to be safe on very low margins, watch the Manx2 episode of Air Crash Investigation.
Time for a very clear policy response, with no U-turns.
For most of this we should be letting the market decide. What the govt should do is increase unemployment benefit/ UC to a reasonable low living level to deal with the transition. Economics 101 says that in a recession the stabilisers (like unemployment benefit) stop the economy falling too low. Local shared office space? Pret-alike sandwich delivery? We can’t seriously be trying to run an economy by making sandwiches for each other??
Quite a lot of commuter traffic is far too over-crowded to be safe when there is a need to contain CoVid-19.
In any case, the barrier to working from home has been overcome, work patterns have changed for good. It is a headache for the government since so much of the economy has been based on a kind of economic perpetual motion machine – then there is January when the real Brexit begins.
I think it’s a good idea to convert empty offices into homes in city centres, in fact this is already happening, some of it in a slip shod way. If there aren’t any we certainly need building regs to establish standards for this. Businesses like Pret would need to start catering for residents rather than commuters, but I would’ve thought that was possible if these areas were made more attractive for residents to relax in during the evening.
One obvious problem is the need to have space for business meetings because I think people will still need to meet up, for example, where team building is an essential part of work. Perhaps a way of sharing office space could be worked out?
Lots of ideas flying around. Who did not join Policylab!? Now that the party leadership election has ended we should start a campaign to get it running all the time .
Maybe this is a good opportunity to review the need for Parliament to actually sit at Westminster in the future.
With the projected cost of repairs to the Palace of Westminster at present in region of £5billion, which probable means nearer to £10billion by the time the work has been completed and the need to find a “home” for the MPs or Lords in the meantime, during the many years of repairs, maybe everyone should take this opportunity of working in a completely new way.
MPs have a constituency office where much of the Westminster office work would be done and many could also work from home, instead of commuting to London.
From past experience, much of the work done in London could actually be done in the constituency or remotely. Most of the time, very few MPs are actually in the Commons chamber but the commute to London is the normal routine. During recess and for many weeks of the year the Government functions perfectly well without any MPs of Lords going into Westminster and the essential face to face meetings could be arranged elsewhere at a convenient time. Presumably much the same arrangement could work for the Lords if necessary.
The travel budget and environmental impact of that travel for everyone would be slashed, as would the time wasted commuting, which could be much more productively used.
Admittedly, there would be no socialising and time spent in the many bars or dining rooms, and it would not be as enjoyable as it has been, but maybe now it’s time for a rethink and for this to become part of the plan to reform the way we are governed.
i think from a party in favour of the market, this meddling by the government in how organisations do what they like, with not only absolutely no actual harm by those organisations, odd.
Some perceive a few retailers in city centres, all chains, or restaurants, or sandwich bars, are only suffering. What about all those in small towns, villages, and suburban high streets, or squares.
I agree with Martin, its not safe to load transport networks, with closer proximity between travellers.
I agree with Sue on the new ways to be sought.
As Liberals we ought to recognise both that the employer needs autonomy from government dictat, as does the employee need human rights. And that both are less important on some aspects, than the importance of personal and public responsibility in a crisis.
This regular , get back to normal, things are nearer normal, inconsistency from the Tories and even labour, ignores that one, the first, can only happen if the second, is so. It isn’t, things ate getting more normal, because we are not rushing back to the normal of old.
I also cannot understand how changes that improve quality of lifestyle, less commuting, less pollution, can be ignored.
We ought to redo our whole way of working. And thus thriving.
If it was a good idea it would have been done already.
If everyone is working from home there is no incentives for companies to engage them as employees it would make more sense for them to be freelancers. So be careful what you wish for.
Once upon a time, Tory free-marketeers trumpeted the virtues of capitalist competition, and revelled in seeing the weak go to the wall. Painful medicine was essential to eliminate out-of-date or unproductive enterprises, and to force redundant workers to get on their bikes and find new jobs in growing industries. But then, of course, the weak going to the wall were the manual workers in rust-belt industries who voted Labour. So the Tories didn’t much care about hurting them, and they positively welcomed the advantages of weakening the Labour Party.
But now, the weak at risk of going to the wall are, of course, quite different. There is Pret, whose presence on the streets creates a nice gentle greenwash atmosphere to help diffuse any criticism that the Tories might be letting the planet go to the dogs. There are the airlines, who support a lot of Tory-voting tourists. There are the pubs, where you can drink and be merry and forget about granny’s unnecessary death from coronavirus. All these industries need to keep their workers in their present jobs, in order to prop up the Tory vote.
Of course, ways could be found to redirect all these poorly-directed resources, of capital, energy, and labour, into other fields. We could cut class sizes. We could actually do something, other than clapping, to support the NHS and to fight CoVID. But what would all that do? It would just create a lot more lefty teachers, doctors and lecturers! We can’t have that, Dominic!
The danger here is that hard-pressed firms will realise that they are sitting on a lot of expensive and unnecessary real estate and dump it on the market very quickly.
Real Estate will be devalued and so will the book value of company assets, making borrowing for reinvestment and modernisation more expensive. Anyone with investments in real estate or companies that hold large amounts of these devalued assets will be hit – and that probably impacts on our pension funds…
Opportunity here for Lib-Dems to show we want change for better quality of life, more effective use of resources, less pollution and better environment, while helping people make the change. Boris is motivated by wealthy business people alone and in the past Labour have opposed change because working people are conservative about their jobs.
On the small matter of lunchtime sandwiches, a few years ago a shop opened part time in my local suburb selling snacks and sandwiches to elderly people who feel wealthy enough to buy them rather than make their own plus self-employed people passing through. Now is the chance for this shop to also supply to people working at home ?
@ Marco,
You’d be amazed at how group think impacts on business choices. But the changes in how offices work has accelerated in recent years. The move towards hotdesking means that staff use tablets rather than fixed computer units, and wider broadband rollout means that you don’t need to be in an office to function. That’s a comparatively recent development and, if you’ve signed a twenty-five year lease on an office building, you might want to get value out of it by using it. You also don’t have much evidence to demonstrate the impact of having significant numbers of staff working from home. Now, you do.
And yes, you could see employers seeking to convert permanent staff to freelancers. That does come with some risk though, in that said freelancers could work for the competition if the competition offers better compensation. You might struggle to obtain trained staff when you really need them, which having staff under contract prevents to a great extent. Can you fill internal vacancies on a freelancer basis?
But happier staff tend to be more loyal, and making them feel less secure might drive them to competitors who choose to keep staff on the books, in the same way that the rush to offshore jobs began to be reversed when they discovered that customers weren’t that keen.
@ James,
You’re right, of course. And that’s why any government faced with such a problem has to work out how to resource (and perhaps guide) the transitional phase, as the market adapts to the new reality. But that’s true of so much. We haven’t seen much thought in terms of how the gig economy and the end of the “job for life” impact on the housing market, or how you maintain a public transport system whose economics is currently predicated upon rush hour commuting.
Sadly, that involves long term thinking of the sort that came up with the pupil premium, for example. I don’t hold out much hope for that under the current administration…
There are obviously two time frames.
Hopefully a post-Covid one and our current one.
The current one is rather like during the War. We borrowed money to fight the war. We are putting people to fight covid by putting them on furlough and stopping transmitting the virus. Like France and Germany we should continue with furlough while that fight continues and for sectors who are at least partially affected.
The cost is zero. Interest rates are below zero. And since the Napoleonic wars we have never repaid a penny of the money we have borrowed to fight wars.
Obviously as during the war those jobs that need doing have changed – less demand for selling sandwiches at train stations and more for doing home deliveries.
Post covid the pattern of jobs will have changed. We don’t believe in the Stalinist direction of production and labour – it doesn’t work anyway.
And it will be something for the market to sort out. But we do believe in supporting people with benefits and training.
There also need to be a greater “nightingale” services to rectify the big falling behind in public services. NHS operations, kids education etc.
And we should be looking to encourage people into helping with these aspects.
Obviously someone can’t become a doctor overnight but there are things like teaching assistants, administrators, insulation installers etc and funding public services will lead to a Keynesian stimulus generally
“Balance” is the key word.
Looking at it from the point of view of companies, and making them function properly, “working from home” plays a vital role. It allows employees to focus on their work and get things done.
However, there are three downsides we need to be aware of:
1. People can over-compensate for the “guilt factor” of being at home by over-working and skimping on breaks. Work life balance then goes out the window.
2. Training. By that I mean the process of osmosis whereby inexperienced staff become experienced staff. Often the simple process of being in proximity with more experienced staff and sharing knowledge and techniques throughout the day – whether it be over the screen or at the coffee machine – is vital in growing staff skills.
3. The opposite of 1. Not putting too fine a point on it, it is difficult to know whether new and inexperienced staff are developing disciplined working skills if you can’t see them.
I have got used to home working in the short term, but office-based work is still in a situation of semi-hibernation. We carry on doing the same (or similar) work that we were trained to do at the office, but what happens when we are introduced to an entirely new area of work? Just read the guidance and carry on, or perhaps we might need someone to actually show us how new systems and software packages should work?
Another thing is that at some point, people leave and new colleagues join. How are we supposed to work with people who we do not know and have never met? Am I supposed to take instructions from a new line manager, and how was the decision made to appoint him/her to the managerial role and not me?
There are many, many questions about home/virtual working can operate in the medium and longer terms for which there are as yet no answers.
Not really,
Working from home will have a knock on effect on property values , government funding (not needing to pay overheads and utility costs for office space means lower tax intakes) and job security (it turns more people into freelancers and means lots of support jobs will go). My guess is more countryside will be lost because people who work from home mostly don’t want to do it in cities. This means we will actually see an expansion of road networks because personal transport becomes more important and takes over from public transport unless you’re poor. The usual habit of putting a few totemic “renewable” energy measure in place whilst destroying woodlands, farmland and so on will not actually compensate for the resultant environmental damage.
Politically, liberals and the left benefit from urban votes. Suburban and rural votes tend to favour the right. So, be careful what you wish for.
@Michael 1 ‘And since the Napoleonic wars we have never repaid a penny of the money we have borrowed to fight wars.’
Not wholly true. A few years ago, my sister and I were repaid War Stock inherited from our aunt. It was issued as 5% War Stock for the First World War and downgraded to
3.5% War Stock in the 1930s. My aunt had bought it as an investment and income.
@ Ian Sanderson (RM3)
“A few years ago, my sister and I were repaid (3.5%) War Stock inherited from our aunt.”
Were you? Think about it. Govt swapped it’s 3.5% War Stock IOUs for 0% cash IOUs. I don’t know about you but I’d rather have kept the 3.5% WS IOUs.
@Glenn
There are obviously transition costs and issues.
But a 10%-20% boost to productivity is a massive boost to the economy.
https://www.bbc.com/worklife/article/20200710-the-remote-work-experiment-that-made-staff-more-productive
We can apply your argument ad infinitum. Not have the mechanisation of agriculture because it will impact on agricultural jobs. Ban the motor car because it will put those working with horses out of work.
You may want to go back to prehistoric times but I don’t.
Conditions were harsh and life expectancy low.
Mostly markets are best placed to allocate resources.
Even if 30% of office workers work from home – a threefold increase, that still leaves the remaining 70%.
In fact stock markets are up.
But we will probably see offices converted to residential (already permitted development).
But there several things government should do:
1. Pay people to fight the war on the virus by extending the furlough scheme into 2021 like France and Germany.
2. Introduce nightingale services. For example getting actors to teach drama
3. Maintain a massive Keynesian stimulus by being slow to cut the deficit.
Sorry @John Barrett
“During recess and for many weeks of the year the Government functions perfectly well without any MPs of Lords going into Westminster”
Have you seen what has been happening in recent months. On numerous occasions law changes have been announced – and brought into effect without the legislation being published let alone scrutinised by Parliament. You can make a case that Parliamentary scrutiny can happen remotely but you can’t say that what has been happening has been government functioning perfectly well!
Michael 1
Where have I said anything about going back to prehistoric times? You are twisting what I said to argue with a point I’m not making. Straw man tactics at their most unsubtle.
Hywel – you make a good point and I should have said, it functions, without the addition of ‘perfectly well’.
However, just how effective Parliamentary scrutiny has been over many years, when the government has a working majority, is open to question.
In the decades that I have witnessed Parliament in operation, from near and far, with a few exceptions, governments have used their majority to push through many pieces of legislation, regardless of the opposition or scrutiny.
@ian Sanderson
Yes and I heard George Osborne say that when he was Chancellor, he finally redeemed Napoleonic war bonds.
But that’s irrelevant.
It is rather like redeeming a smaller mortgage and taking out a larger one
There have been the odd years when there’s been an in year surplus but only one or two.
The deficit gets “repaid” due to inflation and growth. If inflation is 2% and growth of 2.5% then if you have a yearly deficit of less than 4.5% then the money that the Government goes down as a percentage of GDP.
For example
Year 1 £2000 billion deficit £2000 billion national wealth, 100% deficit to GDP, 5% inflation and growth, government spends £70 billion more than it gets in taxes.
Year 2 £2070 billion deficit, £2100 billion national wealth, under 100% deficit to GDP
…and so on.
As Keynes expounded when there’s excess capacity as now then it makes sense for the government to run a deficit.
Monetarists in the 70s were worried about inflation if governments ran large deficits.
In fact Western countries like the US have run large deficits without high inflation
And indeed at the moment the threat is deflation.
Obviously you should bear down on the deficit as things pick up otherwise you do get overheating
And we’ve had long discussions here whether the coalition reduced the deficit too quickly. But I am expecting a double dip, W shaped recovery as quite a bit of the economy has gone AWOL.
@Glenn
I apologise if I made the point too strongly. But you do seem to be putting forward a very luddite point of view.
The logical conclusion of which is that we will never embrace any technological improvement. These spears – work of the devil. Why can’t we be ripped to pieces by lions like our ancestors. If it was good enough for them… !!!!!!
I have submitted evidence showing a 20% improvement in productivity. You have submitted no contrary evidence. I invite you to do so.
Of course no new technology is perfect and you sadly get frictional unemployment as people move jobs. But I’d suggest that every office “desk” costs getting on for £10,000 or more – commuting costs, rates, facility management, etc. Etc.
We will, I submit, soon view offices in the way we use them today as old fashioned as horse drawn stagecoaches are viewed today as a means of transport.
Michael 1
You did not make your point “too strongly”. You misrepresented and twisted what I was saying to drew conclusion based on that misrepresentation. And you did it using a clichés about prehistoric and then luddites. I have nothing else to say to you.
This is an interesting article. To me it exposes just how pleasant and easy life has been for many during the lockdown. Any major event creates winners and losers, and here is the voice of the winners. As I see it, if you’ve retained your job, have reasonable free space in your house and have no wider responsibilities for children then greater autonomy and no commute have been major tangible gains in the last six months.
Note the list of conditions though. To make working from home pleasant and effective you have an office space in your house and no distractions. Even then, you lose the implicit knowledge gained from experienced colleagues. So, let’s add to the list that working isolation means that its also highly advantageous to be an experienced employee. Finally, you have to have the sort of job that can actually be done remotely and where your employer is content to offer you some discretion.
I can see a picture building up here: If you’re an experienced employee in the kind of professional, analytical employment that grants you discretion and you live in the sort of house that gives you generally uninterrupted seclusion then life has been very good. There are plenty of good reasons to carry on. Then there’s everybody else. The newly and soon to be unemployed. The families in crowded houses. The working parents. The young people who need to be trained. Their voices have been far, far too seldom heard.
Working at home is a withdrawal of your social labour from the workplace. That’s fine if you have the financial and social capital to successfully effect that, but by withdrawing you’re attenuating the social bonds and transactions that less experienced and fortunate rely on. In each individual case it’s so small that it’s invisible. If one person works from home, nobody notices. If a million people privatise their social space, there’s a huge loss of communal experience, implicit knowledge and moral cohesion.