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City back in shutdown as firms send staff home

Michael O'Dwyer
·4-min read
Canary wharf
Canary wharf

Britain's biggest banks, law firms and accountants have cancelled plans to bring thousands of workers back to the office following new advice from ministers - dragging the City back into shutdown and sparking fresh fears for London's tottering economy.

Some of the Square Mile's biggest businesses have said that staff should work from home again just weeks after beginning to reopen, as the rules are changed amid a resurgence in Covid infections.

Those to U-turn include accountant PwC, which was previously an enthusiastic supporter of the return to work but has now told its 22,000 UK staff to stop coming to the office unless they have a clear personal or business need.

 HSBC, Goldman Sachs, Citigroup, Deutsche Bank and Lloyds all also changed tack on Wednesday. They have more than 40,000 workers between them in the City and Canary Wharf.

Barclays updated its instructions to staff the previous day, shortly after new guidance was announced.

The vast majority of workers at Magic Circle law firm Linklaters, accountant KPMG, insurer Hiscox and the Lloyd’s of London insurance market will also work remotely unless their jobs require them to attend in person or working from home is harming their wellbeing.

Investment banks and other financial services firms contribute £75.5bn to the Exchequer each year, 10pc of Britain's annual tax take - the vast majority of which is generated in the capital. Their legions of highly skilled workers play a key role in propping up a London economy which supports 6.1m jobs.

It is now feared that a six-month pause on office life will trigger mass bankruptcies for the bars, restaurants, shops and other small businesses that depend on City trade.

Catherine McGuinness, policy chairman for the City of London Corporation, said safety has to come first but expressed disappointment at the blanket call for office workers to return to working from home where possible. 

Speaking to BBC Radio 4’s Today programme, she said: “Firms have taken huge steps to make sure that their offices are Covid secure. It’s clear that this virus isn’t going to go away quickly so we need to find a way of living with it that doesn’t cripple our economy.

Ms McGuinness called on the Government to look closely at the evidence to support working from home and said other financial centres had brought people back to offices without apparent related increases in infections.

Britain was already lagging far behind other European countries on a return to office life before the new guidance. Analysts at Morgan Stanley said in August that only 34pc of UK white-collar employees had gone back to work, compared to almost three-quarters of staff on the Continent.

PwC was previously one of the most vocal City firms to call for employees to return to the office, and about half its staff had been back in at some point since the Government relaxed stay at home guidance. 

The company was forced to change tack after Prime Minister Boris Johnson said on Tuesday that people in England should work from home as the UK battles a sharp rise in infections, in a screeching change of direction for the Government.

Weeks earlier, Whitehall was drawing up plans for a back to work advertising campaign and officials were briefing that employees who stayed at home could find their jobs were at risk.

Kevin Ellis, chairman of PwC UK, said last month that reopening buildings would allow security and catering staff to return and that “we all have a responsibility to play our part” in saving local businesses that rely on footfall. 

The Big Four accountant has now joined major financial and legal firms in telling staff to return to logging on from home for the winter, increasing fears that city centre businesses could be “crippled” by tighter restrictions to battle the spread of Covid-19. 

On Wednesday, Mr Ellis said: “We’ve seen benefits for our people, clients, suppliers and communities of using our offices in recent weeks and they will continue to play an important role - but only when appropriate to do so.” 

Aspects of PwC’s work, including audit, that require gathering of evidence and judgments will sometimes require face-to-face discussion and on-site activities, to preserve decision making and quality, he added. 

It came as the Government cancelled its autumn Budget and Chancellor Rishi Sunak was expected to update MPs on Thursday on new plans to support jobs through a second wave of Covid infections. 

Goldman Sachs has welcomed back about 30pc of its 6,500 London staff but Richard Gnodde, chief executive of its international arm, encouraged employees in a memo to return to working from home if they could. 

Lloyds Banking Group will pause an experiment to repurpose unused parts of its branches as meeting rooms from next month.