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Boris Johnson is asking businesses to take a big risk. Few will do so

When a market is producing outcomes you don't like, you can change the incentives or scrap the market. Johnson proposes to do neither. 

By Stephen Bush

Employers in England will be given the discretion to decide whether workers who can work from home should continue to do so from 1 August, the government has announced, while people should now feel free to use public transport as they desire.

It’s an attempt to solve one of the problems created by the coronavirus recession – that home working has dire economic consequences for the industries that have arisen to cater to office workers.

The immediate health risk of the change is it involves many more journeys into city centres while the novel coronavirus still could infect many more people, and when it is unclear if the NHS is able to cope with an uncontrolled outbreak (remember that for most working-age people, the big risk is not that you’ll die from coronavirus, but that you’ll die because it has crippled healthcare capacity).

But in practice, it’s not clear how many people will be asked to bear this risk. I may be talking to a highly unrepresentative sample of business leaders, but my overwhelming impression is that, as I write in my i column this week, workers are going to switch from fighting for time away from the office to fighting for time in the office. Over at the Economist, Tom Rowley reports a similar pattern of greater acceptance of distanced working by bosses.

The incentives to return to office working in a pandemic are, bluntly, unclear. As a business, you risk the following: damage through lost days due to sickness, restrictions on your ability to trade thanks to local lockdowns, and the risk of long-term legal liability for your employees in the event of an outbreak in your workplace. In addition, the cost of making your workplace Covid-secure falls on you, not the state.

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On the other side of the ledger, with home working you no longer bear many of the costs of maintaining and servicing your large building, and may well be able to divest yourself from the remaining costs as soon as your lease is over.

The question for many businesses is not just “why return during a pandemic?” but “why return ever?” I spoke to three people with intimate knowledge of their businesses’ plans for their offices, and they all described a near-identical future: a shrunken office estate, largely for the use of trainees and new hires to induct them into the organisation’s culture, a handful of executive suites, and some facilities to entertain clients and guests.

The reality is that many businesses were moving towards distanced working well before they were told to by the government, and they will return to offices well after they are allowed to do so, if at all. They are responding rationally to their bottom line and to market incentives, and the way to deal with market incentives producing outcomes you dislike is either to change the incentive or to abolish the market in question. As it stands, the Conservatives don’t have a plan to do either of those things.

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