Over the past month the Government has implemented some of the most interventionist economic policies since the Second World War as it battles to keep the economy afloat amid the coronavirus pandemic.
While from a public health perspective, the virus has touched every part of the UK, from an economic perspective it is having a bigger impact in some places than others.
Technology makes it easy for people to work from home, ensuring that many businesses can keep running with minimal disruption. But this is not an option everywhere. Homeworking is more likely in places with highly-skilled information-based economies where face-to-face interaction is a benefit, but not a necessity.
Centre for Cities estimates that over 40% of workers in London or Edinburgh could work from home, while in Barnsley or Stoke just 20% could, due to the dominance of retail and other lower-skilled service jobs. Unfortunately, many of these places were struggling prior to the pandemic and so the coronavirus will have a bigger and longer-term impact in places where the economy has now effectively ground to a halt.
The larger proportions of low-skilled self-employed people in cities outside South East England will also make it harder for their economies to recover. Almost 90% of self-employed people in Barnsley undertake low-paid work, compared to 58% of those in Cambridge.
Unfortunately for those working in Barnsley and similar places, the market for the low-skilled service economy has shrunk significantly during this pandemic, and the Government is finding it more difficult to effectively subsidise self-employed people’s incomes to the level that it has already put in place for employees.
So, while the Government’s interventions so far have been essential in safeguarding the country from immediate economic collapse, once the public health crisis has ended policymakers will need to develop a new long-term response which recognises that the economic damage done by coronavirus will be felt differently across the country.
And without a place-focused economic response, the inequalities that we saw before the advent of coronavirus will become even more entrenched, and the Prime Minister’s mission to level up the country will be nothing more than a pipedream.
Andrew Carter is chief executive of Centre for Cities