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.