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Central London will never return to normal, says NatWest chairman

·4 min read
City
City

The number of people working in central London will never return to pre-pandemic levels because employees will not come back to the office five days a week, the chairman of one of Britain's biggest banks has warned.

In stark contrast to Boris Johnson and Rishi Sunak's hope that city centres will roar back to life, Sir Howard Davies has argued that the era of daily commuting is over for good.

"The days when 2,500 people walked in through our office door at Bishopsgate at 8.30am and then walked out again at 6pm, I think that is gone," the NatWest chairman told Bloomberg.

Unlike Wall Street banks that have forced staff back in and maintained that home working would never be permanent, British banks are calling time on office life and some have already begun slashing office space.

"We are looking at having a minimum expectation of a few days a month where people will definitely have to be in the office, and then it will vary by teams, but I suspect there won’t be many people doing five long days in the office," Sir Howard said.

NatWest
NatWest

His comments will come as a blow to ministers hoping that the end of Covid restrictions would mean a return to office life.

Many companies have already made their decisions on future working life. HSBC, Europe’s biggest bank, said earlier this year that it would axe 40pc of its global office space while Standard Chartered has also told its 75,000 employees they never have to go to an office again.

Major City employers such as Aviva, Deutsche Bank and Lloyds have also laid out plans to slash office space and shift to remote working.

But the Chancellor, Rishi Sunak, has been rallying Britons to return to the office, arguing that it was "really important" for younger staff.

Bruce Carnegie-Brown, the chairman of Lloyd's of London and vice-chairman of Santander, said he thinks the "never return to normal" forecast was "too alarmist", but conceded that there would be changes post-pandemic.

"I’m not worried about the future of London. It’s been around for over 1,000 years and has adapted to crises which were far more significant than this pandemic: plague, Great Fire, cholera, Blitz," he said.

"I think all businesses should be trying to retain the benefits of a hybrid working model, which will include more working from home than pre-pandemic, but I think it’s too early to judge how this might evolve. I don’t see any real migration back to the work place happening until September."

The long-awaited "freedom day" has not been the liberation many had hoped for, with Sage warning that daily deaths could rise to 200 while Professor Neil Ferguson, the scientist behind the lockdown strategy, has said it is “almost inevitable” that daily infection rates will exceed 200,000.

The spike in cases has left employers in an uncomfortable position. Many young people have not been fully vaccinated while others fear having to isolate, meaning those forcing a return to the office are likely to face a backlash.

Sir Patrick Vallance said during a Downing Street press conference this week that hospitalisations from Covid could reach 1,000 a day while the US has told people not to travel to the UK amid rising cases.

On Tuesday the chief executive of UBS, Ralph Hamers, said its investment bankers would be able to work part of their time from home under a new, permanent hybrid model.

Even clients of Switzerland's biggest bank have said they prefer holding some meetings online, he said.

“Traders are clearly part of the 25pc to one-third of the roles for which it is really difficult to work from home,” Mr Hamers told Bloomberg. “But beyond that, there’s two-thirds to 75pc of our roles that can be performed in a mix of working from home and working in the office.”

UBS is allowing at least two-thirds of its employees to opt for hybrid working as it seeks to cut costs and gain a recruitment edge over US rivals taking a more hardline approach.

Has the pandemic ended the era of daily commuting for good? Share your view in the comments section below