Car showrooms are open again: some dealerships, with a hint of forgivable hyperbole, report a surge of pent-up demand. And after building only 197 new cars this April, compared with 71,000 in April 2019, car factories are returning to production — even if under new safety rules that will slash productivity for the duration and accelerate the shift to job-eliminating robotics for the longer term. But still the Daily Telegraph offers an uplifting glimpse of Land Rover’s Solihull plant emerging from hibernation: ‘At 5 a.m., as the first shift came in, every production manager was out in the car park to greet returning staff.’
Perhaps most importantly, Nissan made two announcements about its Sunderland factory, often described here as the bellwether of the UK auto industry. It will resume production on Monday, on a single adapted assembly line. And after a worldwide review, the loss-making Japanese car-making giant has decided to close its last plant within the EU, at Barcelona, but to keep Sunderland open — despite the uncertainties of Brexit, which put its future in doubt. The plant which currently employs 6,700 workers might even win contracts to build cars for Nissan’s alliance partner Renault, so long as the French government doesn’t make that impossible.
So the automotive sector at large, which claims to contribute £200 billion to the UK economy and to employ more than 800,000 people in occupations ranging from petrol station cashier to Formula 1 engineer, is — as we might reasonably expect, if we shake off lockdown anxiety and switch off the BBC’s livestream of doom — twitching back to life. Combine that thought with observation of reviving activity in your own locality and news from Bank of England chief economist Andy Haldane that business data is coming in ‘a shade better’ than the Bank itself expected only a month ago. A recent poll of more than 70 City economists said much the same thing: whisper it quietly, but a rapid V-shaped recovery next year might actually be on the cards.
Save our stages
But not, of course, in every sector. As it becomes clear which industries are sufficiently capitalised and capable of reinvention to pull though, so it also becomes obvious which are not — and most need help if they are not to be sacrificed. I’m thinking of the cultural sector, which according to DCMS figures contributes £32 billion to the economy (making it comparable in scale to the ‘life sciences’ sector) as an integral part of a larger ‘creative industries’ contribution of £112 billion.
Particularly close to my heart are our theatres, which are unable to plan for re–opening under current social-distancing rules because their audience capacities would be slashed to 20 per cent, and which have hefty overheads, no current trading income and shrinking reserves, and are reliant for future plans on freelance actors, musicians and technicians who will have turned to any other available work long before theatres can call them back.
The entire British stage — envy of the world in both its commercial and subsidised forms — is dark and in danger. Of course there’s no easy solution, because it’s impossible to imagine audiences flocking back, even if the two-metre rule is removed, until the virus risk has gone — which means long after the current furlough scheme has expired. But performing arts are not optional extras: they are essential threads of social fabric as well as catalysts for vastly more economic activity than bare statistics suggest. And they cannot save themselves from this cataclysm. DCMS secretary Oliver Dowden, one of Downing Street’s greyest men, has said nothing useful to date: he should embrace Rishi Sunak’s ‘whatever it takes’ and come up with a very bold plan.
Gas down, gambling up
Speaking of worst-hit, it will come as no surprise to see easyJet and the cruise ship operator Carnival tumbling out of the FTSE 100 index of London’s most valuable companies in its quarterly reshuffle this week, following the demotion of the Anglo-German holiday business Tui in March. Yet travel agents report renewed interest in 2021 bookings, and these names could become next season’s recovery stocks. By contrast, another widely expected pecking-order change is the downgrading of Centrica, parent of British Gas, whose shares now stand at just one-tenth of their 2013 peak.
How has the UK’s biggest energy supplier managed to lose the place it has held in the top league ever since British Gas was privatised in 1986? The answer is a combination of challenger competition that halved the company’s market share, a regulatory price cap that squeezed profitability and led to a slashed dividend, and a loss of investor confidence in the management of former boss Iain Conn, who left in March — all followed by the demand-slump of the pandemic.
For once, the cliché ‘perfect storm’ looks appropriate, but still it’s surprising to have to apply it to a company that seems so solidly part of the national infrastructure. And moralists may be troubled to see it replaced in the index by GVC Holdings, which turns out to be one of the world’s largest online sports betting and gambling companies.
Cheer up, kids
What advice can I offer ‘Generation C’, the youngsters who feel their futures have been devastated by the pandemic — just as their predecessors a decade ago felt their prospects were bitterly blighted in the aftermath of the financial crisis? Don’t do a useless, largely online-taught ‘uni’ degree just because you can’t think of anything better. Do master a foreign language and maximise your digital skills. Go travelling as soon and as far as you can. Take whatever work is on offer. Don’t lose sight of your ambitions. Do start a business of your own if you have a bright idea. And don’t despair: in the 50-year world-of-work adventure ahead, this will one day feel like a momentary setback.
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