Covid-19 & the market

Economists, businesses and social commentators have spoken at great length about how the Covid-19 crisis has shocked the market. Flying between meetings might be a thing of the past for many companies as business goes on as normal by utilising videoconferencing software. Home delivery services are on the increase, whether it is small businesses trying to cope with the lack of footfall or larger companies providing home deliveries for those not wanting to break quarantine. Netflix and other streaming services have seen an increase of users.

The market is changing. The way we operate is changing. These are changes that will linger for long after Covid-19 has become a thing of the past. But, as is a theme above, Covid-19 has done one thing especially well and that is boosting the information and technology and digital services sector.

I work in the aviation sector, arguably the hardest hit by the Covid-19 pandemic. Over the last week:

  • British Airways has cut 12,000 jobs
  • Virgin Atlantic has cut 3,000 jobs
  • Boeing has reduced production by 50%
  • Airbus has reduced production by 35%
  • GE has cut 10,000 aerospace jobs
  • Rolls-Royce set to cut 8,000 aviation jobs

People will travel for business and for pleasure but getting back to the levels seen before the Covid-19 crisis will be a rough, but is it right for companies to reduce their numbers? And how is the move supported by government given those companies listed above have such high profit margins? The BBC today (6th May) released a piece of news regarding Qatar Airways:

“In February, Qatar Airways increased its stake in British Airways owner IAG to 25% as part of its strategy to invest in other carriers.

This boost in confidence in IAG also comes not long after we have found out that the Spanish government has provided IAG with a substantial €1 billion-euro bailout package. This has, however, been directed toward IAG’s low-cost airlines – Vueling and Iberia. The amount has been agreed, but not yet been processed.

IAG has seen year-on-year profits before the Covid-19 pandemic (as illustrated below) leading to staff threatening strike action in regards to pay. Which raises the question; why was British Airways was so keen on making 12,000 staff redundant?

It is often argued that companies need to make reductions because they need to survive and to stay afloat. A slashing of jobs means that the company can go on. But Covid-19 removes us from what are considered standard levels of business practice and instead shoves us back into the realm of fiscal tightening not seen since the financial crash.

It is precisely because of this debacle that we need companies to put their staff first and continue to keep them in employment. We limped out of the last financial catastrophe with a huge divide between those that have money and have the facilities to store it in offshore accounts or who bet against the market, a practice known as “shorting”. The majority of us don’t have these capabilities and are therefore more likely to suffer as a result in companies clamming up with the money that their employees helped them create.

The money going into hands of employees means that more funds will be diverted to other areas of the economy that have seen a drop because of Covid-19 such as the retail sector, restaurants, pubs, renovations and home improvement that would bring back the fleet of self-employed people who suffered a shock after Rishi Sunak’s emergency Covid-19 budget. People will also be able to pay their mortgages and their rent instead of facing the ridiculous one month deferral period in which landlords are not allowed to kick out tenants.

Unprecedented times call for unprecedented measures. This is one of those times when big businesses need to not stem the flow of money, but approach their workers with a calm and collected resolve to spread money and help stimulate the economy. And maybe even win back some trust and faith from their employees because, when the time came, the companies did the right thing.

Did you vote for Henry Smith?

Henry Smith was re-elected as MP for Crawley in this year’s general election.

But what does Henry Smith stand for? We can get an idea by looking at his voting history. He has voted:

  • Against banker’s bonus tax – despite bankers being responsible for sinking the economy in 2007/2008
  • Against gay rights
  • Against laws promoting equality and human rights
  • Against a “right to remain for EU nationals” already living in the UK
  • Against benefits raising in-line with prices
  • Against higher benefits over longer periods for those unable to work due to illness or disability
  • For increasing rate of VAT (BUT against increasing rate of taxes for those paid over £150,000
  • For allowing employees to exchange some employment rights for shares in the company they work for
  • For more restriction of trade union activity
  • For reducing capital gains tax
  • For reducing corporation tax
  • For raising England’s undergraduate tuition fees to £9,000
  • For reducing government funding for local government
  • Against a more proportional system for electing MPs
  • For greater restrictions on campaigning by third parties, such as charities, during elections
  • For mass surveillance of people’s communications and activities
  • Against measures to prevent climate change
  • For selling England’s state-owned forests
  • Against financial incentives for low carbon emission electricity generation methods
  • Against greater public control of bus services
  • For capping civil service redundancy payments
  • Against restrictions on fees charged to tenants by letting agents

After a visit to the Cayman Islands, Henry Smith also supported the fight against anti-money laundering measures and criticised plans to introduce more transparency to the islands. In other words, Henry Smith supports offshore tax havens.

The Panama Papers have shown that offshore tax havens support organised crime including drugs and human-trafficking and terrorist cells whilst also allowing banks to hide money and avoid paying those taxes that could go toward public services.

Does Henry Smith stand up for the average person? Please check the site:

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Living with a (tired) teacher

I was spread out on the living room floor, reading a bulky sci-fi novel when I heard an intake of breath. Not exactly a snore. But kinda like a snore.

My fiance (let’s call her “Tired Teacher”) was sitting cross-legged on the couch. A four-colour bic hanging from her hand and a student’s English book spread on her lap. Her head was on her chest and her eyes were closed. Asleep.

This is common. I reach over and shake her leg. She comes to, head snapping up like she had never stopped marking. She offers an exhausted, embarrassed smile and gets her pen ready.

I get another paragraph in, a boy trapped underwater, his best friend struggling to get to him. The adults are racing to the scene but who knows if they’ll be there in time – another not-quite-but-kinda-like a snore.

Her head is down again. Eyes closed. Pen at the ready.

I shake her awake. Tell her to go to bed. She nods and puts her student’s book into a large bag. The same bag she lugs in and out of the car and somehow hefts to and from school Monday to Friday.

When the book is away she slumps sideways across the couch and is asleep. It’s 12.32 in the morning. She’ll be getting up at six-thirty.