My notes in preparation for the Jeremy Vine Show today – how we need to get companies to react to the coronavirus crisis

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Sometimes I go on air having doing no prior thinking, and sometimes I prepare. I did for Jeremey Vine on BBC Radio 2 today. These were my notes as I prepared them:

The issue

  • Some companies are struggling right now
  • Others are doing very well
  • The evidence is that very few companies were prepared for anything like this
  • And yet we are critically dependent upon them

We need to react to the good and the struggling - because society is dependent upon both

  • Some companies who are doing well - like supermarkets - did so because they did not hold the stocks required to face a crisis. We need to ask why
  • Some are doing well because of what is in effect rationing - not letting us go out is a form of rationing. These companies include:
    • Supermarkets
    • Convenience stores
    • Online retailers
    • Subscription services for music, video and more
    • Car insurers - because we’re simply not going out
  • Others are doing well because of the crisis itself
    • Suppliers of PPE
    • Some pharmaceutical companies
    • Banks - who are being paid to hand out state-backed loans
  • Some are doing well because of subsidies
    • The supermarkets are getting rate rebates worth hundreds of millions of pounds at the same time as their sales are up a lot and special offers have disappeared
  • There’s a key idea here - that we are all in this together
    • But are we if some profit at the expense of the rest of us?
  • What can we do?
    • One option is an excess profits tax - which we had from 1939 to 1945. There is good reason to think one might be needed - and to enact it now as a precautionary measure
    • But we also need to
      • Make sure these companies really do pay the tax that they owe
      • They must put a full explanation for their tax affairs - country by country so that we can see what they do where, including in tax havens, on public record, and they must offer explanation
      • Bank executive pay rises from profits for them coronavirus crisis
      • Require that profits be invested in making these companies sustainable rather than paying excess dividends o paying for share buybacks
      • Require that these companies be better prepared for crises in future
      • For example, supermarkets and PPE companies should hold more stock of critical and long shelf life items
      • Demand that companies keep more funds so that they can all face crises better in the future - the evidence I am looking at is that many have paid out all their earnings in the last ten years and left nothing in their companies to fund investment - and that has left them deeply vulnerable
    • And we need to make sure that this does not happen again
      • Everything has to change: including companies
      • We’ve accepted that their only duty is to make profit
      • But right now we’ve found that when the chips are down what we need are essential services
      • We need essential companies too - ones that are resilient enough to survive
      • We can have them but that needs change to company law and accounting
      • But if we don’t do this when the next crisis comes along - the climate crisis - business will not be ready - and that one is much bigger than this
      • So reform to make sure companies can survive much bigger stress than they have shown that they are capable of doing now is essential if business is going to play the essential role that it must in our society in the future

Of course, the whole point of preparation is to have thought things through and then be ready for something completely different to come up, but on this occasion it went pretty much to plan.