Week-long tube strike could cost London economy £100m a day

London’s economy could take a £100m-a-day hit during next week’s devastating Tube strikes, analysis suggests, as business groups claim the strike could help tip the UK into recession.

There will be little or no service across the London Underground from Monday to Thursday after strikes begin on Sunday night, after RMT members voted by more than 90 per cent against an “unacceptable” pay offer. below 5 percent inflation.

While RMT general secretary Mick Lynch has urged Transport for London (TfL) to “start meaningful conciliation talks to avoid disruption”, the body insists its pay offer “is the maximum we can afford and at the same time We guarantee that we can operate safely, reliably and sustainably. ”.

London Underground closure will last from Sunday afternoon to Thursday night

(Jack Taylor/Getty Images)

But business groups urged the RMT and London mayor Sadiq Khan to “find immediate solutions”, expressing fears The independent that strikes in the capital will affect the wider UK economy and put further pressure on struggling businesses.

“At a time when our economy is stagnating, these reckless attacks could lead us into a recession,” said BusinessLDN CEO John Dicki. “They will especially affect sectors such as hospitality and retail trade, which depend especially strongly on influxes. “All parties should put an end to these disruptive attacks among their New Year’s resolutions.”

Urging a “swift and fair deal that puts jobs and businesses first”, acting chief executive of the London Chamber of Commerce and Industry Karim Fatehi said: “We cannot allow these damaging strikes to affect businesses. SMEs in London, which have already been seriously affected by Covid and global events.

“London is the engine of the UK economy, contributing more than 20 per cent of our national GDP. “If London slows down because of this strike, the whole country will suffer.”

Warning that the four-day Tube closure “will have a huge impact on London businesses just as small businesses are trying to make a bright start to a new year”, the Federation of Small Businesses said: “We want to show London to the world.” , but the signal sent by the out-of-order transport systems is not useful.

Analysis by investment bank Panmure Gordon suggests strikes could cost London’s economy £100m a day.

(Leon Neal/Getty Images)

“London needs to show that it is open for business and we hope that all parties involved in the dispute can reach an agreement as soon as possible.”

The British Retail Consortium added: “Next week’s tube strikes will be detrimental to retailers, hampering commuter, leisure and tourist traffic. “After a disappointing festive shopping season, these strikes will hit already vulnerable businesses in the capital.”

Simon French, managing director of investment bank Panmure Gordon, said his March model – based on passenger volume, travel costs and average wages – found that tube strikes cost London’s economy 90 million pounds a day.

“While overall consumer prices have increased by approximately 4 percent over the period – and there has been a further uptick in traveler volumes – it could be argued that [is] closer to £100m a day,” Mr French suggested.

However, this figure is higher than previous estimates: the Center for Economic and Business Research found that the cost was close to £24 million during the tube strikes in June 2022.

While resolutions have finally been reached in many of the national disputes that fueled the most intense period of strike action in the UK since the 1980s, the first week of 2024 was marked by young doctors organizing the longest strike in history from the NHS, with more news. actions on the horizon in other sectors.

Civil servants won a 4.5 per cent pay rise and £1,500 cost-of-living pay with mass strikes in 2023.

(AFP via Getty Images)

The Public and Commercial Services Union said it was preparing for the possibility of a nationwide vote for industrial action on civil service pay, following a campaign in 2023 which saw the government agree a lump sum payment of £ 1,500 and an increase of 4.5 percent, after More than 100,000 officials left.

The union’s general secretary, Mark Serwotka, said The independent: “While we remain in positive discussions with the Cabinet Office on a number of pay issues, we are not optimistic that they will put enough into members’ pockets by 2024. As a result, PCS members and representatives across the civil service are preparing for the possibility of a vote on legal industrial action across the UK.”

Supermarket Asda will also face its first strike this month, when at least 100 employees will go on strike for 15 days, while employees at Amazon’s newly opened flagship fulfillment center in Birmingham also voted to join the strikes that They caused the fall of more than 1,000 Amazon employees in Coventry. tools in November for the first time.

Andy Prendergast, GMB national secretary, said: “Amazon and Asda are just the latest companies to face an unprecedented strike. Large companies need to better appreciate who generates their profits: their hard-working staff. In a current cost-of-living crisis, workers across the economy are clearly saying they deserve better.”

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