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Analysis shows that London’s economy may face a loss of £100m daily due to the upcoming Tube strikes, according to business organizations who believe that the strikes could potentially push the UK into recession.
Starting on Sunday evening, the London Underground will experience limited service or no service at all until Thursday due to a strike. This decision was made after more than 90% of RMT members rejected a pay increase offer of 5% that was deemed inadequate.
While RMT general secretary Mick Lynch has urged Transport for London (TfL) to “enter into meaningful conciliatory talks to avert disruption”, the body insists its pay offer “is the most we can afford while ensuring that we can operate safely, reliably and sustainably”.
The closure of the London Underground will begin on Sunday evening and end on Thursday night.
However, business organizations have called on the RMT and London mayor Sadiq Khan to quickly find solutions. They have expressed concerns to The Independent that strikes in London could negatively impact the overall UK economy and add more pressure on struggling companies.
BusinessLDN CEO John Dicki expressed concern that these irresponsible strikes could cause a recession during a time when the economy is struggling. He emphasized that industries like hospitality and retail, which heavily depend on customer traffic, will be particularly affected. Dicki urged all parties involved to prioritize putting an end to these disruptive strikes as a New Year’s resolution.
The interim chief executive of the London Chamber of Commerce and Industry, Karim Fatehi, is calling for a prompt and just resolution that puts jobs and businesses first. He emphasizes the importance of avoiding further harm to small and medium enterprises in London, which have already been severely impacted by Covid and other international incidents.
“The city of London drives the UK’s economy, accounting for more than 20 percent of our overall GDP. If London’s growth is hindered by this strike, it will have negative effects on the entire nation.”
The Federation of Small Business expressed concern about the four-day Tube shutdown and its potential negative effects on London businesses, particularly as small firms are looking to start the new year strong. They stated that the shutdown could send a detrimental message about London to the world, hindering efforts to showcase the city.
According to a report by Panmure Gordon, the potential impact of strikes on London’s economy could result in a loss of £100 million per day.
We hope that all those involved in the disagreement will come to a resolution quickly, and that London will demonstrate its willingness to conduct business.
The British Retail Consortium stated that the upcoming strikes on the tube will have a negative impact on retailers, as they will disrupt the flow of commuters, leisure seekers, and tourists. This will further harm businesses in the capital that are already struggling after a disappointing holiday shopping season.
According to Simon French, the managing director of Panmure Gordon investment bank, his analysis in March showed that London’s economy loses £90 million per day due to Tube strikes. This calculation takes into account factors such as commuter numbers, expenses of alternative transportation, and average wages.
“According to Mr. French, consumer prices have increased by approximately 4% and there has been a significant increase in commuter volumes. It could be argued that this equates to around £100 million per day.”
Unfortunately, this amount is greater than previous approximations, as the Centre for Economics and Business Research determined the expense to be around £24m during Tube disruptions in June 2022.
Although solutions have been found for several national conflicts that contributed to the UK’s most intense period of labor strikes since the 1980s, the beginning of 2024 saw junior doctors organizing the longest strike in NHS history. There are also potential future strikes looming in other industries.
In 2023, mass strikes resulted in civil servants receiving a 4.5% increase in pay and a £1,500 cost of living payment.
The Public and Commercial Services Union announced that it was getting ready for a potential nationwide vote to take industrial action regarding pay for civil servants. This comes after a campaign in 2023 where the government agreed to a lump sum payment of £1,500 and a 4.5% raise, following a strike by over 100,000 civil servants.
Mark Serwotka, the general secretary of the union, informed The Independent that while they are engaged in productive discussions with the Cabinet Office regarding various pay matters, they do not have high hopes for seeing significant increases in members’ salaries by 2024. As a result, both PCS members and representatives in the civil service are making arrangements for a potential nationwide ballot for industrial action.
Asda, a popular supermarket, will experience its inaugural strikes this month as a minimum of 100 workers plan to go on strike for 15 consecutive days. In addition, employees at the newly established flagship Amazon fulfilment center in Birmingham have also decided to participate in the strikes. These strikes are a result of the November strike where over 1,000 Amazon employees in Coventry ceased work for the first time.
Andy Prendergast, national secretary of GMB, expressed that Amazon and Asda are the most recent companies to encounter a significant strike. It is important for large corporations to acknowledge the individuals responsible for generating their profits – their dedicated employees. As the cost of living continues to be a struggle, workers from various industries are demanding better treatment and conditions.
Source: independent.co.uk
