24-hour Tube strike disruption to cost the capital tens of millions

 
Rebecca Smith
It's not just a pain for commuters: businesses have felt the impact of the 24-hour industrial action
It's not just a pain for commuters: businesses have felt the impact of the 24-hour industrial action (Source: Getty)

Commuters might've had a miserable journey into work this morning, and businesses haven't been enjoying the 24-hour Tube strike much either.

The industrial action, organised by the Rail, Maritime and Transport (RMT) union and The Transport Salaried Staffs' Association (TSSA), has resulted in a plethora of station closures and disruption across the capital.

This has just been a 24-hour strike, but Simon French, chief economist at Panmure Gordon, says the cost of the industrial action to the capital will still be substantial - pinning it at £90m.

"The UK is a services-dominated economy that relies daily on the mobility of its workforce," he said. "Disrupting crucial transport arteries is damaging for economic activity that at best takes longer or at worst cannot be completed at all."

Read more: Tube strike causes chaos for commuters and kicks off week of travel misery

Industrial action has been carried out by station staff, members of the TSSA and RMT unions, over staffing levels at stations. And it's brought trouble to the majority of services on the London Underground, which carries 4.8m passengers daily. Disruption is expected to continue past the strike end-time at 6pm.

French warned of the impact of longer-term trouble should further negotiations fail to resolve the dispute. "Prolonged disruption has wider impacts on London's competitiveness by discouraging future investment," he said. "This would be a lose-lose-lose scenario for TfL, for the RMT and for London's commuters."

The Federation of Small Businesses (FSB) said its businesses were "losing revenue that can never be replaced". Sue Terpilowski, FSB London policy chair, said previous strike data from the group "showed that 58 per cent of our 7,000 members were negatively affected by shut downs", pointing to cancelled meetings and staff absences.

Commuters were forced to opt for alternative routes into work today
Commuters were forced to opt for alternative routes into work today (Source: Getty)

The London Chamber of Commerce and Industry (LCCI) has noted the economic impacts of the strikes are "incredibly widespread".

LCCI chief executive Colin Stanbridge said aside from the more obvious detrimental effects such as staff being delayed, there are also "potential losses from delayed deliveries and supplies caused by increased road congestion as a knock-on effect of the strikes".

"Another unknown cost which is potentially quite serious, but hard to estimate, is the reputational cost of the centre of London being perceived as closed for business at the very time when we want London to be attractive for business, investors and visitors," he added.

Others have pointed to the drop in footfall as a drag on businesses too. Edward Cooke, chief executive of retail property body Revo, said hospitality and retail sectors would be buffeted further after already facing "a perfect storm of rising costs through the business rates revaluation, national living wage and inflation caused by the weaker pound".

Read more: Christmas strikes: Why all the walkouts?

"Based on the near 10 per cent dip in footfall on previous strike days, we expect similar disruption and for the strike to disproportionately affect thousands of smaller retailers across London," he added.

Rail troubles continue on Southern rail, with more industrial action planned on the network tomorrow, Wednesday and Friday.

London First has already said "strikes are costing tens of millions of pounds each day" on Southern rail.

And David Learn, infrastructure director at the business group, said the "hugely disruptive" Tube strike was another headache for businesses and employees alike.

"We have to keep London moving - we need unions to choose to work with employers, instead of punishing the millions of people who rely on their services," he said.

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