Is The London Underground Strike Set To Cost UK £200 million?
In multiple reports published yesterday, business leaders have claimed that the London tube strikes may cost the UK economy £200m. Is the strike this detrimental to business activity? We explore …
The 48-hour strike of London Underground staff called by the RMT and TSSA unions has brought London to a standstill. London’s famous tube network, which carries millions of passengers each day, is one of the city’s lifelines. And it looks highly probable that another 48-hour strike would hit London next week.
While London residents have continued scrambling from station to station trying to figure out how to get to work, economic activity is bound to suffer. But the real question is, to what extent?
In a report published yesterday, it was claimed that the London tube strike might cost the UK economy £200 million. Amidst the travel chaos, workplace attendance and productivity have taken a substantial hit. Employees commuting within London to work have found themselves stranded, diverted and deserted from their regular paths. Combine this with the UK storms collapsing the few functioning rail alternatives, and it might add up to immense workplace absenteeism.
Why would the tube strike cost UK’s economy £200 million?
The London Chamber of Commerce and Industry (LCCI) is the city’s largest business group. LCCIs membership draws from every level of London’s economy; it represents everything from huge MNCs to SMEs, and even independent traders. As soon as the strike delays caused rush-hour chaos, LCCI issued an economy warning.
In a statement released yesterday, LCCI warned that the strike would cost close to £50mn for every day in lost productivity. The numbers were based on the last major tube strike to hit the capital, the shutdown of 2007. LCCI, working with ComRes, surveyed over 300 London-based firms to derive an estimate on the impact of the strikes on the British economy.
Is the cost of the strike’s economic impact accurate?
As a counter-point, several academics have questioned the accuracy of the costs to the economy. Alf Crossman, an industrial relations expert, went on to claim that LCCI’s figures were “plucked out of thin air.”
In an earlier report, LCCI had claimed that strikes had cost UK economy £1 billion between 2005 and 2011. Academics have also questioned the methodology used and demanded more transparency in order to better gauge economic impact. Experts said that business interest groups tend to exaggerate economic impact under such circumstances.
Whether or not the numbers add up, it is undeniable that the strike has left London debilitated. We can only hope that the dispute is resolved before the strike returns for its second instalment next week.
Until then, London’s public transportation misery looks set to continue.
Has the London Underground strike affected your business operations? Tell us how in the comments below.
<Principal image courtesy CGP Grey/Some rights reserved>