London faces big monetary harm from rail strikes

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The series of August rail strikes that began on Saturday will hit London with a massive financial hit. That’s the prediction of City analysts, who have been studying the fallout from industrial action by a number of unions, including RMT and ASLEF, while others wait in the wings. Strikes are planned for national rail, overhead and metro services in the coming weeks, starting on Saturday (13 August).

The disputes that paralyzed Britain’s rail network have also hit London. However, the strikes in August will be worse – having also spread to the Tube, on which much of London’s economic activity depends. A solution to any of the disputes seems unlikely in the short term.

Thirty million pounds a day

Financial experts from the City of London believe that London alone will suffer a massive financial hit from the rail strikes in the second half of August. They believe the final bill, measured in lost economic activity, will be around £120m. That equates to around £30m (€35.4m) for each of the four planned days of action in August.

RMT sticks will stop most services in London including the new Elizabeth Line (Matt Buck, Creative Commons)

The train drivers’ union ASLEF (originally known as the Amalgamated Society of Locomotive Engineers and Firemen) will take action this Saturday. Members of this union will divert their workers from a number of rail companies, including the London Overground – the integrated underground railway that serves many of the capital’s suburbs. National rail services will also be affected in Southeastern and Greater Anglia, both of which operate key commuter routes from London terminals.

Transport misery for commuters

Later in the month, on Thursday 18th and Saturday 20th August, members of the RMT will leave most of the network and cause even more widespread disruption. In particular, the union will call out its members in the signaling classes at Network Rail, the infrastructure manager. Without the signal heads, the safe operation of passenger, freight or maintenance trains will be a major management challenge. However, the most devastating disruption for Londoners will come on Friday 19th August when RMT members will cease work on both the overground and underground networks.

The consequences of the staggered actions are obvious. The process of preparing for strike action and recovering afterwards will add about an extra day in total to what one London newspaper described as “transport misery for commuters”.

London back in the forefront

Speaking to the London Evening Standard, Simon French, a senior financial analyst at City investment bank Panmure Gordon, said London will take the brunt of the financial hit in a series of disputes that could hurt the national economy by up to £475m ( 561 million euros). London could shoulder up to a quarter of the total burden, he argues, due to the huge share of economic activity generated in the capital and its over-reliance on rail.

These strikes could be a Waterloo for the unions or the government, but the casualties will be the commuters (Foulger Rail Photos, Creative Commons)

Meanwhile, UK Transport Secretary Grant Shapps has fiercely hit back at the unions. He has maintained his robust stance, furiously accusing unions of engaging in cruel strikes. He said they were “intent” on causing as much misery as possible for taxpayers and commuters. Government sources claim that each UK household has already contributed £600 (€840) to secure rail jobs during and after the pandemic. Shapps said union bosses appeared to have short memories and retaliated for this act of good faith by ruining the plans and working lives of millions.

For their part, unions have struggled to point out that just a few months ago their members were being commended for keeping the economy on track. Now both sides seem to have derailment in mind. London is not at the forefront for the first time.

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