Tube strike: how much will it cost London businesses?

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Newspapers will be full of pictures of frustrated commuters in London today, as a 24-hour Tube walkout leaves many facing arduous journeys by bus, taxi or on foot to get to work. For businesses, staff lateness and absence is costly in terms of lost productivity. Shops in the capital also complain that they will lose valuable custom during a busy shopping season.

But what is the cost to the economy of a one-day Tube strike?

Back in August 2013, a report produced by the Conservative Party bloc on the Greater London Authority claimed that 30 days of Tube walkouts over six years had cost the economy around £1bn. The paper claimed the figures were based on a 2007 figure for an average daily loss of £48m, and so "the real figure is likely to be much higher".

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How much higher – £300m? That's the figure quoted by the BBC from a report by the Federation of Small Businesses as the cost of a one-day walkout in July and is "enough to employ a single Tube driver for the next 6,000 years".

Both of these figures are contentious, however. The Daily Telegraph notes the Conservatives' estimate was based on a study by the London Chamber of Commerce of 315 firms about lost productivity and that the body no longer uses the estimate. As for the £300m claimr, that came from a "snap poll of 627 small business owners extrapolated for the 800,000 businesses in the capital" and so it is similarly not the most robust of estimates.

The paper cites a much lower cost estimated by think tank Cebr, which has suggested a figure of £10m a day. This is based on a forecast of economic output in London of £318bn per year, or £1.03bn each working day, and a guesstimate that the value lost is only around one per cent of this in an age where remote working is prevalent. It said in a report last year that the £48m estimate was based on a five per cent hit to output, "which seems way too high".

For retailers reliant on people physically being in London, however, whatever the overall cost they will probably have to contend with significant lost business today. City AM says research from the British Council of Shopping Centres (BCSC) found that on the day of the last strike in July, London shopping malls suffered a nine per cent drop in visitors compared with the same day in 2014.