Strike threats and Labour poll pledges have summoned the spectre of 1979
The South Western strike has greater potential for causing problems. It will cut off one of the main arteries into the capital for much of December. Added to engineering work planned at Paddington, King’s Cross and on the Eurostar route, there will be days next month when London is almost inaccessible by rail.
However, experts say the real danger from the strikes is the potential for contagion. With high employment and fewer options for hiring foreign workers, employers may find their ability to negotiate with workers is reduced. “The labour market is quite tight,” said Douglas McWilliams, deputy chairman of the Centre for Economics and Business Research think tank. “That increases the risk of industrial action. Companies want to buy their way out of trouble by paying extra.
“It’s a potential problem and it’s happening at a time when profit margins domestically are being squeezed.”
Senior business leaders feel the strikes might protect jobs in the short term, but will eventually damage the economy. “The jobs will go anyway if companies don’t remain competitive,” said the chairman of one of Britain’s biggest retailers.
The election has sharpened concerns over the impact of industrial action. If Labour wins, the dent to productivity caused by strikes, coupled with policies seen by many bosses as anti-business, could push the country into recession.
Among the proposals causing most concern are the imposition of a higher rate of corporation tax and plans for companies with more than 250 staff to transfer 10% of their shares to employees. The transfer proposal would mean about £300bn of shares being confiscated by the government.