News

December 02, 2011

Public sector strike “irresponsible”, say business groups

The public sector strike was “irresponsible” and hit small firms hardest, business groups have claimed, following the mass walk out of nearly two million workers on 30 November.

Said to be the biggest industrial action in decades, the public sector strike was triggered over pension changes and affected schools, hospitals, government departments and councils across the country. Around 60 per cent of schools were forced to close, while NHS managers estimated that some 6,000 out of 30,000 operations had been cancelled.

HM Treasury ministers put the cost of the strike to the private sector at £500 million, but business groups warned that it was the smallest firms which would have suffered disproportionately.

Andrew Cave, chief spokesman at the Federation of Small Businesses said the strike “would clearly have a negative effect on businesses”.

“It’s inevitable that small-business employers, who typically employ around four people, will have been badly affected by staff absence, caused by the closure of schools and people unable to get to work,” he said.

“Only time will tell as to the real cost of the strike, but you’ve only got to look at the impact of something like the Royal Wedding, where costs easily soared into the millions for firms because of lost productivity.”

Katja Hall, chief policy director of the Confederation of British Industry, agreed that the financial fall-out was potentially severe. “Not only was this strike a major headache for parents whose children’s schools closed, it will cost the economy dearly,” she said.

While the Prime Minister dismissed the walk-out as a “damp squib”, director general of the Institute of Directors Simon Walker warned that the economic effects could be wide reaching. “Union activity is having a substantial negative impact on international perception of the UK as a place to do business,” he said.

John Longworth, chief executive of the British Chambers of Commerce, also branded the action “reckless and irresponsible” for harming the UK’s reputation as “a destination for global investment”.

However, Brendan Barber, general secretary at the Trade Union Congress sought to downplay the strike’s impact on business and the economy. “While the strike obviously caused disruption, the figures suggested by ministers are fantasy economics,” he said.