National postal strike will cost Britain £1.5bn
A NATIONAL walkout by thousands of postal workers will strike a £1.5billion blow to the vulnerable UK economy by crippling mail deliveries.
The massive financial impact is revealed as Royal Mail staff in London prepare to cause fresh misery to homes and businesses with another 24-hour strike tomorrow.
Union officials are still fine-tuning details of a national strike by 120,000 Royal Mail workers.
But the Centre for Economics and Business Research estimates it will cost the UK around £1.5billion if it lasts for five working days.
The announcement of the strike dates is imminent.
Internet retailers will bear the brunt of the losses and suffer an estimated £220million hit because of the cost of switching to other delivery firms and money lost to refunds.
The UK economy is expected to lose around £300million for every working day the strike drags on for, experts at the Centre predict.
Its report, commissioned by online shopping site Kelkoo, warned a strike of three months would wipe out Royal Mail.
The report says: “If the strike were to continue for as long as three months, we anticipate that the cost would fall to close to zero as businesses made alternative arrangements and the Royal Mail in effect ceased to exist.”
The Royal Mail suffered another blow when department store John Lewis yesterday became the latest major retailer to confirm it had switched its delivery business to rival firms.
Marks & Spencer said it used a number of different delivery firms, including Royal Mail, and could switch between them when necessary to protect customers from disruption.
The report says delayed cheque payments could prove fatal to some recession-hit small businesses. Smaller firms will suffer most from a national strike because 98 per cent of them use the Royal Mail, compared to 70 per cent of larger businesses.
Kelkoo managing director Bruce Fair said: “The timing of the strike beggars belief. In one fell swoop it threatens to spoil the beginnings of the retail sector’s financial recovery, increase prices for cash-strapped consumers and cause a further backlog which already stands at some 30 million items.”
Communication Workers Union officials are expected to call for mediation to resolve the dispute over modernisation which affects jobs and pay after months of talks have failed to break the deadlock.
Royal Mail says it is trying to implement an agreed deal drawn up after the last national dispute in 2007.
