Tube strikes: Sadiq Khan urged to compensate hospitality sector
Mayor of London Sadiq Khan has been told to ease the financial burden on the hospitality sector as firms face the crunch of tube strikes.
Khan, who was criticised for his absence as the strikes got underway, has been urged to give the sector a “rent and rate holiday” so they can weather the strikes.
The calls, from tax and business advisory firm Blick Rothenberg, follow forecasts that the Rail, Maritime and Transport’s (RMT) members strike would deliver a £230m hit to the capital’s economy.
“Many hospitality units are in Transport For London (TFL) property and Sadiq Khan should give them a rent and business rates holiday for the strike period if they are in affected postcodes,” Andrew Sanford, partner at Blick Rothenberg, said.
He added: “At a time when owners of small hospitality businesses are working longer hours as they can ill afford extra staff, the union demands of a reduced working week may garner little favour.”
On Tuesday – after three days of disruption – the RMT trade union threatened to take action on the Elizabeth Line.
It follows tube drivers taking industrial action from Sunday over the working hours of union members, who enjoy a salary of around £65,000, as RMT’s new boss Eddie Dempsey demands a 32-hour week.
Hospitality on the brink
The fresh blow for hospitality comes as the sector battles with rising costs over the last year.
Sanford said: “The hospitality sector has been hit by rising Employers National Insurance Contributions (NIC), the cost-of-living crisis and increases in the living wage. It can ill afford a week of negligible footfall caused by these strikes without getting some form of support.”
Chancellor Rachel Reeves’ hike to NICs in the Autumn Budget has stung the sector, with figures last month showing one in five firms had no cash reserves left after the tax raids.
The hospitality industry, which relies heavily on low-skilled workers, has been especially exposed to the government’s decision to sign off an above-inflation increase to minimum wage at its maiden Budget last October.
With the rising costs and expected low footfall from strikes, Sanford said firms were facing the decision whether to “close for the week to try and preserve cash”.