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#1 Recent record snow could cost UK economy over £1 billion
02-03-2009, 05:46 PM
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- Jan 2009
- Central Florida
Snow could cost British economy billions
A heavy snow storm that brought havoc to the UK will cost the country's already recession-hit economy up to 3.5 billion pounds ($5 billion), according to Britain's Federation of Small Businesses (FSB).
AFP- The snow storms which paralysed Britain may have cost businesses already battling the credit crunch up to a billion pounds, experts said Tuesday -- and more blizzards could be still on their way.
The 10 centimetres (four inches) of snow which coated London, Europe's financial capital, Monday virtually shut down air, rail and road links, forcing thousands of workers to stay at home in the worst storms in 18 years.
With Britain in recession and facing what the International Monetary Fund (IMF) says will be the worst slump in the developed world, the rare cold snap risks putting many struggling businesses into the deep freeze for good.
The Federation of Small Businesses, which represents over 200,000 businessmen, said one in five people did not make it to work Monday, costing employers up to 1.2 billion pounds (1.3 billion euros, 1.7 billion dollars).
Spokesman Stephen Alambritis said if the bad weather continues this week, that could rise to 3.5 billion pounds.
Forecasters say Scotland, south Wales and parts of southern England will bear the brunt of the snow in the coming days. It has now stopped snowing in London.
The bad weather also hit other European countries including France, Italy, Switzerland, Belgium and Spain.
Douglas McWilliams, chief executive of the Centre for Economics and Business Research, suggested several thousand firms could go bankrupt after the snow in Britain, especially if it lingers.
"If it leads to delayed payments, the combined hit on profits and cashflow could send many businesses who might be close to the brink into premature bankruptcy," he told the Guardian newspaper.
"Many are in retail and construction, sectors likely to be most affected by snow and transport disruption."
But he added the cold weather could have an upside for some sectors.
"Consumers spend more on heating and on warm clothes, and any accidents or structural damage leads to increased spending on repairs," said McWilliams.
Howard Archer of analysts IHS Global Insight warned: "Any disruption to business is the very last thing that the UK economy needs in its current extremely weak state."
Business leaders have criticised officials in London and southeast England for not doing more to prepare for the snow, despite forecasts predicting a deluge.
David Frost, director-general of the British Chambers of Commerce, said images of snowbound Britain were embarrassing abroad.
"All the European channels were showing images of London at a complete standstill, which was not a very positive image for the UK," he told BBC radio.
"I wonder whether we have become a bit too complacent... when something like this does happen, we are caught very much on the hop."
London Mayor Boris Johnson was criticised by his predecessor Ken Livingstone after the widespread failure of the city's public transport system Monday.
Even the city's iconic red buses, which stayed on the road during World War II German bombing raids on London, failed to run for the first time in 100 years.
British television ran pictures of bus drivers enjoying snowball fights instead.
Johnson blamed the "wrong quantity of snow" for the problems and told BBC radio that "unleashing a 12-tonne bus on to heavily packed snow or ice" would risk "turning it into a lethal weapon".
But Alambritis urged him to consult his counterparts in cities like Moscow and Vancouver on keeping public transport on track despite snowfalls.
"We need this debate," he said. "One of the world's biggest economies should not be grinding to a halt, even if it is only once every 10 years."
From France24 (includes video)..."Because we're a great nation, our challenges seem complex; it will always be this way. But as long as we remember our first principals and believe in ourselves, the future will always be ours." -Reagan
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