Rail bosses are calling on unions to accept almost 2,000 job losses, as the two sides seek to overcome their differences in talks after the biggest transport strike in a generation brought much of Britain grinding to a halt.
With prime minister Boris Johnson calling on the sector to modernise or “go bust”, the RMT rail union and employers will resume negotiations on Wednesday in a bid to avoid more strikes this week.
Industry executives said infrastructure owner Network Rail is set to offer a 3 per cent pay increase, or more, if savings can be made through modernisation, with train operating companies set to offer a similar deal.
But Network Rail also told unions it would formally start a consultation on 1,800 job losses and “dumping outdated working practices”.
Although the public body said it hoped the “vast majority” of job losses could be voluntary, the two sides are still far from a deal. Mick Lynch, the RMT leader, said his priority was a settlement ensuring no compulsory redundancies.
Passengers stayed home after warnings to make only essential trips during Tuesday’s strike, which involved 40,000 employees at Network Rail and staff at 13 train operating companies. Only around one-fifth of mainline trains were running and many lines were closed entirely.
Services are expected to be disrupted until well into Wednesday morning as the network restarts. Further strikes are planned for Thursday and Saturday.
Even if a deal is reached and the action called off, the rail industry said there would still be disruption on Thursday as the industry resets.
The strike has already hit retailers hard, with footfall across all UK high streets down 8.5 per cent compared to last week, according to data from Springboard, and a 27 per cent drop in central London.
A Network Rail executive said the two sides came close to a last-minute deal late on Monday, but added that the RMT did not go far enough on modernising maintenance practices in return for a higher pay deal.
The RMT leadership is pushing for pay rises of 7 to 8 per cent to compensate for inflation that is expected to hit 11 per cent this year. But Johnson said on Tuesday that pay discipline was needed to limit inflationary pressures, while arguing that rail modernisation was essential.
The prime minister called for “union barons to sit down with Network Rail and the train companies” to agree to reforms such as phasing out ticket offices and said the country had to “stay the course”.
He added: “If we don’t do this, these great companies, this great industry, will face further financial pressure, it will go bust.”
The leader of the TUC has warned that strikes could spread to other industries, and on Tuesday the Communication Workers Union said it would ballot members over industrial action at Royal Mail in a row over pay.
While the government has refused to negotiate directly with the RMT, in effect ministers control the industry’s finances.
Network Rail is state-owned, while the Department for Transport sets annual budgets for the services run by private train operating companies under coronavirus pandemic-era changes.
Business leaders warned the strikes would hit the sectors hardest that were just recovering from the economic impact of Covid-19.
The strike means more people are likely to stay at home during the week than at any time since the last pandemic lockdown, delivering another hit to businesses in city centres.
But the Covid-driven adaptation to remote working has meant that the industrial action is not as disruptive as previous stoppages.
Government figures showed traffic flows were similar to the previous Tuesday, below what would be expected during a train strike.
“Work from home has blunted the effect of day one,” one government official said.
Additional reporting by Emma Dunkley and Daniel Thomas