Businesses across the South West of England may relocate further north because the floods have made it “too difficult” for them to function, trade leaders have warned.
The concerns came as Network Rail pushed back by a month the date it hopes to finish repairing a crucial stretch of railway in Dawlish in Devon – a delay that could cost the local economy up to £300m in lost business.
Plymouth Chamber of Commerce chief executive, David Parlby, said he estimated that the suspension of the line – an important link between London and the far South West – is costing Plymouth more than £1m a day, as businesses find it harder to meet contacts and freight deliveries are disrupted.
The hit to the 80,000 companies operating across the South West is likely to be between £5m to £10m a day, he said.
But of greater concern to Mr Parlby is the broader damage the floods could inflict on business in the longer term, as customers lose confidence in the region.
“My big worry is the perception that the rest of the UK has about the South West’s ability to do business. There is a risk that it will become somewhere people think is difficult to get to and that business will be less likely to invest here,” said Mr Parlby.
“It is possible that businesses will think it is too difficult here and relocate further north. The majority of businesses around Plymouth say that, with the rail closure, they are finding it difficult to win new work,” he said.
The flooding also threatens the tourist industry. David Force, of the Dawlish Chamber of Trade, said: “The delay in repairs is very sad. I worry on behalf of the traders who look forward to getting the tourist season off to a good start around Easter.
“If there are further delays it will put a lot of pressure on shops. I wouldn’t be surprised if some went to the wall, a few are already sailing close to the wind. Dawlish is getting a lot of bad publicity.”
Network Rail yesterday postponed completion of the rail link’s repair from mid-March to mid-April. However, flood victims were given a boost when David Cameron said that anyone forced to leave their home because of the crisis would be exempt from council tax during their exile. The Government has set aside £4m to fund local authorities to cover the cost of the unpaid tax.
Meanwhile, in Surrey, the county’s first flood-related burglary was reported at a house in Staines, following rumours of looting for several days in the worst-hit areas. Personal documents were stolen in a break-in thought to have happened on Friday.