Sunday, 27 October 2013

What Ineos tells us about power in Britain today.

This week’s events reveal all we need to know about where power lies in Britain today, and it is frightening.

Jim Ratcliffe’s decision not to proceed with the closure of the Ineos Petro-chemical plant following the workforces’ acceptance of his ‘recovery plan’ has been variously described as another illustration of the lack of union power and influence.

The real story of Grangemouth is that it was Government that was powerless to prevent one individual deciding the fate of a strategically vital national industrial asset, its1,300 strong workforce, and thousands more workers besides, and the fate of a local community.

Despite all the cajoling of Alex Salmond, Ed Davy and Alistair Carmichael, it took the Ineos workforce and their union Unite to take the decisive step that made it impossible for Ratcliff to walk away as he was determined to do just two days previously. It is beyond belief that one of the supposedly most powerful nations on the globe was incapable of stopping the closure of the Grangemouth plant.

The closure of a community centre in Grangemouth would have required a more extensive due process, and greater transparency and accountability than was involved in the decisions to close a vital industrial facility.

Far from being a crisis for the trade union movement, this is a crisis for democracy, political and industrial democracy.

When a union, on behalf of a workforce, and an employer enter into a collective agreement it is a form of industrial democracy or, although in no sense equal, of workplace power sharing. With it comes a responsibility on both sides to negotiate to resolve differences and, on union members, a legal requirement to demonstrate through a secret ballot that there is support for any industrial action proposed if agreement cannot be reached.

It has been lost amongst the many other issues involved at Ineos that the ballot of Unite members had a turnout of 86%, exceptional by any standards, with 82% in support of strike action and 92% in support of action short of strike. Implicit in this legal requirement on the union to ballot is the expectation that the employer will recognise its outcome and the strength of feeling it demonstrates and respond accordingly.

Despite voluntarily entering into a collective agreement with Unite, Ineos simply refused to negotiate at every turn, issued a take it or leave it ultimatum and, its response to the outrage of its workforce at the treatment of one of their colleagues and the rejection of its ultimatum was to shut the plant.

It has been suggested that the level of investment proposed by Ineos at Grangemouth justified its actions. The company has presented this as if Jim Ratcliffe intends to write a personal cheque for the £300m involved.

The truth is that, as is the way with private equity companies, the money will come from the markets not from earned income. As Ineos is so highly levered it needs to use earned income to pay the interest on its debt. New borrowing for Grangemouth demands the minimum of lender risk. That risk has now been transferred in large part to the Scottish and UK taxpayers and, given the sacrifice they made to keep the plant open, the workforce.

It is important to look to the future and to the success that we all know the Grangemouth facility will be. But we cannot ignore the fundamental issues thrown up in the last week about where power should lie and how the will of the people in a democracy should be exercised.

The Scottish Constitutional debate, the debate about where power should lie and why, will be of little real relevance if Government, wherever it sits, does not have the power to prevent private equity capital threatening the stability of a country’s economy, or a workforce is unable to influence the actions of an employer.

Grahame Smith STUC General Secretary

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