Sunday, October 27, 2013

Retreat at Grangemouth is Dangerous for All

And that is called paying the Dane-geld;
    But we’ve proved it again and again,
That if once you have paid him the Dane-geld
    You never get rid of the Dane.
Rudyard Kipling 
THE 11th-hour surrender deal agreed by my union at Grangemouth undoubtedly represents a blow not just to the workers there but to those throughout Scotland and Britain.

Responsible for a vital part in Scotland's industry and economy, the Grangemouth workers were among the best-paid, and well-organised. Unite is the biggest union in Britain, and under Len McCluskey's leadership it has advanced to the fore not only of workers' struggle to defend their rights and living standards but of the fight for working-class politics in the labour movement.

Threatened with closure of the Grangemouth refinery and petrochemical plant by a billionaire capitalist, Jim Ratcliffe, sitting on his yacht off the South of France, McCluskey and Unite have agreed to a three year wage freeze, which amounts to a pay cut as inflation continues. They have surrendered the final salary pension scheme. And they have given up facilities for union convenors and the right to strike for three years, so the Ineos company management can resume attacking workers' rights and jobs without worrying about resistance.

Trivialising this episode as just another union "sell out" or blaming Len McCluskey just to score points in Facebook discussions hardly bears up to the seriousness of the issues. But it would be foolish to claim this as a victory.

As one of Len McCluskey's critics from the Left (he still has opponents on the Right) notes: "On Friday 25 October the workforce cheered the announcement of a deal that will keep the plant open. That was a natural feeling of relief but it was hardly an endorsement of the terms or the actions of their union’s leaders. Their sense of relief will be short-lived".

 "This defeat without a fight – the very worst sort of defeat – gives a green light to every boss, CEO and manager in Britain to go on the offensive. If even an exceptionally skilled workforce, like the one at Grangemouth, and a mighty union like Unite with its left talking general secretary, can be forced to eat humble pie, then aggressive managers everywhere will be tempted to follow suit." 
 Comment by Jeremy Dewar, on Jerry Hicks' blog. 

Writing from a very different angle, Iain McWhirter in the Herald agrees:
' THE spontaneous cheers of the Grangemouth workers on Friday at the news of their capitulation said it all.

This has been one of the worst industrial relations disasters of modern times and has disturbing implications for trade unionism, the Labour Party and Scotland. The workforce only narrowly escaped with their jobs, but had to accept all of Ineos's terms - a promise not to strike, a three-year wage freeze, zero bonuses, the end of final salary pensions. It was game, set and match to private equity.

The result will have been noted by every industrial employer in Britain, as the highest-paid and best-organised (in a trade union sense) industrial workers in Scotland have been humbled. Indeed, at times Grangemouth felt like a speed-dating version of the miners' strike.'

Grangemouth bailout: Did Ineos screw the taxpayer of £134million?

ANALYST Richard Murphy is baffled by the company's books and he revealed to the Record that the company actually made £7million in profit last year.
Newspapers and politicians who like to accuse unions and their members of "holding the country to ransome" were a bit more restrained in commenting on Ineos and Jim Ratcliffe doing just that. Nobody demanded that Ineos, a private equity company which became Britain's biggest chemical firm and biggest private company, and moved its HQ to Switzerland to avoid tax, should open its books. But both City commentators and government officials wondered about its deals and accountancy techniques. Not least accountants hired by Unite.    

"Rather than losing money, as the company claim, the chemical plant at Grangemouth delivered £7million in profits last year, analyst Richard Murphy told the Daily Record.
His claims fuelled speculation that Ineos used smart accounting techniques to paint a bleaker
future for the plant and secure taxpayers’ cash.
Murphy said the plant made £6million profit the year before, even after a pension fund shortfall was factored in.
Ineos claim it loses £10million a month.

Murphy, of Fulcrum Chartered Accountants, studied the Ineos accounts on behalf of the union Unite. He says the plant was making a fortune until Ineos apparently set out to make it appear loss-making.
He said Ineos, unlike any other company, decided to factor in their investment in the plant as a loss.
Yesterday, Treasury officials involved in negotiating a £125million infrastructure loan to Ineos said they had to ask for more information from the company over the complex financial structure.
The Scottish government have also chipped in with £9million of grants, making a total of £134million.
Ineos appeared to have presented their accounts in a way which emphasised their need for an urgent injection of finance to underwrite future infrastructure costs."

With Grangemouth there was more than the 800 jobs of  refinery workers at stake. As Jeremy Dewar notes:
"Grangemouth supplies 70 per cent of Scotland’s petrol pump supplies as well as a considerable amount in the North of England and the North East of Ireland. It processes 200,000 barrels a day and powers the Forties pipeline which transports a third of the North Sea’s output. At least 10,000 Scottish jobs depend on Grangemouth, which accounts for £1 billion of trade and makes up 8 per cent of Scotland’s manufacturing output..
As McWhirter tells us, "Grangemouth is key to the North Sea's biggest oil field - the BP-operated Forties field 110 miles east of Aberdeen. Up to one-third of the North Sea's entire crude oil production is fed directly into the Grangemouth site. During the strike in Grangemouth in 2008, 70 North Sea platforms were forced to shut down or reduce production. It is hardly surprising therefore that BP - former owner of Grangemouth - was heavily involved in this week's rescue and helped underwrite the new business plan."

There was also a complex political dimension to this battle. While the workers were still locked out and Ineos was pleading poverty, Labour MP Michael Connarty offered to take them at their word. "I would buy the plant for £1!", he told a rally outside the gates, adding that if Ratcliffe got a pay freeze and government subsidy he would be printing money.

But Ineos had already been making its own use of the Labour Party connection. In the run up to the attack on pay and pensions they used the row over Falkirk Constituency Labour Party to victimise Grangemouth convenor Stevie Deans, who is also chair of the CLP, and was accused of encouraging Unite members and friends to join the Labour Party. (A serious offence!) Why should a Swiss-based company be concerned with Labour's selection processes?  One might as well ask who told Ed Miliband that he should ask the police to investigate whether there had been a Labour Party rule infringement?  As it was there were no charges to answer, and after Unite balloted members for strike action Stevie Deans was reinstated.

But Ineos had got its diversion, and opportunity to probe the union's defences and undermine its solidarity. And now, as workers return to a no strike deal, the Murdoch press heralds a renewed witch hunt against Deans in the Labour Party.

A lot of people were quite rightly raising the call to nationalise Grangemouth. With so much public money going in, and a private company ready to close down Scotland, why not? But who would do it? If the Con Dem coalition were unlikely to nationalise, how about the Scottish government? I'm not sure what powers it has, but has it the will-power?

With the independence referendum coming, and the Scottish National Party(SNP) concerned to fight off any challenge from Labour (to whom it has just lost the Dunfermline by-election), would its leader act boldly to save jobs and the Scottish economy, not to mention the SNP's radical and progressive image?

 Salmond spoke not about nationalising but about finding buyers for Grangemouth.  (Apparently the Chinese already have a share).
"At the same time, Salmond was on the line to Unite general secretary Len McClusky trying to persuade him that industrial madness had afflicted his Grangemouth office and that he had better have a word with them. The consequences might not only be a collapse of union membership - that's happening anyway - but serious damage to the Labour Party in Scotland. Johann Lamont is a Unite member and the union backed her leadership campaign in 2011.

Some Labour people might have been content to see the plant close, the better to damage Salmond, but the people of Scotland were looking for a solution, not another 1980s industrial horror show. This alerted Labour leader Ed Miliband, who has of course been in dispute with Unite over the Falkirk selection fiasco.

There were also direct appeals to the Grangemouth workers who had been divided on the action, about half having voted against it. By Wednesday night, confident of the workers' agreement, Salmond had persuaded Ratcliffe and brokered a deal which involved Ineos reopening the plant, investing £300m (most of which was effectively underwritten by the government) to provide a 20-year future for Grangemouth as a global player turning shale gas from America into plastics."
So now we can better understand Len McCluskey's reference to the "security of Scotland" when he announced his surrender plan.

Could there have been another way? It seems to me that in the present political situation, workers have to be prepared to occupy and take over plants, offices, banks and anything else, rather than being advised to wait passively for government -and a hostile government at that - to nationalise. At the same time I'm aware that's not easy, and saying "just like UCS", referring to an occupation more than thirty years ago in pre-Thatcher Britain, will not suffice to give confidence.

According to Jerry Hicks' supporters, "Unite could have altered the whole history of the dispute by organising the immediate occupation of the plant as soon as the lock out was threatened in mid-October. Its members would have been called on to close down the refinery; with union backing they could have refused and the workforce seized control of the equipment and the dispute.

Flying pickets and solidarity action around Britain’s other refineries would soon have had an effect in the petrol stations across the country. From a position of strength, the  British and Scottish governments should have been faced with the demand that Grangemouth be nationalised ..."  
Just like that?

Even if Len McCluskey had felt able and willing to call such action, there is no guarantee it would have been supported. As Jeremy Dewar notes elsewhere the union was only able to get 60 per cent support for opposing the Ineos plans.

Dewar speaks of the need to build a rank and file movement and "wrest control" of the union, but I think focussing on elected officers (at a time when many union reps are victimised), official's salaries and leadership ballots, even if you are right, is not confronting the all-round political class consciousness which we need. Not that the political 'left' as it manifests itself these days is that much help.   

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