The crisis has become an opportunity for the rich to acquire more wealth and power
by Owen Jones
Sunday 27 October 2013
A Swiss-based private company has held to ransom not just hundreds of workers and their families, not just their community, but an entire nation. The Grangemouth dispute was not some parochial, localised affair, a potential tragedy for yet more livelihoods sacrificed on the altar of global capitalism. It wasn’t just that its closure would have had a shattering impact on the Scottish economy, as well as frightening implications for Britain’s fuel security. The whole episode raises again an age-old question, not whispered enough, let alone asked loudly: who runs Britain?
Inevitably, in a country with a media institutionally hostile to what remains the country’s largest democratic movement, Fleet Street has embraced a narrative of scapegoating trade unions and ignored the fact that Ineos is the secretive, largest privately run company that operates in Britain. Having fled Britain’s tax regime in 2010, Ineos is a corporate giant that has legally saved millions from the greedy clutches of schools and hospitals by operating in up to six tax havens.
It made up to $2bn profit last year, though the company is reportedly saddled with debts from its insatiable take-over bids. According to Ineos Chemicals Grangemouth Ltd accounts last year, sales had grown by more than 50 per cent, and there was a gross profit of nearly 20 per cent.
That’s not to say Grangemouth is not confronted with real problems: over the course of the past decade, North Sea gas arriving at the site has declined by 60 per cent. But it was ludicrous to suggest that labour costs – just 17 per cent of the plant’s total costs – were entirely responsible for Grangemouth’s plight. Workers had better pay and conditions here than elsewhere, it was argued: in modern Britain, that’s presented as an argument to trash them in an endless race-to-the-bottom, rather than dealing with the scandalous plight of other workers. With suggestions that Ineos had saddled external debts on the plant for tax purposes, there was clearly an overwhelming case for the plant’s books to be laid open and independently scrutinised, as well as for an HMRC investigation into the company’s tax affairs.
But this was not a company that wanted anything other than the Unite union to be comprehensively crushed. As crucial negotiations between Unite and the company were underway, Stevie Deans, the senior Unite convenor, was placed under investigation for issues related to Labour’s row in Falkirk. Unite had begged Ineos to negotiate at the Acas conciliation service, which Ineos stomped away from despite guarantees of no strike action. Indeed, in the end the workers didn’t strike, it was the bosses, who promptly shut the whole plant down.
And so the workers and Scotland as a whole had a pistol pointed at their head. Capitulate on our terms, said Ineos, or the plant will go. It could have blown away around 10 per cent of the Scottish economy, triggering economic ruin for entire communities dependent on the plants. More radical voices wanting the sort of occupation that the iconic Jimmy Reid led in the Upper Clyde in the early 1970s will have noted the cheers of the workers at the announcement that the site would be saved. They just wanted to keep their jobs.
Clearly such a strategically vital asset should have been removed from private control into public ownership. But London’s Tories – bankrolled by hedge funds, banks and asset strippers as they are – were hardly going to nationalise Grangemouth. Though the Scottish Government recently took over Prestwick Airport to save jobs, taking over Grangemouth was probably beyond its means even if it wanted to.
“There’s class warfare, all right,” said US billionaire Warren Buffett a few years ago, “but it’s my class, the rich class, that’s making war, and we’re winning.” It is a point underlined by this episode in Grangemouth. Since this economic crisis began, the business elite has used it as an opportunity to shift wealth and power even further in their direction. It is not just the fact of the surge in the fortunes of the top 1,000 wealthiest Britons since Lehman Brothers came crashing down, even as workers face the longest fall in living standards since the reign of Queen Victoria. The crisis has become an opportunity to further strip workers of security, rights and power.
Sound like a bonkers conspiracy theory? The business elite are entirely open about their aims. In a 2009 report entitled The Shape of Business over the next 10 years, the Confederation of British Industry – the main bosses’ organisation – called for businesses to use the economic crisis to create a so-called “flexiforce”. This would mean a “new employment model where the core of permanent staff is smaller”, with ever growing dependence on temporary workers.
And so the explosion of zero-hour contract workers, temporary workers and the insecure self-employed is not a passing side-effect of the economic crash. They are here to stay. It is being accompanied by Government attempts to tip the balance further towards employers, such as the assault on industrial tribunals. Trade unions have faced a battering over the past generation, but they have remained redoubts of strength that our business elite is determined to defeat.
So here is the choice that faces us. We can resign ourselves to vast swathes of our economy under the control of economic heavyweights, casually deciding the fates of entire nations from multi-million pound yachts. We can accept that the stripping of rights and security from working people is just one of those things, a fact of life like the weather. We can passively sit back as wealth and power is indefinitely shovelled in the direction of those who already have too much of it. Or we can start asking fundamental questions about how society is structured in Britain.
The power exercised by the likes of Jim Ratcliffe depends on our collective resignation, a sense of fatalism and powerlessness. Grangemouth could be a turning point, a catalyst for other employers to demolish what remaining power and rights working people have. Or it could be a moment where enough of us realise what is happening to modern Britain, and – in the finest traditions of this country – do something to challenge it.