THE boss of Grangemouth petrochemical giant Ineos secretly lobbied George Osborne when he was Chancellor of the Exchequer to muzzle the unions, cut company taxes and back fracking.
Emails and briefings released under freedom of information law reveal that Jim Ratcliffe privately met Osborne in 2013 to propose a series of legislative measures to curb unions’ ability to strike and to reduce workers’ pensions. The aim was to shift the balance of power from unions to employers.
The revelations have prompted anger from unions, condemning “fat cats who only care about their own short-term financial interest.” Ineos, however, said Ratcliffe was “well placed to comment on the collapse of UK manufacturing”.
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Documents disclosed by the Treasury include a 100-page presentation by Ratcliffe that was given to the Cabinet Secretary Sir Jeremy Heywood in May 2012. It was then discussed with Osborne at a meeting on February 18, 2013.
In the presentation Ratcliffe described worker pension schemes as a “national disaster” which were costing companies billions of pounds. He urged the government to “remove the right to strike directly or indirectly” on proposed pension changes.
“Unions can strike for any reason any time”, Ratcliffe argued. He suggested a series of reforms to restrict strikes, including more precisely worded ballots, new ballots for each phase of industrial action and outlawing picketing at shared sites.
“Tanker drivers should be allowed to picket at their tanker company head office, not at Ineos sites,” he said. He urged the government to “count days of material disruption as days of strikes – hence loss of pay”.
Ratcliffe contended that the UK was “disadvantaged” compared to other countries because of its position on pensions and unions. He highlighted that China had "no union or pension issues”, Germany had “OK” unions and the US had a “very flexible labour market”.
An Ineos manufacturing executive, Hans Niederberger, was quoted by Ratcliffe as describing the influence of trade unions at Grangemouth as “far too big”, adding: “Sometimes it looks like the unions are leaders of the site.”
Ratcliffe suggested reducing the rate of corporation tax for manufacturing to 12 per cent, and cutting the higher rate of income tax. Switzerland, where Ineos is based, had the advantage of “very low corporation tax”, he said.
Ineos briefings for Ratcliffe’s meeting with Osborne, which were obtained by the environmental group Friends of the Earth, stressed that shale gas was “an opportunity for manufacturing”. The company is bidding to frack for the underground gas in Scotland and the north of England.
Ineos also argued that moves to phase out the carbon pollution that disrupts the climate would be damaging. “Decarbonisation policies will cause energy prices to increase dramatically,” it said. “This will undermine economic growth.”
The proposed agenda for the meeting was “only indicative”, according to an email to the Treasury from a public relations firm representing Ineos. “Jim is very much his own man, and intends to take a flexible conversational approach on the day,” it said.
Eight months after Ratcliffe met Osborne Ineos shut down its petrochemical plant at Grangemouth in the midst of a fierce dispute with the Unite union. The plant was re-opened after Unite agreed to no strikes and a pay freeze for three years, along with pension reforms.
Unite’s Scottish secretary, Pat Rafferty, recalled that unions were sometimes wrongly accused of holding the country to ransom. “These emails show who really has the power to hold the country to ransom – the big businesses who seem to hold politicians in the palm of their hands,” he said.
“These emails shine a light on the shadowy anti-democratic links that exist between government and big business.”
He pointed out that the UK Government passed legislation curbing union rights three years after Ratcliffe met Osborne.
According to Dave Watson, Scottish organiser for the trade union Unison, the UK had some of the weakest employment laws and the lowest pension provisions in the western word. “In part, because rich financiers like Ratcliffe are creaming off the wealth of this country, generated by the very working people he wants to muzzle,” he said.
"The Government should listen to trade unions who represent the people who live and work in this country and play by the rules. Not the fat cats who only care about their own short-term financial interest.”
Mary Church, head of campaigns at Friends of the Earth Scotland, said that the “dirty lobbying secrets” undermined Ineos’s argument that fracking would protect jobs. “They make it clear that the company's motives are far more profit-driven,” she said.
"In lobbying to suppress union rights, cut corporation and higher-rate income tax, billionaire venture capitalist Ratcliffe demonstrates substantially more concern for his own pocket than the conditions and wellbeing of workers at his plants here in Scotland.”
Richard Longden, communications manager for Ineos in Switzerland, said that the company had not seen all the released documents. The emails appear to have been written by an external adviser to Ineos, he said.
But he insisted that many of the overall themes had been publicly advocated by Ratcliffe for several years. “The information submitted highlights the rapid decline of UK manufacturing and the steps that should be considered to reverse the trend,” Longden said.
“Jim Ratcliffe has consistently been a champion of British manufacturing in support of skilled British jobs. He has often expressed his views openly on the importance of the sector to the UK economy as he has watched its rapid decline. Given he runs the UK’s largest petrochemicals company, he is well placed to comment on the collapse of UK manufacturing.”
Longden argued that Ineos had had to take action to protect Grangemouth. “We were left with no option but to modernise working practices and find new investment to secure essential raw materials,” he said.
“As a consequence of actions taken, the site is once again profitable with a bright future, providing skilled jobs and financial security for thousands of people across the central belt of Scotland.”
Many of the arguments that Ineos had made were now being acted on, he added. “Most UK companies have abandoned their defined benefit pension schemes, corporation tax has been reduced and the abuse of union power -–as the recent rail strikes have shown – continues to be actively debated.”