Grangemouth: Gangster bosses and special measures

The Grangemouth capitulation shows the limits of trade unionism, writes Eddie Ford

There is no point in denying the scale of the Grangemouth defeat. Unite blinked on October 24 and the bosses got everything they wanted. Ineos, the Swiss-based company that owns the petrochemical plant, promised to make a £300 million ‘investment’ in the plant and in return the union leadership agreed to a pay freeze, a three-year no-strike pledge, the closing down of the final salary pension scheme, and harsher redundancy terms - not to mention changes to union arrangements on the site, including no full-time union convenors.

Yet only two days earlier the union had declared “victory” over Ineos when a clear majority of its members voted down the company’s very same “survival plan”. But Ineos responded by announcing that the plant would close and that triggered Len McCluskey’s humiliating climbdown.

Initially, the dispute was over the treatment - or mistreatment - of the Unite convenor, Stevie Deans, also chair of the Falkirk Labour Party, with the company accusing him of “inappropriate” use of company time by engaging in “political” campaigning. Presumably it is a terrible crime for a trade union official to do his job and, of course, the company bosses never engage in political lobbying or agitation.

Grangemouth processes 200,000 barrels of crude oil every day and supplies 70% of the fuel to Scotland’s filling stations. It is of vital importance to the UK economy as a whole, employing 1,370 permanent workers (800 of whom were directly affected by the dispute) and a further 2,000 subcontractors. Another 10,000 jobs depend on the site.

Billionaire stripper

Ineos claims it was losing £10 million a month at Grangemouth and has a pension fund which is £200 million in deficit and on the point of going bust - an unprofitable business. Not everyone is convinced though. Richard Murphy of Fulcrum Chartered Accountants, who studied the Ineos accounts on behalf of Unite, concluded that Grangemouth actually made a £7 million profit last year, even after the pension shortfall was factored in. He told the Daily Record that Ineos did something “unusual” in recording investment in the plant as a loss, leading him to suspect that they were using ‘creative accounting’ techniques to paint a deliberate bleak picture of the plant and thus secure taxpayers’ cash (October 25).

Whether true or not, and it certainly sounds more than plausible, the Scottish and UK governments held constant talks with Ineos and Unite throughout the dispute - the thought of Grangemouth closing must have kept Alex Salmond awake at night - especially now that the referendum campaign is up and running. Indeed, Calum MacLean, the Grangemouth boss, emphasised how Jim Ratcliffe - the billionaire majority-shareholder/owner of Ineos - had spoken several times to Salmond and ministers in London, as he debated whether to give up on Grangemouth or not. Obviously firm believers in socialism for the rich and naked capitalism for the poor, Ineos asked for assurances that its application for a £9 million grant from Edinburgh and a £150 million UK loan guarantee were “on track”. MacLean also refused to rule out limited redundancies at Grangemouth. Rubbing salt in the wound, Ratcliffe triumphantly declared the Unite capitulation as a “victory for common sense” and even thanked the union for its “dramatic U-turn”.

You should expect nothing else from an operator like Ratcliffe, who founded Ineos in 1998 and amassed his vast wealth by turning himself into a global asset-stripper - acquiring the nickname ‘JR’ (after JR Ewing, the manipulative and semi-sociopathic oil baron from Dallas). Ineos itself is the fourth biggest chemicals business in the world and is the largest privately owned company in the UK, estimated to have an annual turnover of $44 billion. Not doing too badly then. Never one for missing a trick, in April 2010 Ratcliffe moved Ineos’s head office from Hampshire to Rolle, Switzerland, to save the company £100 million a year in tax and VAT.

Almost inevitably, Ratcliffe owns two super-yachts. According to the 2007 Sunday Times ‘rich list’, his personal fortune came to £3.3 billion. But by 2010, thanks to the financial crisis, the poor man’s wealth was said to have plummeted to a mere £150 million. Not to worry though - Forbes calculates that as of March this year he is on the up again, being worth a more respectable £1.1 billion.1 Grangemouth workers, needless to say, are overpaid.

All in all, Ratcliffe is not the sort of guy who messes around or easily makes concessions - he always plays hardball, as the BBC’s recent profile revealed.2 In fact, a Unite official told the BBC Today programme that the Grangemouth/Ineos representatives acted like “1920s gangsters” - totally obdurate and intransigent. It is hardly surprising therefore that McCluskey collapsed and accepted the plan, “warts and all”, to use his own words.

What alternative?

Large sections of the left have torn into McCluskey. A typical response came from Workers Power, which condemned the Unite leader on the grounds that he “shamefully fled the battlefield”, when instead the union could have “altered the whole history” of the dispute by organising the immediate occupation of the plant with “flying pickets and solidarity action around Britain’s other refineries” - which would “soon have had an effect in the petrol stations across the country”.3 Similarly, Socialist Worker lambastes McCluskey for posturing “as a lion”, only to “turn into a mouse when the bosses cut up nasty”, when what was needed was to “occupy the plant instead of being held to ransom”.4 As for Jerry Hicks, runner-up to McCluskey in this year’s election for Unite general secretary, he angrily declared that Grangemouth had been “botched from the very beginning” and “ended in surrender” - though he thought McCluskey was a donkey rather than a mouse.5 He also argued, just like the Socialist Workers Party, that Unite should “end immediately its disastrous attempts” to reclaim Labour - castigating the union’s “infantile, unfunny comic capers of infiltration through recruiting members to the Labour Party”.

So what should have been done? The CPGB’s Draft programme (section 3.7) says that, when “faced with plans for closure”, we should raise the demand to “nationalise threatened workplaces or industries under workers’ control” - and under certain circumstances it would be a perfectly legitimate tactic for workers to occupy the workplace in order to back up this demand. Indeed, it would be a matter of pure self-defence.

Having said that, however, it is difficult to see how this could have happened on this occasion. As I understand things, the majority of workers cheered when they heard news of the settlement. We certainly need to appeciate that the Grangemouth workforce were unlikely to vote for an occupation, given that there had been no concerted campaign to win and prepare them for such a tactic. If they had been prepared to occupy and demand nationalisation under workers’ control, that would certainly have put enormous pressure on both the UK and Scottish governments. But that is to stray into counterfactual speculation. Therefore, whilst we can easily criticise McCluskey on this or that point, even his entire strategy - he is a left bureaucrat at the end of the day - it is equally fair to say that, given his political limitations, he was faced with a Hobson’s choice: continue to resist and risk the total defeat of the union, or temporarily retreat in order to fight another day.

And we have to ask what viable alternative is on offer from the likes of Hicks, the SWP, WP, etc? Precious little, if truth be told. Break the link with Labour? That would certainly strengthen the Progress faction and at last bring to fruition its long-term strategy to de-Labourise Labour. And, having waltzed out of Labour, the unions should do what exactly? Sign up to the pathetic farce that is the Trade Unionist and Socialist Coalition? A sad fantasy.

What we need to do is learn the political lessons of Grangemouth - posturing calls for trade unions to break with the Labour Party are more than useless. There needs to be a serious and patient struggle for genuine left unity, involving work both inside and outside the Labour Party. In fact what the dispute has done is highlight yet again the limitations of trade unionism, especially under conditions of economic stagnation - we can ignore George Osborne’s stupid prattle about Britain’s “unprecedented growth” in the last quarter, etc. Whatever some on the left might think, if things are bad for capitalism, that does not automatically mean that things are getting better for us - quite the opposite, if anything.

The obvious danger posed by Grangemouth is that it could be a prelude for more open and vicious attacks on the working class - the bosses thinking they have been given the green light. Look, they might say, our businesses too are ‘uncompetitive’ - therefore we need to attack the workforce in the same way that Ineos has successfully done.


Meanwhile, the rightwing press, the Tories and others continue to harass Labour over Falkirk. Keep stoking the anti-union fire. Hence the dramatic Daily Mail headline - “Did Unite tamper with grandmother’s statement? Key witness’s bombshell accusation in Falkirk Labour vote-rigging storm”.6 We read that a Lorraine Kane “triggered” a major probe into “alleged electoral corruption” when she revealed her family had been signed up to the Labour Party without their consent, refuelling claims that others had become members without their agreement in a bid by Unite to “manipulate” the selection process in favour of their candidate, Karie Murphy (who subsequently withdrew from the race for the sake of “reconciliation and unity”).

For the Mail, naturally, these latest stories “undermine” Ed Miliband’s reasons for closing the internal Labour Party investigation into Falkirk - which cleared Murphy and Stevie Deans of any nefarious activities. A police inquiry also found no evidence of anything criminal - how astonishing. But the Mail thinks the new allegations provide “shocking evidence” of the malpractices Labour investigators uncovered at Falkirk but have so far refused to publish. The Mail claims to be convinced that Unite activists “falsified” up to 112 membership documents by “forging” signatures, and “coerced” and “badgered” constituents into signing direct debit forms - what chilling villainy. In some cases, the article alleges, these Unite activists “even paid the joining fees themselves” to get more members on the books - which is perfectly legal under Labour Party rules, indeed positively encouraged historically.7

Joining the fun, The Sunday Times now says it has seen 1,000 emails to and from Deans - exposing “the plot” to “influence” the selection process. Its spin on the story also included extracts from the internal ‘secret’ Labour report, with officials saying - if we are to trust the veracity of the newspaper - that there were “deliberate attempts to frustrate” interviews with some witnesses. The emails suggest, in the opinion of The Sunday Times, that a letter “retracting” key evidence in the Labour investigation was not written by the witnesses, but by union officials and approved by Deans - who has almost become public enemy number one. To such an extent, in fact, that David Cameron felt compelled to brand Deans as a “rogue trade unionist” who single-handedly “nearly brought the Scottish petrochemical industry to its knees”. Even more horrifying, Cameron went on, Deans was part of a “leverage unit” - another Mail exclusive - deployed by Unite to “intimidate” Ineos bosses during the dispute. Imagine how scared Ratcliffe must have felt.

Deans himself resigned from his job at Grangemouth on October 28. He has also stepped down from his post as chair of Falkirk LP. Unite condemned the “sinister victimisation” of Deans and in the pages of The Guardian McCluskey - quite correctly - forthrightly defended Unite’s Scottish chair. Deans, he said, was hounded out by a “hysterical smear campaign against trade unions”, although he had “done nothing more than stand up for the rights of workers” (October 29). He will surely not be the last victim.

Speaking on November 5, Ed Miliband again reiterated his opposition to a fresh Falkirk inquiry or publication of the internal report - though he would look at any “new evidence” and revealed that a second police inquiry was “underway”. He boasted about acting “swiftly and thoroughly” in the Falkirk case, and reminded his audience that Murphy was no longer in place and that the Falkirk party had been put under “special measures” - thus nobody who had been recruited during the period covering the allegations would be able to vote in the selection for a new candidate, negating local party democracy and basic natural justice in one stroke.

Unite and local Labour Party members in Falkirk are under attack from two angles. On the one hand, there are the “gangsters” of Ineos and, on the other, the Labour leadership and its “special measures”.



1. http://www.forbes.com/profile/james-ratcliffe/.

2. BBC Radio 4 November 3 (www.bbc.co.uk/iplayer/episode/b03g89cg/Profile_Jim_Ratcliffe).

3. www.workerspower.co.uk/2013/10/grangemouth-unite-dispute-2013.

4. Socialist Worker October 29.

5. www.jerryhicks4gs.org/2013/10/pressrelease-press-release-press.html.

6. Daily Mail November 3.

7. www2.labour.org.uk/membership-rates-explained.