finance

Labour takes aim at BA and British Gas over job cuts


British Airways and British Gas were accused by Labour on Sunday of “picking the pockets” of their staff, as the party promised to outlaw controversial “fire and re-hire” practices.

Angela Rayner, Labour’s deputy leader, told the party’s “virtual” annual conference that it was not acceptable for companies to make workers redundant and then re-hire them on lower pay and worse terms.

“I say to companies like British Airways and British Gas: if you’re going to use our country’s name then you had better respect our country’s values,” she said.

“If they won’t stop fire and re-hire, it’s time the government stepped up and ended it for them.” Labour leader Keir Starmer has named outlawing the practice as one of his first new policies.

Ms Rayner said the companies were “using the threat of the dole queue to pick the pockets of the very staff who have kept those companies going [through the Covid-19 crisis]”.

Last week BA chief executive Alex Cruz said the airline expected to drop its controversial plan to “fire and re-hire” thousands of staff following negotiations with unions.

Mr Cruz told MPs that BA still planned to cut about 10,000 jobs, roughly a third of the workforce, but added: “I am pleased that we have reached a point at which it appears that we may have a solution that does not require the need to issue new contracts.”

BA said: “From the very start of the Covid-19 crisis we publicly committed to work with the unions to mitigate job losses and we’re pleased to have now reached agreements.”

Meanwhile British Gas owner Centrica is under pressure follow suit. It has been accused by unions of forcing 20,000 employees to accept worse employment contracts or lose their jobs.

Centrica, the owner of British Gas, said that using fire and rehire was only a “last resort” if it was unable to reach agreement with unions.

The company has been working on restructuring for several years due to falling profits, and announced in June that it would lay off 5,000 staff. Those job cuts are in addition to 12,500 lay-offs the company has made since 2015.

Meanwhile on Monday Anneliese Dodds, shadow chancellor, will tell party members that Labour would offer new assistance to companies to keep on staff as the government furlough scheme comes to end on October 31.

She will call for a “job recovery scheme” to pay employers who offer staff part-time work or provide high-quality training.

Sir Keir told the BBC’s Andrew Marr show that Labour also favoured a targeted extension of the furlough scheme to help sectors worst hit by continued Covid-19 restrictions, naming retail, hospitality, tourism and aviation.

Ms Dodds will also propose a £3bn “national retraining strategy” and targeted support for companies facing a cliff-edge when repayments on government loans schemes fall due next year.

She has urged the government to “come clean” on its secret Project Birch which was set up to help companies in trouble because of Covid-19.

The Financial Times revealed in May the existence of the scheme, designed to provide emergency funding for companies seen as strategically important by the government.

Yet only one such support package has so far been announced, with a £30m loan to a Spanish-owned company called Celsa Steel, based in south Wales. 

That is despite warnings of mass redundancies in industries including aviation, manufacturing and steel which have seen orders plunge because of the Covid-19 lockdown.

In the summer it was reported that six companies were in advanced talks with the Treasury through Project Birch including Jaguar Land Rover, Tata Steel and British Steel.

Ms Dodds said Birch had been “floated as the saviour of British industry” but so far the government had given few details about the scheme. “A rescue plan that only rescues one business is not fit for purpose,” she said.

“It’s time the government broke its wall of silence and came clean about what’s really going on.”

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