Private equity bosses ‘planned sackings’ – Dromey

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‘WE’RE sticking up for members who are the victims at the sharp end of what is a growing scandal,’ TGWU deputy-leader Jack Dromey said yesterday, in evidence to MPs on the House of Commons Treasury Committee, scrutinising the behaviour of private equity firms.

Dromey told the committee: ‘One practical example right now, Burton’s on the Wirral – a long-standing, reputable company. Our members cooperated in change. We had a pay freeze for three years to reduce costs by £11 million.

‘The company was then sold to a private equity company, Duke Street Capital – within two months, two thirds of the workforce are being sacked and terms and conditions of employment are under threat.

‘It must have been known at the time what their intentions were, but because private equity is able to operate in secrecy we were not able to find out and that’s absolutely wrong.’

Demanding a change in the taxation regime, Dromey said: ‘It’s quite wrong that the cleaners that we represent in Canary Wharf, in the City of London, are paying tax like any other citizen, but the people that they clean for are getting away with paying minimal tax earning fabulous wealth.’

Paul Talbot of Unite said the private equity ‘industry’ had grown ‘vastly in proportion to what it first started as’ in the space of a few years.

GMB leader Paul Kenny said that after the AA takeover ‘very quickly the union was derecognised. . . quite soon after that massive job reductions started, 3,400 in total, big changes to the way the system operated, and without a union inside that made it much easier to do, frankly. . . it very quickly became obvious to us that in fact we didn’t know who the employer was, we couldn’t actually find the umbrella of who actually owned the AA, we couldn’t get past the first level, we had no dialogue.’