Jenny Formby from UNITE talks briefly to Adam Shaw about the upcoming Heinz Wigan strike.
08:45 Wednesday 29th December 2010 BBC Radio 4 Today Programme
JAMES NAUGHTIE: … at the Heinz factory in Wigan, where they’ve voted to strike earlier this month. They’re due to walk out this evening in a third stoppage. Here is Adam Shaw.
ADAM SHAW: Thank you. The union which represents those workers, UNITE, says the deal on offer doesn’t actually reflect the cost of living, or indeed the performance of the business itself. Well earlier in the programme we heard from Andrew Sentance, he’s a member of the Bank of England’s Monetary Policy Committee. He’s been consistently arguing that interest rates need to rise, and in his personal essay for this programme he warned of the impact that the current 0% rate was having on inflation, and therefore wage demands. (TAPE)
ANDREW SENTANCE: Inflation has been above its 2% target for almost all the time I have been on the MPC, over four years now. And rising energy and food costs are particularly worrying for people on low incomes. A policy of raising interest rates would provide an important warning signal, heading off the risk that high inflation sets off a wage/price spiral. (LIVE)
ADAM SHAW: Well Jenny Formby is the National Officer for Food and Drink for the UNITE union, and joins us on the line. Good morning.
JENNY FORMBY: Good morning.
ADAM SHAW: Andrew Sentance there was arguing against the dangers of a wage/price spiral. Isn’t that specifically the danger in the argument that you’re putting forward, that you might create?
JENNY FORMBY: Well no I don’t think so. And of course for our members, the men and women who are working at Heinz in Wigan, all they see is that their standard of living is dropping, if the company, which is doing exceptionally well, is going to give them a below-RPI pay increase.
ADAM SHAW: You choose RPI, but the Government’s preferred measure CPI is 3.3%, and that’s more or less what they’re being offered.
JENNY FORMBY: Well we’ve long argued that CPI doesn’t reflect the true increase in the cost of living for members. But we don’t just use that as a measure, when UNITE is working out what is a reasonable demand for our members. Of course we look at affordability, and Heinz, like many other companies in the food and drink sector, are actually bucking the trend, and have shown themselves to be very recession-resiliant, and in fact have made significant profits. All of their key financials have gone up. The last time they reported results in November, margins are up, and, you know, EPS, dividends, everything that you look at is very high. Yes.
ADAM SHAW: Do you generally notice a hardening of attitudes amongst your members in other companies about pay settlements?
JENNY FORMBY: Well I deal solely with the food and drink sector.
ADAM SHAW: In that area, outside of Heinz, do you feel that’s something of a trend?
JENNY FORMBY: Well absolutely, because a lot of companies appear to be behaving very opportunistically in saying, ooh look out there at the doom and gloom, while all the time they’re raking in very fat profits, and trying to supress pay and conditions for our members. And our members aren’t daft. They can see through that. They know when they’re creating massive wealth for companies like Heinz, and all they’re expecting is a fair share, so they can be rewarded in the same way that the managers and shareholders and everyone else in the company, apart from the workforce, are finding significant rewards into their paypackets.
ADAM SHAW: If what you say is true, should we expect a lot more strikes in the New Year?
JENNY FORMBY: Well hopefully not, because hopefully companies won’t behave like Heinz, and they will actually speak to us meaningfully about how they can resolve this dispute. It won’t take an enormous amount of movement on their part. But they’ve got to be prepared to put a bit more value into the paypackets.
ADAM SHAW: Jenny Formby, from the UNITE union, many thanks.