Mandelson clashes with union over ‘moral right’ to aid

As the number of jobless approaches two million, Business Secretary dismisses ‘scaremongering’

The joint leader of Britain’s largest union was unrepentant yesterday over his claims that a major UK car plant is on the verge of collapse, insisting he had a “moral” right to raise the issue.

The Secretary of State for Business Lord Mandelson accused Tony Woodley of “scaremongering” and potentially damaging the fragile car industry by warning the unnamed factory will close within days with the loss of 6,000 jobs unless the Government steps in with state aid.

But according to a source close to the joint general secretary of Unite, Mr Woodley says he has a “moral” right to stand up for the workers at the car plant, despite his refusal to identify the factory.

The row is the latest in the bitter war developing between Lord Mandelson and the unions. It came as the Employment Minister Tony McNulty warned unemployment would break through the two million mark next month, confirming fears Britain is only at the start of a long recession.

A meeting of Labour’s National Policy Forum this Saturday is likely to be the scene of fresh clashes. Unions are outraged that Lord Mandelson is “stalling” on plans to implement the EU agency workers directive, which could have safeguarded hundreds of jobs at BMW Mini in Oxford, axed last week.

The directive, agreed by the Government, the CBI and the TUC last May, would offer the same protection to agency workers as full-time staff facing redundancy, if they have done more than 12 weeks in the job. At the time, the Department for Business said it would be introduced in the next parliamentary session – meaning it should now be before Parliament. But last week the Government announced further consultation on the directive, effectively delaying it further.

It follows the spat between Lord Mandelson and union bosses last month over the employment of foreign workers at the Lindsey oil refinery, Lincolnshire. The Business Secretary now faces renewed anger over the crisis facing the car industry, despite a £2.3bn bailout to help flagging firms. Figures published on Friday showed a 58.7 per cent year-on-year drop in car production in January.

Mr Woodley and his fellow Unite leader Derek Simpson had a private showdown with the Chancellor, Alistair Darling on Thursday, in which the union bosses warned manufacturing would never recover unless the Government gave “urgent assistance”.

Mr Woodley said on Friday: “There’s a company in our country that, without direct financial aid, will go down and it will affect 6,000 workers.”

Vauxhall’s plant in Ellesmere Port, Cheshire, was being identified as a possible candidate, because although it only employs 2,200 staff, many more are dependent on production there.

Lord Mandelson warned such comments could cause more damage to the car industry, while the Employment Minister, Tony McNulty, told the BBC he had no knowledge of any imminent closure of the factory, adding: “The unions haven’t contacted me about that. I’m not sure whether that kind of approach... is terribly helpful.”

On the expected rise in unemployment figures, Mr McNulty added: “I think we will go through, on the ILO [International Labour Organisation] figures, two million next month.”

Lord Mandelson will come under fire on a separate front this week when he pushes ahead with plans to part-privatise the Royal Mail. The former Cabinet minister Peter Hain will become the 123rd Labour MP to sign a motion opposing the legislation, meaning the Government will be forced to rely on Tory votes to get it through.

Those in trouble...

Bentley

Losing 220 jobs out of 3,800 at Crewe plant; three-day week, pay cuts and even-week shutdowns.

Jaguar Land Rover

Planning to cut 1,000 out of 5,000 jobs; one-day shutdowns and production cuts.

Vauxhall/Opel

Ellesmere Port, with 2,200 staff, considered UK’s most vulnerable plant; extended Christmas closure.

Honda

Swindon plant’s 4,200-strong workforce is facing a four-month shutdown until the end of May.

Nissan

Sunderland plant is cutting 1,200 out of 5,000 jobs; production cuts and two-week shutdown.

Toyota

Plant at Burnaston faces cuts in 4,000 workforce; night shift ended and two-week shutdown planned.