Jim Ratcliffe is now the richest man in Britain – and his lobbying has contributed to an unequal Britain

Billionaire business-owners like Ratcliffe can get a private audience with a Chancellor in which to push their preferred policies. How many trade unions have had similar opportunities in recent years?

Ben Chu
Tuesday 15 May 2018 17:19 BST
Ineos founder and CEO Jim Ratcliffe has been named as the richest man in the UK
Ineos founder and CEO Jim Ratcliffe has been named as the richest man in the UK (Reuters)

Not since the days of Margaret Thatcher has a trade union been so comprehensively outmanoeuvred.

In 2013 the petrochemical giant Ineos announced that its Grangemouth refinery, Scotland’s biggest industrial site, was losing money. To restore profitability, the management demanded cuts to employees’ benefits, including an end to their final salary pension scheme.

The workforce refused and, represented by the Unite union, voted to strike. But when Ineos threatened to shut down the entire plant in response they caved in, agreeing, against the advice of the union, to swallow all of the management’s terms, including a pledge not to strike for three years.

The founder of Ineos and the man who broke the resistance of those Scottish fitters and labourers was Jim Ratcliffe, named by the Sunday Times at the weekend as Britain’s richest man, with his 60 per cent stake in the company valued at around £20bn.

The media has made much of Ratcliffe’s humble origins, growing up in a council house in Oldham, and being publicity-shy. Yet his reticence in promoting his interests should not be exaggerated.

There was a disturbing coda to the Grangemouth showdown. Documents revealed last year (thanks to a rare freedom of information request that was not frustrated by officials) show that in the months before the 2013 industrial action, Ratcliffe had been privately lobbying the former chancellor, George Osborne, on the need to erode union rights. The Ineos man urged Osborne to “remove the right to strike, directly or indirectly” over threats to workers’ pensions.

Billionaire business owners can get a private audience with a chancellor in which to push their preferred policies. How many trade unions have had similar opportunities in recent years? The “beer and sandwiches” these days are for reserved for executives.

We can speculate on why Osborne’s door was open to Ratcliffe. Ineos had ostentatiously shifted its headquarters out of the UK to Switzerland in 2010 in order to trim the company’s corporation tax bill. Personal pique also seems to have played a role in the departure. Ineos, struggling with a large debt burden in the wake of the global financial crisis, had asked earlier that year for a special VAT tax break from the UK government. The favour had not been granted. Ratcliffe vented his frustration at that time at not being able to make his case directly to a government minister (although he apparently did get access to the powerful cabinet secretary Jeremy Heywood).

As part of that 2013 capitulation, Grangemouth’s workers agreed to a three-year pay freeze. That’s a microcosm of the wider economy over the past decade. In real terms average wages are more than 6 per cent below where they were 10 years ago – this has been the worst decade for pay growth since the Napoleonic wars. And official projections suggest the pre-recession peak for wages will not be reattained until well into the next decade.

Theresa May’s preferred form of Brexit – leaving the single market and the customs union – will, according to the government’s own projections, compound this economic damage to living standards. Incidentally, Ratcliffe is a fan of Brexit, and has been lobbying the government to reduce environmental taxes on companies like Ineos when Britain leaves the European Union.

Wages and living standards for most people in Britain remain under severe pressure. But some aren’t doing too badly. The combined wealth of Britain’s 1,000 richest residents rose 10 per cent in 2017 according to the Sunday Times’ calculations. That’s a £66bn increase, with £15bn of that jump accounted for by Ratcliffe alone. It’s hard to credit that Ratcliffe’s wealth has risen so dramatically in only a year; his net worth was either under-measured before, or possibly overestimated now. Much remains opaque since Ineos is a privately held company.

Yet, whatever the truth about his fortune, Ratcliffe makes a suitable figurehead for the modern British economy. Soaring wealth for the union-busting, tax-avoiding, regulation-reviling boss with ready access to the ear of the country’s top politicians and policymakers. Stagnant wages, hollowed-out pensions and chronic insecurity for his workers.

Theresa May said she wants to create an economy that works for everyone. At the moment, it feels like a country that works for the likes of Jim Ratcliffe.

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