J Strikes by British government workers this summer, protesting a squeeze on public spending, may end up costing at least 400 million pounds ($658 million), with the latest action by postal workers starting today.
About 12,000 members of theCommunication Workers Union walked out at Royal Mail Group in a dispute over jobs and work rules following a three-day strike by the union last week. Protests in 2007 at the government-owned mail carrier cost the London economy 300 million pounds, according to the city’s Chamber of Commerce. In June, a two-day London Underground strike cost the economy 100 million pounds, the chamber said.
“These things go in waves, and there tends to be a greater willingness to engage in labor activity during a downturn,” said Peter Samuel, an industrial relations professor at Nottingham University. “People feel scared, insecure, frightened and that they have no power.”
Britain is experiencing its most severe economic contraction in five decades, and Prime Minister Gordon Brown’s government plans to cut public spending to reduce a ballooning deficit, putting public-sector jobs in the firing line. The number of unemployed people rose to 2.38 million in May, the most since 1995, while wages grew at the slowest rate since records began in 2001, the government said July 15.
Brendan Barber, general secretary of Britain’s Trades Union Congress, an umbrella group, also said July 15 that calls for “deep” cuts in public spending “will make the recession far worse” and threatens the jobs of 200,000 government employees including nurses and teachers.
Cuts ‘Inevitable’
More than 250,000 government-funded jobs in the U.K. may be lost by 2014 because of “inevitable” public-spending cuts, according to a report published yesterday by the Centre for Cities, a London-based research institute.
A protest over the use of foreign workers at a Total SA site in eastern England cost the company 100 million euros ($141 million) in extra costs after a June settlement, said the company, Europe’s largest oil refiner.
In the year through May, 352,000 workers went on strike, continuing a surge that began last year as government-funded workers challenged a clampdown on pay increases. In the year to May 2008, 638,000 workers took industrial action, according to the Office for National Statistics. That compares with the annual average of 201,600 through the 1990s, it said. That’s below the 1980s annual average of 1.04 million.
Staff Under Pressure
While the Royal Mail dispute centers on a so-called modernization agreement reached between the company and the Communication Workers Union in 2007, the union says the company is squeezing workers to be more efficient by cutting jobs without adding automation equipment.
The company “is set on piling more work and pressure on already-stretched staff,” Dave Ward, the union’s deputy general secretary, said on July 14.
The union held three days of strikes in London earlier this month. To avert even more strikes before a general election, which must be held by next June, the government has delayed plans to sell the company to private buyers.
Mail volume in central London has fallen by 20 percent in two years, as the company, which began delivering mail in 1635, lost ground to rivals such as Bonn, Germany-based Deutsche Post and Hoofddorp, Netherlands-based TNT NV, and business dropped off because of the Internet.
“This strike will be another blow to businesses, especially small business, that depend on Royal Mail,” said Sam Turvey, a spokesman for the British Chambers of Commerce in London. He didn’t have a cost estimate for the walkouts.
Falling Union Membership
U.K. union membership peaked in 1979 at 13.2 million, or around 50 percent of the workforce, and fell to 7.5 million in the next 25 years, according to the London School of Economics.
Currently, 29 percent of workers belong to a union, including three in five workers in the public sector and one in five at private companies.
Job security is also a key issue for the 10,000 members of the National Union of Rail, Maritime and Transport Workers, who walked off their jobs last month on the publicly owned London Underground railway. Bob Crow, the general secretary of the union, called the action that forced the 3 million daily travelers off the railway “a fantastic success.”
The two sides still haven’t reached an agreement on pay or the union’s demand that the company guarantee that it won’t fire workers and instead use voluntary means to cut around 1,000 jobs. Members of another union representing London Underground workers, Unite, are voting on whether to authorize another strike on the railway over pay.
Strikes Threatened
There are threats from other public sector unions as well, including lecturers at London Metropolitan University and workers at the government’s tax collecting agency, Her Majesty’s Revenue and Customs, where the Public and Commercial Services Union has held a series of short strikes over work rules.
The walkout by union employees of a Total contractor at the Lindsey desulphurization plant triggered a series of sympathy strikes across the U.K., fuelled by concern that migrant workers are squeezing local people out of jobs.
Some unions, such as the British Airline Pilots Association, are less confrontational, said Ben Read, a managing economist at the Center of Economic and Business Research in London. Association members at London-based British Airways Plc approved a cost-cutting package on July 13 that will cut pilots’ wages by 2.6 percent.
Rising unemployment may dampen labor unrest because union members will be worried about keeping their jobs, said Alex Bryson, senior research fellow at the National Institute of Economic and Social Research in London.
Nottingham University’s Samuel disagreed, saying cuts in public spending will cause “pain” that may trigger more strikes in Britain.
