Socialist Worker

Scandal of the construction industry blacklist

Some of New Labour’s corporate friends stand accused of producing a secret list of union activists, writes Simon Basketter

Issue No. 1995

Will these workers, involved in the Pfizer dispute in 2000, be on the blacklists? Pic: Jess Hurd / reportdigital.co.uk

Will these workers, involved in the Pfizer dispute in 2000, be on the blacklists? Pic: Jess Hurd / reportdigital.co.uk


Some of the biggest construction companies at the heart of New Labour’s PFI privatisation project stand accused of running blacklists to bar trade union militants from employment.

Over 1,000 electricians are included on lists produced in 2000. These were allegedly used to prevent trade union activists getting work on major construction sites.

Alan Wainwright, a former director of Balfour Beatty subsidiary Haden Young, has produced the lists as part of a constructive dismissal claim against his former employers.

Other companies involved are the Balfour Beatty subsidiary Balfour Kilpatrick, Crown House—owned at the time by Carillion—and Drake & Scull—now called Emcor engineering.

These are some of the biggest firms in the country. Wainwright claims that the list of “troublemakers” was passed to him by Balfour Kilpatrick when he was working for Drake & Scull in 2000 as business improvement director.

Wainwright left Haden Young in January. He claims he was forced out after complaining about blacklisting.

The lists, seen by Socialist Worker, include the names and national insurance numbers of 1,087 electricians who worked on the Jubilee Line Extension Project, the Balfour Kilpatrick Royal Opera House Project and the Balfour Kilpatrick Pfizer Project in Sandwich, Kent.

All three were major construction jobs that saw industrial disputes in the late 1990s and beginning of this century. Since then a number of electricians have consistently had trouble getting work with Balfour Kilpatrick and its allied companies.

Many of them have had their livelihoods threatened because of their failure to get work.

Jim, an electrician named on the list, was part of the Jubilee Line extension strikes in 1998 and 1999. He spent 16 months unable to gain work as an electrician, even though he made over 250 applications to electrical companies during that period.

Kevin, another electrician whose name appears on the list, told Socialist Worker, “There has been a mountain of anecdotal evidence about blacklisting but the allegations have always been difficult to prove.

“I was a shop steward on the Pfizer site in Kent. Ever since our dispute I have not been able to work on a Balfour Kilpatrick site. They were quite heavy disputes and the building bosses clearly were worried about us at the time.”

Steve, another shop steward on the list who was involved in the Pfizer dispute, said, “Ever since I worked on the Pfizer project I have run into problems. I am never contacted by agencies. I have to rely on word of mouth and turn up at sites to get work.”

Socialist Worker has discovered that the activists on the list may still face victimisation on Balfour Kilpatrick sites. Two weeks ago Manchester electrician Steve Acheson, who is on one of the blacklists, was told by his subcontracting bosses Logic that he would have to leave.

This followed a period of six weeks in which Balfour Kilpatrick, a company on the Manchester Royal Infirmary site where Steve works, sought to have him thrown off the site.

After pickets by workers, he got his job back with Logic. Steve was part of the long running dispute against DAF Electrical in Manchester in 2003. He won an industrial tribunal against his and other workers’ dismissal “on grounds related to their union membership”. Carillion had subcontracted the job to DAF.

A number of electricians on the list are looking for union backing to take the companies involved to court. A spokesman for Balfour Beatty denied any involvment in blacklisting.

During the 1980s Balfour Beatty’s then parent company, BICC, gave £90,000 to anti-union bosses’ organisations such as Aims of Industry and the Economic League.

Balfour Beatty are involved in Heathrow Terminal 5 and 23 PFI projects—including schools in Birmingham and Tower Hamlets, east London.

A spokesperson for the Amicus union said, “We are concerned that this is a breach of the law. The Trade Union and Labour Relations (Consolidation) Act of 1992 is about refusal of employment on the grounds of union membership.

“Another related provision says it is unlawful to refuse the service of an employment agency on grounds related to trade union membership. We believe that any blacklists that are operated and proved to be operated are unlawful.”

In 2003, the department for trade and industry (DTI) proposed draft regulations to prevent blacklisting. But it did not bring in legislation.

The minister in charge of the DTI is former union leader Alan Johnson.

Deputy prime minister John Prescott is at the head of New Labour’s PFI projects. Prescott suffered blacklisting when he worked as a seafarer. Today New Labour has companies accused of blacklisting trade unionists building our schools and hospitals.


New Labour and construction

“I want to be a champion of your industry,” deputy prime minister John Prescott told a construction industry conference at the end of the 1990s. This was at the time of the disputes that produced the blacklists of trade unionists.

“I want to work actively in partnership with the industry,” his then deputy, Nick Raynsford, told Building magazine, “I see my job as a combination of creating a climate in which industry can do well—like unblocking the Private Finance Initiative (PFI)—and helping the industry itself rise to the challenge.”

  • When he was minister Nick Raynsford spent months cobbling together a consortium, which included Balfour Beatty, to win rebuilding contracts in Turkey following an earthquake.
  • Tony Blair personally intervened to approve the £220 million subsidy to the company to build the failed Ilisu dam project.
  • Robert Osborne was head of special projects at construction firm Tarmac—now called Carillion. This is a major builder of PFI hospitals. He was appointed chief executive of the department of health’s private finance unit. He then went back to Tarmac to run its PFI division.
  • In its first term New Labour set up a task force led by Balfour Beatty director Tony Merricks aimed at eradicating the “cowboys” in the construction industry.

PFI is the scheme allowing private corporations to build and run our public services and lease them back to the government.

The government says that this allows it to commission more schemes than it could with public funds, and offers better value for money.

In reality it has created huge profits for the companies at the heart of the blacklisting scandal.

Balfour Beatty is a major player in the PFI scheme. It saw a 25 percent rise in its annual profit in the last year and expects to make £142 million this year.

The company, which is renewing London’s underground and national rail tracks and working on infrastructure for Terminal 5 at Heathrow, said its year-end order book rose by 12 percent to £7.6 billion.

The company is also the preferred bidder on four PFI projects worth another £1billion in construction work.

In January, Balfour Beatty dropped out of bidding for its rival Mowlem. Carillion eventually took over Mowlem.

At the end of last month Balfour Beatty’s power division won over £50 million worth of business from the National Grid.

In January, Balfour bought two of Mowlem’s businesses from Carillion for £20 million. Meanwhile, Carillion also reported a record order book of £7 billion.

On Monday of this week Balfour Beatty agreed two PFI projects with a combined capital value of over £130 million.

These are its Birmingham Schools PFI project, worth £74 million, and the Sandwell Metropolitan Borough Council affordable housing scheme, worth £57 million.

PFI is a cash cow for construction firms.

Construction companies engaged in PFI expect to make between three and ten times as much money as they do on traditional contracts, the industry has admitted.

They traditionally received rates of return of 1.5 to 2 percent on contracts, but expect margins of 7.5 to 15 percent on PFI building schemes.


Subcontracting scam

One thing the blacklisting allegations do is throw light on the murky world of subcontracting in the construction industry.

For instance, Crown House was owned by Carillion which then sold it to Laing O’Rourke in 2004. Drake & Scull has been owned both by Balfour Beatty and Carillion.

The aim of subcontracting is to produce a multi-layered false economy. As the number of participants in the market increases, so the opportunities for squeezing workforce costs are enhanced.

Wages are forced down, and the responsibility for paying for training, holiday, sick leave and pension rights is displaced down the subcontracting chain onto the workers themselves.

Because this false economy forces cost savings to be made at every layer, and because it is now deemed too expensive to train workers on the job, subcontracting encourages deskilling. This in turn increases the risk of death and injury at work.

The companies behind subcontracting aren’t small operations, but huge mulitnationals.


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News
Sat 8 Apr 2006, 00:00 BST
Issue No. 1995
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