Horrific pay cuts of up to £8,000 a year being imposed on thousands of Heathrow airport workers are the cost of eye-watering levels of debt and excessive payments to directors and shareholders, Unite has claimed today (Thursday October 8).
Research by Unite, released to coincide with the beginning of an industrial action ballot by members employed at Heathrow Airport Ltd (HAL), lays out a catalogue of financial mismanagement and greed at the UK’s leading airport demonstrating that it is this and not the pandemic, as the airport claims, which has brought it to its present unstable financial position.
Unite says that 4,000 workers, many of whom are being asked to lose a quarter of their salary and are facing destitution as a result, are the UK’s latest victims of ‘bandit capitalism’ whereby the costs of bad boardroom decisions and reckless financial practices are dropped onto innocent workers.
The union has uncovered a vastly complicated corporate structure at the airport involving 13 different companies and subsidiaries. The total long-term debt across the group stands at an incredible £16,676bn – nearly double the debt of any of Heathrow’s comparator airports. However HAL, which employs the workers, has assets valued at £15.8bn. In 2019 the group had reserves of just £822m.
In the last five years Heathrow’s debt has increased by nearly £3bn, while since 2012, HAL has paid out £4bn in dividends to shareholders. This includes £100m paid this year, after the company’s operations had taken a huge hit from the coronavirus pandemic.
Unite argues that the airport ought to have been more responsible with the vast profits it made between 2014-19 instead of squandering the money on dividends and increasing liabilities. Senior management and the board are not being asked to contribute to the savings programme, only staff.
As HAL’s dividends are not linked to profits but are instead linked to its “regulated assets bases”, the more it builds and expands the bigger are its pay outs to shareholders in dividends.
But, as Unite points out, it is not just the shareholders who have fared very well from Heathrow airport. CEO John Holland Kaye pocketed pay and pensions worth nearly £2.6m in 2019, a remuneration package that is nearly three times that of equivalent airport bosses.
Further, a total of 49 directors received over £21,129m in pay and benefits from the Heathrow group of companies in 2019.
Heathrow workers are being asked to make massive salary sacrifices in order to keep their jobs include airside operatives, engineers, firefighters and security officers. Rejecting the cuts, workers opted overwhelmingly to take a vote on strike action this autumn, with ballot papers being issued today (October 8). The ballot closes on Thursday November 5.
Greed and mismanagement
“This research sets out a jaw-dropping catalogue of greed and mismanagement at the heart of our major airport,” commented Unite regional co-ordinating officer Wayne King.
“Heathrow’s present predicament owes more to boardroom greed than this virus. Once again a UK-based business has rinsed a national asset for all it is worth and then told low paid workers that they have to pick up the tab for this recklessness.
“This labyrinthine set up has directed oceans of money out of Heathrow through unsustainable and unjustified dividends and telephone number salaries to directors.
“There is clearly hefty sums of money in the bank, enough to get through this without destroying people’s lives, yet Heathrow’s management wants lowly paid workers to pay for their sorry financial practices. This sort of ‘bandit capitalism’ is immoral and should not be allowed in modern-day Britain.
“HAL needs to stop now peddling the myth that the coronavirus has ruined its financial outlook. Workers did not create the precarious balance sheet which has been years in the making and they should not be made to pay for it.
“Our members’ hard work has generated multi-million pound profits for this airport so we are determined that they are not going to pay for the corporate chaos and excess of Heathrow’s senior management, and the public will support them on this.
“People will not understand why poorer workers are carrying the can for something that they have no responsibility for yet senior managers and the boardroom are making no salary sacrifice whatsoever,” King added.
He continued, “HAL made this mess, not the workforce. It is their duty to clean it up responsibly and without driving thousands of workers onto the breadline.
“We urge HAL to withdraw its fire and rehire proposals. Work with us on a fairer and more stable way forward because this course of action will destroy not just the lives of these workers but the businesses and communities that they support across the UK,” concluded King.
At the beginning of the pandemic Heathrow boasted it had £3.2bn to see itself through the pandemic even with no passengers.
Heathrow has received over £26m from the government to furlough workers as part of the job retention scheme. It has also confirmed that it will take advantage of the government’s new job support scheme but despite this additional financial support it is not prepared to revisit the proposed pay cuts.
By Barckley Sumner