The Times - UK (2022-06-11)

48 Saturday June 11 2022 | the times

Business

8.2 per cent in the private sector, official

figures show. The public sector is lag-

ging behind, with pay growth of 1.6 per

cent over the same period.

Overall, regular pay for UK workers,

which excludes bonuses, rose by 4.2 per

cent. But that was slower than inflation,

so what workers could buy with their

wages fell by 1.2 per cent. Smith argues

that workers are fighting against a

“drive to the bottom over pay and

conditions”.

“We’ve got to get off the addiction of

low-paid and insecure employment,”

he said. “That means in key sectors of

the economy we need to have plans for

jobs and skills — aviation being a case

in point. We called for a plan for

aviation going into the pandemic.

There was no plan put in place and look

at where we’ve ended up.”

As well as pay disputes, union leaders

say that industrial campaigns are being

driven by employers using “fire and re-

hire” tactics — where workers end up

doing the same basic job for worse pay

and conditions — and by workload

pressures caused by staff shortages.

In the private sector, skills shortages

are also giving unions the opportunity

to push for big pay rises for jobs such as

HGV drivers.

Paul Johnson, director of the Insti-

tute for Fiscal Studies, believes it is

“highly unlikely” that industrial action

will reach the scale seen in the 1970s. He

cites the decline of unionised UK

employees. Trade union membership

in Britain peaked in 1979 at 13.2 million

and declined sharply in the 1980s and

1990s. In 2019-20 unions reported

membership at 6.7 million, a figure that

fell further to 6.4 million last year.

Membership is far more prevalent in

the public sector, where about half of

workers are unionised, compared with

13 per cent of private sector employees.

Johnson predicts that the hardest

decision for government this year is

going to be what it does about public

sector pay awards. “If they give any-

1

An investigation has been

launched into the proliferation

of “American candy” stores and

souvenirs shops in London’s West

End amid concerns about tax

evasion and rip-off practices.

Westminster council says it is

investigating 30 US-style sweet

shops on Oxford Street for

business rates evasion of nearly

£8 million. Page 13

2

Staff at the London office of

TikTok, the Chinese video

hosting website, have

complained about the high

pressure that they were put under,

which led them to work extremely

long hours. A woman working on

establishing the company’s new

ecommerce venture said: “I was

expected to work weekends,

Monday through Sunday.” Page 16

3

American inflation

accelerated to a 40-year high

of 8.6 per cent in May,

prompting a renewed sell-off in

global equity markets. The

unexpected rise in the consumer

prices index reversed a cooling in

April, when inflation fell back to

8.3 per cent year-on-year. Page 47

4

EasyJet pilots have warned

that the worst of the

disruption affecting its

operations could be yet to come. A

letter to the airline’s chief

executive from the easyJet branch

the French SNPL pilots’ union

says its members believe that

disruption to the airline’s flights

this summer has yet to peak, a

situation it called a “frightening

prospect”. Page 47, 52-53

5

The dominance of Apple and

Google in the mobile phones

market is facing further

scrutiny from the competition

watchdog. The giant technology

groups “hold all the cards” when it

comes to how people use mobile

phones, the Competition and

Markets Authority has claimed.

Pages 47

6

Positive trial results for an

eagerly awaited vaccine for

respiratory syncytial virus

have been published by GSK,

providing a significant boost for a

key pipeline drug ahead of

FTSE 100 drugs group ’s break-up

next month.

7

The Bank of England has

declared that Britain’s biggest

banks are no longer “too big to

fail”, despite finding shortcomings

in crisis contingency plans drawn

up by HSBC, Lloyds Banking

Group and Standard Chartered.

8

Britons are braced for the

worst bout of inflation to hit

the economy in more than 13

years, raising fears at the Bank of

England that people are not

convinced by policymakers’

attempts to bring down prices.

Page 50

9

Fixter, a British technology

start-up that enables car

owners to get their vehicle

serviced without leaving the house,

has been bought by Renault, the

French carmaker. Page 52

10

Trafigura, one of the

world’s biggest

commodities traders, has

reported record half-year profits

after capitalising on market

volatility caused by the war in

Ukraine. Page 53

Need to know

Workers rediscover their

The threat of strikes

over pay and conditions

has employers on the

defensive, write Louisa

Clarence-Smith and

Constance Kampfner

It’s not just the railways. Workplace

militancy is back in vogue across

Britain as unions take on employers

over below-inflation pay packages and

other issues with renewed confidence.

“There are little fires everywhere,”

Kevin Rowan, head of organisation at

the Trades Union Congress, said.

“People are struggling to make ends

meet on the back of two to three years

of pay stagnation in the private sector

and longer in the public sector.

“We always used to describe indus-

trial action as a last resort. Now unions

are flexing their muscle because they

see positive results.”

Successful strike action has included

workers at B&Q’s national distribution

centre in Worksop, Nottinghamshire,

securing a 7 per cent backdated pay rise

and bonus payments from Wincanton,

the logistics group. Elsewhere, a

threatened strike by GSK engineers,

technicians, laboratory analysts and

warehouse workers over a “derisory”

pay rise offer of 2.8 per cent was called

off in May after the pharmaceuticals

group raised its offer to 4.5 per cent and

awarded staff a one-off special award of

one week’s pay.

It has prompted concerns that

Britain could suffer industrial strife

comparable to the 1970s and early

1980s, when strikes were driven first by

galloping inflation and then by Marga-

ret Thatcher’s efforts to break the

strength of the unions in nationalised

industries such as coal and steel.

“The 1970s was a crossroads moment

for the UK and the economy and I think

we’re at another one of those moments

now,” Gary Smith, general secretary of

the GMB union, said. “The economy

looks very different, industry looks

very different and these are different

groups of workers who are often taking

industrial action as well. We’re facing a

world with a different economic out-

look than we’ve ever seen before.”

Pay growth in Britain stagnated in

the decade after the 2008 financial

crisis. This year, private sector employ-

ers that are struggling to retain and

recruit staff have said they expect to

agree record pay rises. Average total

pay growth from January to March was

Nurses on strike in east London during the winter of discontent in 1979. Inflation’s

Vaccine trial gives GSK critical breathing space

Positive trial results for an eagerly

awaited respiratory vaccine have been

published by GSK, providing a signifi-

cant boost for a key pipeline drug ahead

of the company’s break-up next month.

The FTSE 100 drugs group said that

its vaccine candidate for RSV, or respi-

ratory syncytial virus, for adults aged

over 60 was the first to show “statisti-

cally significant and clinically mean-

ingful efficacy” in an interim analysis of

a phase III trial.

Hal Barron, 61, GSK’s chief scientific

officer and president of research and

development, said the data suggested

the vaccine offered “exceptional pro-

tection for older adults from the serious

consequences of RSV infection.

“RSV remains one of the few major

infectious diseases without a vaccine

and these data have the potential to

meaningfully impact the treatment of

RSV and may reduce the 360,000 hos-

pitalisations and more than 24,000

deaths worldwide each year.”

The company plans to submit the

data to regulators in the second half of

this year and the trial will be presented

in a peer -reviewed publication.

Results from the vaccine trial had

become significant for GSK and the

City. The company is striving to revive

its drugs pipeline before the separation

of Haleon, its consumer healthcare

business, through a listing on the

London Stock Exchange on July 18.

Analysts at Barclays yesterday hailed

the “most important clinical catalyst of

the year for GSK”, while Jefferies has

forecast $2.5 billion in peak worldwide

sales.

Shares in GSK rose 26¾p, or 1.6 per

cent, to £17.36½, extending gains this

year to 8 per cent.

Dame Emma Walmsley, chief

executive, has made turning around

GSK’s underfiring pipeline the

priority amid criticism of underper-

formance and pressure from Elliott

Advisors, the American hedge fund.

GSK is one of the world’s largest

drugs groups, employing 94,000

people. In February it set

ambitious financial targets and

said that it expected data on

up to seven of its eleven

potential new vaccines

and medicines this year,

including RSV. The com-

pany is in a race with competitors,

including Pfizer, which recently con-

firmed a delay to its RSV older-adult

vaccine readout.

RSV is a common contagious

virus affecting the lungs and

breathing passages and is one of

the biggest infectious diseases

without a vaccine or specific

treatment. It can worsen con-

ditions including chronic

obstructive pulmonary

disease, asthma and

chronic heart failure

and can lead to pneu-

monia and death.

Older adults are at

high risk for severe

disease from a

decline in immu-

nity and under-

lying conditions.

Alex Ralph

Dame Emma Walmsley

has made improving

Glaxo’s drugs pipeline a

priority amid criticism

Rail strikes to cost £91m

Rail and London Underground

strikes this month will cause a hit of

at least £91 million to the economy

as workers are told to stay at home

and events such as the Glastonbury

music festival are disrupted (Louisa

Clarence-Smith writes).

More than 250,000 people who

cannot work from home will be

affected by the first day of the

planned strike on June 21, according

to analysis by the Centre for

Economics and Business Research,

an independent consultancy.

Further action is planned for

June 23 and June 25 that week.

Tens of thousands of railway

workers nationwide are expected to

strike over pay and proposed job

cuts. On the first of those days,

London Underground workers are

also planning to strike, causing

disruption for commuters and

tourists in London.

City firms including JP Morgan

Chase, the investment bank whose

boss Jamie Dimon has been a

proponent of getting staff back to

offices, plan to tell the majority of

UK staff that they can work from

home during the strikes.

Sport and culture events are also

set to be disrupted. The CEBR

estimated that the loss of economic

output from the strikes would be at

least £91 million, with London the

region affected most severely. It

warned that the national strike had

the potential to “significantly

intensify” supply chain disruption if

freight trains used to transport vital

goods were cancelled.

It comes on top of an already

gloomy outlook for the economy,

with economists predicting a

recession in Britain this year.