UK
A recent controversy involving DP World showed how keen Keir Starmer’s government is to prostrate itself before firms that trample over workers’ rights.
Starmer’s economic agenda relies heavily on “de-risking” private investment with public money.
By Jonny Jones
November 1, 2024
Source: Jacobin
Keir Starmer, as Leader of the Opposition of the United Kingdom during the: Repowering the World Session at the World Economic Forum Annual Meeting 2023 in Davos-Klosters, Switzerland, 19 January.
When Keir Starmer’s Labour Party won office in July of this year, there was precious little in the party manifesto that offered hope that things were going to get better. Two promises that stood out amidst nearly 150 pages of vague platitudes were a commitment to rebuild Britain’s “crumbling” infrastructure and a range of reforms to workers’ rights.
Both pledges were thrust onto center stage in early October as Labour unveiled its “Make Work Pay” legislation. At the same time, Starmer prepared for an investment summit at which DP World, which describes itself as “a leading provider of smart logistics solutions,” was due to announce a £1 billion investment in its London Gateway port in Essex.
On October 9, Transport Secretary Louise Haigh denounced DP World’s subsidiary company P&O Ferries as a “rogue operator” for illegally firing 786 staff in 2022 and replacing them with agency workers on lower pay. Within days, DP World had decided to shelve the London Gateway announcement, leading to a flurry of corrections from government sources.
“Louise Haigh’s comments were her own personal view and don’t represent the view of the government,” was the comment from an official in Starmer’s office, while Business Secretary Jonathan Reynolds told the BBC, “No, that is not the government’s position.” Starmer himself made a statement to that effect, leading DP World to issue the following statement:
Following constructive and positive discussions with the government, we have been given the clarity we need. We look forward to participating in Monday’s international investment summit.
Public Risk, Private Gain
Behind this rather farcical display of grandstanding and backtracking lies a serious contradiction. Labour has pegged its approach to the social crisis facing Britain to achieving higher levels of economic growth. They hope to do so through an expansion of infrastructural investment, ripping up current planning rules, and boosting labor productivity, which has stagnated since the economic crash of 2008.
Labour has announced a new National Wealth Fund to drive infrastructural investment. Yet the main source of investment will be the private sector. Instead of building nationalized infrastructure, the fund aims to attract £3 of private investment for every £1 of public money, with public funds de-risking the private investment. The economist Daniela Gabor has likened this approach to getting investment giant Blackrock to rebuild Britain, privatizing “housing, education, health, nature and green energy — with our taxpayer money as sweetener.”
At the same time, Labour claims to be committed to a major improvement in workers’ rights. Its case for labor market reform, according to Shadow Chancellor Rachel Reeves, draws upon “a mountain of economic evidence that fair pay and in-work security are crucial, not only to fairness and dignity but to our productivity too.” However, many of Labour’s pledges on this front have already been watered down, delayed, or subject to consultation with business before implementation.
Labour’s response to DP World’s bluff is indicative of which way the party will jump in government when faced with a clash between workers and big business. This is important because DP World has form as a “rogue operator” with regards to workers’ rights long predating the P&O debacle. The firm has nevertheless enjoyed state support because its infrastructural investments have been central to the growth plans of successive governments.
“A Massive Vote of Confidence”
While there is a widespread view that Britain has a “light touch” approach to the regulation of its privatized port system, in fact, the state intervened multiple times to assist the establishment of the London Gateway port. It received planning permission in May 2007, just over a year after DP World acquired P&O. The proposed port was a major element of New Labour’s Thames Gateway Regeneration Initiative. Then transport minister Gillian Merron hyped “the significant impacts that this major development will have in the growth area.”
One key area of concern when the port was announced was the potential traffic stress it would cause on junction 30 of the M25, the major motorway that forms a ring around London. Planning was granted on the condition that London Gateway’s owners would fund an upgrade to the roads that was expected to cost somewhere in the area of £100 million.
After DP World was exposed to the fallout of the 2008–9 economic crash, the company announced that the London Gateway development was “under review” and told the British government that it should provide approximately £100 million of investment required to improve roads as it was a matter “of national importance.” Regional public bodies tasked with ensuring growth in the Thames Gateway area lobbied the government to deliver the improvements. DP World subsequently negotiated an agreement that allowed the firm to fund a minor upgrade to the road instead, costing around £10 million.
Later in 2009, the East of England Regional Assembly and East of England Development Board secured a £12.7 million grant from the European Union toward the cost of dredging the Thames estuary. This was meant to increase the depth of channels and accommodate the large container ships London Gateway was hoping to attract.
A loan of £300 million from the European Investment Bank finally assured the project could go ahead. As building began, Labour prime minister Gordon Brown hailed London Gateway as
a massive vote of confidence in the UK’s economic recovery and in this region. UK Trade & Investment and other Government departments have worked closely with DP World over a number of years to make this project possible.
While the state had bent over backward to ensure the port could be opened, DP World was far less accommodating to the interests of dockworkers seeking to exercise their rights to union recognition when the port opened.
Choke Points
From the Great Dock Strike of 1889 to the unofficial action by rank-and-file trade unionists that secured the release of the Pentonville 5, dockworkers have a long history of union organization in Britain. In 1989, Margaret Thatcher’s Tory government targeted the dock workforce, and the subsequent strike was defeated. This resulted in the loss of over 80 percent of the dock labor force, and almost all of the trade union activists. It took years of organizing to rebuild a solid union presence on the docks.
When the London Gateway port opened in 2013, the trade union Unite, which represents most port workers in Britain, had hoped to reach an agreement with DP World to gain similar recognition status as prevailed in other ports. However, DP World gave them short shrift, saying that they would only recognize the union if staff decided to set up a union themselves, while refusing Unite access to the workers onsite. One logistics industry publication reported that the company wanted to employ dockers who were “untainted by bad practices at existing ports.”
Unite ran a long “leverage campaign” against DP World, protesting noisily outside the offices of DP World and its supply chain customers in the hope of pressuring them to accept recognition. By the time London Gateway welcomed its first ship in November 2013, there was no agreement in place. It took the intervention of rank-and-file dockers blockading the ship at its first port of call at Algeciras in Portugal to force DP World to allow Unite into the port.
Even after DP World formally granted access, Unite found their progress frustrated by union avoidance tactics. While I was researching their organizing drive, London Gateway workers told me that the firm resisted union recruitment on site, emailing and speaking to dockworkers to dissuade them from joining the union. They used “propaganda,” which included showing footage of union activists from other ports jumping on a car carrying Boris Johnson, who was then the mayor of London, while they were protesting the company’s anti-union stance.
Although the union eventually reached the legal threshold for recognition, the company still refused to deal with them. Unite had to apply to the independent statutory authority responsible for adjudicating union recognition to overcome DP World’s objections.
In 2018, frustrated by DP World’s failure to address several areas of concern the union had, dockers decided to take action one weekend by targeting “choke points” in the supply chain — slowing down the operation of the giant cranes that lifted containers from ships. As one union member at the port told me:
On that Monday, the ball started rolling with management. Suddenly they wanted to listen and talk to us. It literally changed the next day.
In the ten years since, the Unite branch at London Gateway has grown in strength and depth. They have spread organization to several other departments at the port, including outsourced dockworkers employed by a contractor on lesser terms and conditions than the core workforce.
“Difficult to Discern”
In the wake of Britain’s departure from the European Union, Boris Johnson’s Conservative government announced that it would create several freeports across the country. These freeports, modeled on special economic zones (SEZs), are spaces where the authorities suspend normal tax and customs rules in the interests of boosting growth and creating jobs.
DP World enthusiastically promotes its involvement in SEZs. Yet even the World Bank has reported that such zones are places where union rights are often “legally constrained or de facto discouraged.” DP World is owned by the Dubai government, and trade union organization is illegal in Dubai and across the United Arab Emirates.
DP World London Gateway is a major partner in the Thames Freeport, which will receive “up to £25 million seed funding from government and potentially hundreds of millions in locally retained business rates.” In late October, Starmer declared the government would expand the scheme, making five already designated freeports fully operational for tax and customs breaks. He also confirmed it would push ahead with an “investment zone” in the East Midlands previously announced by the Tory government. This is a region where much of Britain’s logistics infrastructure is concentrated as part of the so-called “Golden Triangle.”
While Starmer claims the expansion of the scheme is based on “Labour’s laser focus on growth,” the evidence for this is extremely weak. The Office for Budget Responsibility suggested in 2021 that tax breaks associated with the already existing freeports in England would cost the government £50 million every year, in return for such a small impact on GDP from the freeports that it would be “difficult to discern.” These freeports, subsidized by public money, will merely “shuffle jobs and activity around,” as James Meadway points out, rather than create new opportunities for working-class people.
Rogue Operators
Freeports are a symptom of a much wider malaise in global capitalism. The state’s retreat from public provision has led to a big increase in the role of capital in providing critical infrastructure, increasing its political power and sway. Indeed, as Sandro Mezzadra and Brett Neilson suggest, capital increasingly operates as a political actor, working with and through the state to produce territories such as SEZs and freeports “of its own accord.”
Two interconnected processes over the last half century have accompanied dramatic changes to global production and capitalist planning. The logistics revolution has greatly increased cargo mobility, while offshoring from the Global North to the Global South has led to a new international division of labor that relies on complex, dispersed production networks. Increasingly, infrastructural investment in the Global North is based on logistics — ports, distribution centers, roads, trains — to keep the flow of products moving through territories where manufacturing has diminished.
It is this shift that underpins the efforts of successive British governments to placate DP World’s demands, as the company’s big investment in logistics brings jobs and infrastructure. However, behind the summits and headline announcements, logistics firms are all too often “rogue operators,” as Haigh put it, when it comes to workers’ rights. Amazon is another prime example of union-busting tactics in the logistics sector.
In part, this stance is motivated by fear of how effectively workers could exercise power in the sector. Kim Moody has argued that supply chains rely on millions of workers to keep the wheels of profit turning, giving those workers tremendous potential structural power. As Katy Fox-Hodess has shown, to exercise such power, workers need to find ways of organizing effectively, building in the workplace as well as forming alliances with wider social movements.
Such alliances also strengthen movements. The global movement against Israel’s genocide in Gaza has sought to block infrastructural targets, such as train stations and factories. Recently, dockworkers in the Greek port of Piraeus refused to move ammunition bound for Israel. Activists could learn from the Block the Boat campaigns in Oakland how best to strategically target the Israeli war machine in collaboration with organized logistics workers.
Labour’s commitment to a new deal for workers rings hollow as the Starmer government rolls out the red carpet for private finance to reap the profits of new infrastructure. But the lesson from workers at London Gateway is that strategic thinking and tenacious organizing can win big gains, even in the face of multinational logistics corporations.
Keir Starmer, as Leader of the Opposition of the United Kingdom during the: Repowering the World Session at the World Economic Forum Annual Meeting 2023 in Davos-Klosters, Switzerland, 19 January.
When Keir Starmer’s Labour Party won office in July of this year, there was precious little in the party manifesto that offered hope that things were going to get better. Two promises that stood out amidst nearly 150 pages of vague platitudes were a commitment to rebuild Britain’s “crumbling” infrastructure and a range of reforms to workers’ rights.
Both pledges were thrust onto center stage in early October as Labour unveiled its “Make Work Pay” legislation. At the same time, Starmer prepared for an investment summit at which DP World, which describes itself as “a leading provider of smart logistics solutions,” was due to announce a £1 billion investment in its London Gateway port in Essex.
On October 9, Transport Secretary Louise Haigh denounced DP World’s subsidiary company P&O Ferries as a “rogue operator” for illegally firing 786 staff in 2022 and replacing them with agency workers on lower pay. Within days, DP World had decided to shelve the London Gateway announcement, leading to a flurry of corrections from government sources.
“Louise Haigh’s comments were her own personal view and don’t represent the view of the government,” was the comment from an official in Starmer’s office, while Business Secretary Jonathan Reynolds told the BBC, “No, that is not the government’s position.” Starmer himself made a statement to that effect, leading DP World to issue the following statement:
Following constructive and positive discussions with the government, we have been given the clarity we need. We look forward to participating in Monday’s international investment summit.
Public Risk, Private Gain
Behind this rather farcical display of grandstanding and backtracking lies a serious contradiction. Labour has pegged its approach to the social crisis facing Britain to achieving higher levels of economic growth. They hope to do so through an expansion of infrastructural investment, ripping up current planning rules, and boosting labor productivity, which has stagnated since the economic crash of 2008.
Labour has announced a new National Wealth Fund to drive infrastructural investment. Yet the main source of investment will be the private sector. Instead of building nationalized infrastructure, the fund aims to attract £3 of private investment for every £1 of public money, with public funds de-risking the private investment. The economist Daniela Gabor has likened this approach to getting investment giant Blackrock to rebuild Britain, privatizing “housing, education, health, nature and green energy — with our taxpayer money as sweetener.”
At the same time, Labour claims to be committed to a major improvement in workers’ rights. Its case for labor market reform, according to Shadow Chancellor Rachel Reeves, draws upon “a mountain of economic evidence that fair pay and in-work security are crucial, not only to fairness and dignity but to our productivity too.” However, many of Labour’s pledges on this front have already been watered down, delayed, or subject to consultation with business before implementation.
Labour’s response to DP World’s bluff is indicative of which way the party will jump in government when faced with a clash between workers and big business. This is important because DP World has form as a “rogue operator” with regards to workers’ rights long predating the P&O debacle. The firm has nevertheless enjoyed state support because its infrastructural investments have been central to the growth plans of successive governments.
“A Massive Vote of Confidence”
While there is a widespread view that Britain has a “light touch” approach to the regulation of its privatized port system, in fact, the state intervened multiple times to assist the establishment of the London Gateway port. It received planning permission in May 2007, just over a year after DP World acquired P&O. The proposed port was a major element of New Labour’s Thames Gateway Regeneration Initiative. Then transport minister Gillian Merron hyped “the significant impacts that this major development will have in the growth area.”
One key area of concern when the port was announced was the potential traffic stress it would cause on junction 30 of the M25, the major motorway that forms a ring around London. Planning was granted on the condition that London Gateway’s owners would fund an upgrade to the roads that was expected to cost somewhere in the area of £100 million.
After DP World was exposed to the fallout of the 2008–9 economic crash, the company announced that the London Gateway development was “under review” and told the British government that it should provide approximately £100 million of investment required to improve roads as it was a matter “of national importance.” Regional public bodies tasked with ensuring growth in the Thames Gateway area lobbied the government to deliver the improvements. DP World subsequently negotiated an agreement that allowed the firm to fund a minor upgrade to the road instead, costing around £10 million.
Later in 2009, the East of England Regional Assembly and East of England Development Board secured a £12.7 million grant from the European Union toward the cost of dredging the Thames estuary. This was meant to increase the depth of channels and accommodate the large container ships London Gateway was hoping to attract.
A loan of £300 million from the European Investment Bank finally assured the project could go ahead. As building began, Labour prime minister Gordon Brown hailed London Gateway as
a massive vote of confidence in the UK’s economic recovery and in this region. UK Trade & Investment and other Government departments have worked closely with DP World over a number of years to make this project possible.
While the state had bent over backward to ensure the port could be opened, DP World was far less accommodating to the interests of dockworkers seeking to exercise their rights to union recognition when the port opened.
Choke Points
From the Great Dock Strike of 1889 to the unofficial action by rank-and-file trade unionists that secured the release of the Pentonville 5, dockworkers have a long history of union organization in Britain. In 1989, Margaret Thatcher’s Tory government targeted the dock workforce, and the subsequent strike was defeated. This resulted in the loss of over 80 percent of the dock labor force, and almost all of the trade union activists. It took years of organizing to rebuild a solid union presence on the docks.
When the London Gateway port opened in 2013, the trade union Unite, which represents most port workers in Britain, had hoped to reach an agreement with DP World to gain similar recognition status as prevailed in other ports. However, DP World gave them short shrift, saying that they would only recognize the union if staff decided to set up a union themselves, while refusing Unite access to the workers onsite. One logistics industry publication reported that the company wanted to employ dockers who were “untainted by bad practices at existing ports.”
Unite ran a long “leverage campaign” against DP World, protesting noisily outside the offices of DP World and its supply chain customers in the hope of pressuring them to accept recognition. By the time London Gateway welcomed its first ship in November 2013, there was no agreement in place. It took the intervention of rank-and-file dockers blockading the ship at its first port of call at Algeciras in Portugal to force DP World to allow Unite into the port.
Even after DP World formally granted access, Unite found their progress frustrated by union avoidance tactics. While I was researching their organizing drive, London Gateway workers told me that the firm resisted union recruitment on site, emailing and speaking to dockworkers to dissuade them from joining the union. They used “propaganda,” which included showing footage of union activists from other ports jumping on a car carrying Boris Johnson, who was then the mayor of London, while they were protesting the company’s anti-union stance.
Although the union eventually reached the legal threshold for recognition, the company still refused to deal with them. Unite had to apply to the independent statutory authority responsible for adjudicating union recognition to overcome DP World’s objections.
In 2018, frustrated by DP World’s failure to address several areas of concern the union had, dockers decided to take action one weekend by targeting “choke points” in the supply chain — slowing down the operation of the giant cranes that lifted containers from ships. As one union member at the port told me:
On that Monday, the ball started rolling with management. Suddenly they wanted to listen and talk to us. It literally changed the next day.
In the ten years since, the Unite branch at London Gateway has grown in strength and depth. They have spread organization to several other departments at the port, including outsourced dockworkers employed by a contractor on lesser terms and conditions than the core workforce.
“Difficult to Discern”
In the wake of Britain’s departure from the European Union, Boris Johnson’s Conservative government announced that it would create several freeports across the country. These freeports, modeled on special economic zones (SEZs), are spaces where the authorities suspend normal tax and customs rules in the interests of boosting growth and creating jobs.
DP World enthusiastically promotes its involvement in SEZs. Yet even the World Bank has reported that such zones are places where union rights are often “legally constrained or de facto discouraged.” DP World is owned by the Dubai government, and trade union organization is illegal in Dubai and across the United Arab Emirates.
DP World London Gateway is a major partner in the Thames Freeport, which will receive “up to £25 million seed funding from government and potentially hundreds of millions in locally retained business rates.” In late October, Starmer declared the government would expand the scheme, making five already designated freeports fully operational for tax and customs breaks. He also confirmed it would push ahead with an “investment zone” in the East Midlands previously announced by the Tory government. This is a region where much of Britain’s logistics infrastructure is concentrated as part of the so-called “Golden Triangle.”
While Starmer claims the expansion of the scheme is based on “Labour’s laser focus on growth,” the evidence for this is extremely weak. The Office for Budget Responsibility suggested in 2021 that tax breaks associated with the already existing freeports in England would cost the government £50 million every year, in return for such a small impact on GDP from the freeports that it would be “difficult to discern.” These freeports, subsidized by public money, will merely “shuffle jobs and activity around,” as James Meadway points out, rather than create new opportunities for working-class people.
Rogue Operators
Freeports are a symptom of a much wider malaise in global capitalism. The state’s retreat from public provision has led to a big increase in the role of capital in providing critical infrastructure, increasing its political power and sway. Indeed, as Sandro Mezzadra and Brett Neilson suggest, capital increasingly operates as a political actor, working with and through the state to produce territories such as SEZs and freeports “of its own accord.”
Two interconnected processes over the last half century have accompanied dramatic changes to global production and capitalist planning. The logistics revolution has greatly increased cargo mobility, while offshoring from the Global North to the Global South has led to a new international division of labor that relies on complex, dispersed production networks. Increasingly, infrastructural investment in the Global North is based on logistics — ports, distribution centers, roads, trains — to keep the flow of products moving through territories where manufacturing has diminished.
It is this shift that underpins the efforts of successive British governments to placate DP World’s demands, as the company’s big investment in logistics brings jobs and infrastructure. However, behind the summits and headline announcements, logistics firms are all too often “rogue operators,” as Haigh put it, when it comes to workers’ rights. Amazon is another prime example of union-busting tactics in the logistics sector.
In part, this stance is motivated by fear of how effectively workers could exercise power in the sector. Kim Moody has argued that supply chains rely on millions of workers to keep the wheels of profit turning, giving those workers tremendous potential structural power. As Katy Fox-Hodess has shown, to exercise such power, workers need to find ways of organizing effectively, building in the workplace as well as forming alliances with wider social movements.
Such alliances also strengthen movements. The global movement against Israel’s genocide in Gaza has sought to block infrastructural targets, such as train stations and factories. Recently, dockworkers in the Greek port of Piraeus refused to move ammunition bound for Israel. Activists could learn from the Block the Boat campaigns in Oakland how best to strategically target the Israeli war machine in collaboration with organized logistics workers.
Labour’s commitment to a new deal for workers rings hollow as the Starmer government rolls out the red carpet for private finance to reap the profits of new infrastructure. But the lesson from workers at London Gateway is that strategic thinking and tenacious organizing can win big gains, even in the face of multinational logistics corporations.
