Branch Secretary :

Profits up 70% since 2019


First report from Unite's profiteering commission


In eight months since Sharon Graham was elected Unite General Secretary she has "led 52,000 members into more than 300 disputes... Unite has won three out of four.. past few months alone, workers at Gatwick have scored a 21% pay rise, those at Devonport dockyard in Plymouth have won 13%, and employees at the BMW Mini plant in Oxford.. 21% over next 3 years" as an interesting Guardian article by Aditya Chakrobortty reports.


Both the Guardian and Mirror both cover the first report from Unite’s Profiteering Commission which shows that the average profit margin of FTSE 350 companies had gone up by over 70% since 2019. Workers can & should demand a pay rise - profits drive up inflation, not wages.



The Unite report ‘Corporate Profiteering and the Cost of Living Crisis’ argues that it is time to demand restraint on profiteering not pay.


FTSE 350 profits rocket


An analysis of the FTSE 350 reveals profit margins for the UK’s biggest listed companies were 73% higher in 2021 than pre-pandemic levels in 2019. Even though sales were down in 2021, profits still rocketed.  Even removing energy companies from the tally, average profit margins still jumped an astonishing 52%.


Unite general secretary Sharon Graham said: “The weight of evidence shows that the UK is in the grip of a profiteering crisis. Workers’ wages and what they can buy, are being squeezed by corporate wreckers pursuing runaway profits, quite literally at our expense.”


UK wide company profits fuel inflation


A further examination of data from the Office for National Statistics (ONS) shows that company profits jumped 11.74% in the six months from October 2021 to March 2022. In the same period labour costs fell by 0.8%, accounting for inflation. 


This jump in UK wide company profits is responsible for 58.7% of inflation in the last half year – as opposed to just 8.3% due to labour costs.


The Governor of the Bank of England, Andrew Bailey and the Prime Minister Boris Johnson have both pointed the finger at workers’ pay warning of a ‘wage price spiral’. But the weight of evidence clearly shows workers’  wages, and what they can buy, are being squeezed by companies pursuing runaway profits.


Sharon Graham said: “The Governor of the Bank of England and Boris Johnson want workers to think it’s irresponsible to demand better wages to pay for crippling food and energy prices. But Unite’s report exposes the truth. It’s not hard pressed workers who are driving inflation, it’s whole swathes of corporate Britain. In the last six months company profits were responsible for almost 60% of inflation.”


High inflation was initially sparked by supply chain shocks. But there are strong signs that “price gouging” – where businesses hike their prices above supply costs – are now pushing a “second round” of inflation. So while the pandemic, energy demand and the invasion of Ukraine have undoubtedly caused ruptures in supply chains, any “inflation spiral” is being pushed by profits. 


Average executive pay increased to £2.59 million


The report also exposes how corporate executives have benefited from these rising profits. Between 2020 and 2021 average pay for the highest paid directors of the UK’s biggest listed companies leapt a colossal 29% from £2.01 million in 2020 to £2.59 million in 2021. 


Sharon Graham continued: “It’s not just energy companies. There are businesses right across our economy and their directors who have made vast sums of money from Covid 19 and the inflationary pressures that have followed.


“Those who have profited from the crisis should pay for it. Unite makes absolutely no apologies for demanding better pay for our members. Wage restraint? It’s time to demand profit restraint.”


Professor of accounting Prem Sikka, Member of the House of Lords said: "This report focuses upon corporate profiteering, the resulting hardship and the government's failure to tackle it.  Profits for the few are the source of crisis for many. It could not be more timely.”


Read the full report here.


17 June 2022



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