BT boss Jansen hit by threat of strike chaos

Furious union launches ballot over chief’s plan to cut jobs – and it could cripple broadband

TENS of thousands of BT staff are set to vote on strike action in a fresh blow to beleaguered chief executive Philip Jansen.

The Mail on Sunday can reveal that the Communication Workers Union – representing 45,000 BT staff – will tomorrow kick off the formal legal process to ballot members for the telecom giant’s first national strike since 1987.

The union is furious at Jansen’s attempts to rapidly modernise the former state monopoly, with plans including the closure of about 270 offices and compulsory redundancies that could run into thousands.

The Mail on Sunday understands the CWU expects a large majority of workers at BT, EE and infrastructure division Openreach to vote in favour of industrial action with walkouts likely from May.

A spring strike would raise the prospect of internet outages before the Covid lockdown is fully lifted, and while millions of people are still being asked by the Government to work from home.

The decision to launch a strike ballot tomorrow will deliver an untimely blow to Jansen after several weeks of damaging stories about boardroom unrest.

City veteran Jan du Plessis earlier this month announced plans to retire as BT chairman after just four years.

It has since been claimed that Jansen prompted him to jump by threatening to resign unless a new chairman was appointed.

Jansen, who was brought in as chief executive in February 2019 to modernise BT, is said to want a chairman who will support a much faster pace of change.

BT has downplayed the unrest, denying any ‘misalignment’ between board and management and praising du Plessis.

But it did not refute claims that Jansen had issued an ultimatum before du Plessis revealed plans to step down.

The threat of strikes comes as regulator Ofcom this week publishes its long-awaited Wholesale Fixed Telecoms Market Review, which will determine the pace – and financial returns – on BT’s £12billion upgrade of Britain’s broadband network.

Jansen is also under pressure from a court case over an accounting scandal in Italy, which resumes next month, while a review of BT’s pension fund in May is expected to show a £9billion deficit.

The CWU’s threats are a response to BT’s plan to slim down its operations from 300 to 30 UK sites. The plans have angered workers. Unions say staff face ‘postcode redundancy’ if they live too far away.

CWU deputy general secretary Andy Kerr said BT is in ‘denial’ at the prospect of strike action.

‘People are at risk of redundancy, not because they’re not good at their job, not because their role is going, only because they live somewhere that it doesn’t suit BT for them to live,’ he said.

‘Our argument is you could have these people working remotely. You’re a technology company that’s selling this technology to everybody else to allow them to work remotely, but you’re not using it as much as you should be in your own company.’

Kerr claimed BT is refusing to share the details of its plans, which meant negotiations could not begin. He also said staff had been refused pay rises.

Kerr said du Plessis was ‘more accommodating and more cautious’ than Jansen, ‘who is used to moving quickly, at a private equity pace’.

Before BT, Jansen was hired by payments giant Worldpay’s private equity backers and floated it, before later making an estimated £34million from its 2017 sale.

The CWU is a formidable opponent. Last year, Royal Mail chief executive Rico Back was ousted after a long-running dispute with the union.

Kerr added: ‘Philip Jansen is underestimating the power of the union.’

He pointed out that the CWU had not considered significant industrial action since 2010. ‘We’re still willing to work with the company, but we need to be listened to,’ he added.

In a consultative survey before Christmas – involving 74 per cent of the union’s BT members – 98 per cent voted for action.

BT’s share price has collapsed from £4.47 five years ago to £1.37 today.

A BT spokesman said: ‘BT needs to go through a period of immense change and investment to modernise itself. Once complete we will have a much simpler operating model with fewer people and we’ll be better able to serve our customers.’

Michael Hewson, chief markets analyst at CMC, said: ‘Industrial action doesn’t help anybody. If you go down that route, then both sides have lost.’

INFLATION never goes away. It just sits there, lurking and growling in the background until it has a chance to burst out again. In the past couple of months those growls have become louder. You cannot hear them yet in the official inflation numbers, which show consumer prices up only 0.9 per cent year-on-year here in the UK and 1.7 per cent in the US. But look at what is in the pipeline.

The oil price last autumn was below $40 a barrel. Now it is close to $70 a barrel and that is before most of the world economy opens up. Copper, a key metal for renewable power systems, was trading around $6,000 a ton for most of last year. Now it is $9,000 a ton.

Or take shipping costs. In 2019, before the pandemic, and for most of last year, it cost around $1,500 to ship a 40ft container from Shanghai to Rotterdam – from the world’s largest container port to Europe’s largest port. Now it is more than $8,000.

Look at chips, semi-conductors, a key component in just about everything electronic right now. The price of a basic 4GB RAM chip was below $2 for most of last year. Now it is $2.75.

Perhaps most troubling of all because it is the form of inflation that hits the poorest people hardest, food prices are climbing. The Food and Agriculture Organization – part of the UN – reports that last month food reached a six-year high, with basics such as sugar and vegetable oils leading the charge.

We can’t know how quickly these pressures will work through to prices in the shops, restaurants, and so on because the world has never been shut down like this in peacetime. In particular, we don’t know what will happen to wages when the jobs return.

They are the largest single cost for most businesses, so if they start climbing, companies have no option but to increase their prices. My guess is that pay will indeed rise quite sharply but there will be a lag as everything struggles to get back to normal. Prices will go up first, then pay will follow.

How high will inflation go? Well, not to the double-digit levels that some of us remember from the 1970s and 1980s, but I would not be surprised if the consumer price index reached 4 per cent by the end of this year. That is way above official forecasts. The official view in the US Federal Reserve and the European Central Bank is that if there is a surge in inflation it will be fleeting.

As for the Bank of England, we will see what they say after the Monetary Policy Committee meeting this coming week. Andy Haldane, chief economist, has said he is worried, but the other MPC members seem less so. My fear is simply that once inflation gets embedded it is extremely hard to scrunch it back down.

There is, of course, one form of inflation that everyone should worry about: what has been happening to house prices. They are really taking off in the US, with average prices up more than 11 per cent last year. Here in the UK they were up 8.5 per cent.

Quite aside from all the social issues this raises – that it is nice for established home-owners, but not so nice for people struggling to find somewhere to live – you cannot expect people to believe that inflation is below 1 per cent when the price of a home has risen by more than eight times that amount.

Back in the 1970s and 1980s, that form of inflation pitted workers against their employers. As prices soared, workers went on strike to try to claw back their losses as the real value of their wages shrank. As a result we had two decades of dreadful labour unrest. The present form of inflation, asset inflation in general and surging home prices in particular, pits the young against the old. The tensions may be less obvious but they are just as divisive – and sometimes more painful if they happen within families.

So what should we try to protect ourselves from the coming bout of inflation? We don’t know when it will come or how serious it will be, but the rules are the same as they were a generation ago. Anyone with savings should make sure these are in assets that give some protection, such as property and shares of solid companies. Keep as little as you need in the bank, and don’t hold bonds except perhaps for index-linked ones. Borrow money but only for investment. Pay off those credit card bills.

This is basic stuff, but worth doing anyway. Perhaps too we should take comfort in Shakespeare’s poem: ‘Crabbed age and youth cannot live together...’ Tension between young and old is not so novel – and we, like the Elizabethans, have to make it work.

Most troubling of all is that food prices are also rising