263 UK jobs will soon be lost when Twinings transfers tea processing operations from North Shields to a controversial Polish site, while 129 staff in Andover will also lose their jobs from April when UK operations are streamlined into their site.
In late March, EU employment commissioner László Andor met MEPs Keith Taylor, Peter Skinner and Stephen Hughes at a meeting in Brussels to discuss their, and trade union USDAW’s, demand that Twinings repay a €12m (£10.6m) Polish site grant.
Andor also said that the EC would welcome an application from the UK government (specifically the Department for Work and Pensions or DWP) to pay funds to Twinings workers under the Globalisation Adjustment Fund (GAF).
The GAF reserves €500m (£441.35m) of EU funds each year to help workers "severely and personally affected by trade-adjustment redundancies", and provides money for such activities as finding work, specialised retraining and self employment.
Taylor said at the time that the MEPs would write to the DWP asking them to apply, but warned that no British government has ever applied via the GAF, although other member states (in particular Ireland and Denmark) have used it extensively.
Pressure on DWP
Asked this week whether the DWP would support a GAF application in this case, a spokesman for the department told FoodManufacture.co.uk that employment minister Chris Grayling would respond to the letters he received.
Pressed on why no British government to date had applied for GAF funding, he added: “Broadly speaking it’s because the services the funding would provide are already available through Jobcentre Plus.”
But Northeast MEP Hughes said in response: “We all know the real reason. It’s because the funds will come out of the UK’s annual budget rebate, which goes to the Treasury, rather than to the Northeast of England.”
He explained that GAF funding was drawn from the ‘margins’ or surplus of the EU budget, but that the UK government was losing money by failing to apply because its rebate was being eroded anyway, as other EU states siphoned off GAF funds.
Clever legal team
Hughes said: “Only last week the Czech Republic and, ironically enough, Poland applied. So other countries are getting part of our rebate – it is criminally stupid not to apply.”
The DWP spokesman added: “Our key concern is that anyone who is made redundant [from Twinings] can benefit from first-class help and support from Jobcentre Plus to ensure they can move back into work as quickly as possible.
“We are improving the service Jobcentre Plus provides so that everyone who needs it will get the support that's right for them."
But Hughes said that even if Jobcentre Plus could provide some services: “Some of the funding from the GAF can provide specialist support … that can allow people to setup their own businesses, retrain or become self-enployed.”
Hughes added that he was still awaiting a response from EC commissioner for regional policy Johannes Hahn on whether Twinings followed the rules when it applied for the Polish grant.
Waiting for Poland
The EC has been pressing Polish state officials since last summer to reveal what assurances they "sought or received" from Twinings that the €12m would be used for regeneration, not production relocation, where the latter employment of such a grant is illegal under EU law.
Hughes said he expected the Polish government to report that there was no problem with the application, and added that when he last spoke to Hahn, the latter took the view that Twinings had complied with all the rules in its funding application, but might have exploited a legal loophole to secure funding.
Hahn wrote to Keith Taylor last November, stating that when Twinings' Polish subsidiary applied for EU funding, “it was still considered an SME, despite the company meeting the headcount and financial threshold for…a large enterprise”.
He added that this was because under EU Regulations, “the company will only become a large enterprise once the headcount and financial thresholds have been exceeded for two consecutive accounting periods, i.e. at the start of 2011.”
Hughes said that if it emerged that, in his words, Twinings’ “clever legal team” had bypassed a loophole to secure funding for the Polish site, Hahn had indicated to him that the EC would work with MEPs to close it.