Twinings' cosy trip to Poland blocked by EC

Twinings has lost a multi-million pound EU handout to help it move to Poland. Will it take back the 260 people it sacked then?

by Dave Waller
Last Updated: 06 Nov 2012
The tea-maker’s bosses should have perhaps read this outcome in the tea-leaves: Twinings was all set to move its production to Poland – encouraged by the Polish government’s assertions that the new plant would get a £10m EU development grant. Trouble is, the grant was only for small businesses, and the European Commission has now spoilt the party by pointing out that Twining’s doesn’t qualify.

Of course, in the current climate you can hardly blame a company for trying to reduce its overheads. But the Commission pointed out a couple of key stumbling blocks: not only should Twinings have been considered a ‘large enterprise’, but the grant money is intended for creating new jobs, not for taking them from one country to another. As such the Commission requested that the Twinings plan be abandoned.

Twinings hasn’t exactly won a lot of friends with all this. As part of its cost-cutting drive, the company had closed its factory in North Shields, shedding 260 jobs and incurring the wrath of Parliament and the public: 22 MPs signed a Commons motion condemning the plan, and 4,000 people joined a Facebook campaign against it.

And it wasn’t just a storm in a tea cup: the company had said it didn’t need external funding for its plan to go ahead, but it had applied to the Polish authorities and got assurances it would be eligible for EU handout. Given that EU aid is part-funded by UK taxpayers through the country's EU budget contributions, people were miffed that they’d be paying to have a key local employer shut down and up sticks. No doubt these opponents are now sweetening their afternoon drink with two spoons of schadenfreude.

So what happens next? The Polish authorities could consider giving Twinings a £10m grant direct from its own pocket - but Brussels may still turn its nose up at that, as it could breach EU state aid rules. And it’s hardly like the UK is thriving right now. We need employers to stay here. Time perhaps to wake up and smell the coffee.

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