Manager - just a man, an innocent man.
Privatising British Gas & Management secrets of the 1970s.
In December 1985 the Secretary of State for Energy, Peter Walker, expressed his regret that the post-war nationalisation had not resulted in the full collectivisation of the industry:
“Looking back on the hopes and aspirations expressed, and the speeches made, in those nationalisation debates, it is sad to reflect that in practice the idealistic hopes of those who nationalised in the 1940s have not been achieved. In reality, we have not seen the ownership of industries by the people, the employees or the customers, but direct ownership primarily in the hands of the politician and the civil servant. For that reason, my view is that, rather than coming under the constant pressure of Whitehall and the current politician in charge, it is far better in the interests of the country to ensure that commercial managers have charge of those industries.”1
He was introducing the second reading of the 1986 gas bill which would see the Thatcher government selling off the British Gas Corporation. Privatisation was presented as a way to create genuine public ownership, with hindsight this position is obviously unhinged. The ruse was transparent to the opposition including Tony Benn who responded like this:
“The real motivation for the Bill should be spelt out with absolute clarity, as the Secretary of State did not touch on it. It is to sell assets, which the Government do not own, to their business friends, who will buy the assets at knockdown prices. It is to pay City institutions enormous fees to sell the assets and to use the proceeds for a once-and-for-all tax cut to buy support at the next general election.”
Facing a cost of living crisis partly because of a rapid increase in energy prices the current conservative government does not have the advantage of being able to sell off more assets, as so many have been disposed of already. The reluctance to cut taxes is surely due to the fact that the treasury does not have the same capacity to dispossess the public of their stake in national infrastructure. This strategy of ‘accumulation by dispossession’ – as David Harvey termed it, depends on their being something to dispossess. In the context of energy the government has little power to limit the pricing of energy, nor does it have the ability to threaten it with being sold off. The windfall tax is a brute exercise which takes back some of the money but none of the power over the industry.
The cost of living crisis makes it hard to raise funds through austerity, particularly after almost fifteen years of cost cutting and asset stripping. It may well be that austerity has found its limit, it would be nice to think so. Current industrial action being undertaken by the RMT in response to threats to jobs, poor working conditions, and below inflation pay rises despite inflationary increases to train fares. This appears to be the first of a wave of industrial action, another summer of discontent? The government can no longer rely on the public to absorb the losses whilst shareholders continue to reap the profit. In their press release the RMT write: “We want a transport system that operates for the benefit of the people, for the needs of society and our environment – not for private profit”2. This statement recalls the mission statement for the British Gas Corporation as laid out in the 1972 Gas Bill:
“It shall be the duty of the Corporation to develop and maintain an efficient, co-ordinated and economical system for gas supply of Great Britain, and to satisfy, so far as it is economical to do so, all reasonable demands for gas.”
However – as Peter Walker recognised, however cynically, the state of nationalised industry in the 1970s was not exactly one of radical collective power.
In my first visit to the wonderful National Gas Archive in Warrington I chanced across a pamphlet prepared by the showroom manager for the central area of north east gas. An elegantly presented document which I think was based on a talk given by someone called G Morley in 1975. It focuses on the importance of managerialism and duty there is no real mention of profit. It is hard to imagine such a document being disseminated within an energy company today.
The pamphlet includes sections such as Manager – Just a man and Company Man. In the Company Man chapter Morley reflects on the role of the manager to know the objectives of their company and co-ordinate effort so that “the destructive elements of inter-departmental conflict and confusion are kept at bay”. Citing the passage from the 1972 act above Morley writes that “All managerial effort in the Nationalised industry should be directed towards achieving these ultimate goals”. He goes on to detail in various ways his thoughts on management, particularly the emphasis on co-ordination, departments that work together, he concludes that “above all it is about managers working together with common purpose, towards common objectives, intent on the preservation of a way of life.”
There were probably only a few copies of this typewritten and photocopied pamphlet produced, though the elegant cover suggests there was some care taken over its production. Perhaps they will have sat on the desks of showroom managers in the area until they were eventually disposed of when the piles of papers grew too high. But it seems to me that this document captures a certain kind of bureaucratic social democratic attitude that was so loathed by Margaret Thatcher’s government in the 1980s.
It also represents its own kind of conservatism, one which is about preserving a hierarchy and bureaucracy in the service of the ethereal idea of ‘national good’, a concept which retained a certain post-colonial nostalgia. Morley – a regional manager with a good turn of phrase – seems to have been committed to corporate orthodoxy, and in this sense Walker’s critique of the nationalised industry as remaining in the hands of the politician and the civil servant seems reasonable. On the other hand 44 years of privatised gas has demonstrated that this infrastructure is no better in the hands of commercial managers.
Peter Walker’s disdain for paternalistic and managerial state-owned democracy pre-dated Thatcher’s reign however. Despite a reputation as a ‘one-nation’ Tory he had been one of the original ‘Selsdon Men’, the Conservative politicians who met in a hotel in Croydon to plan a manifesto for Ted Heath which would announce a lurch to the right for the conservative party. A set of libertarian policies which were ridiculed at first but would be influential in the long run. Peter Walker was an asset stripper both politically and professionally. His son is a minister in the current government and MP for Worcester just as his father was.
Peter Walker profited significantly from the opportunities for private commerce which came after the privatisation of British Gas. Until 1986 the corporation had a near monopoly on appliance sales. In his constituency was the company Worcester Engineering, later Worcester-Bosch a successful boiler maker. In 1973 Walker helped refinance the failing company and made an investment of £10,0003. The company stopped producing oil boilers and moved to gas instead. By 1990, four years after the privatisation of British Gas, the business was worth £45 million, and Walker’s shares were worth £540,000. Walker, like many politicians on all sides of the house of commons appears to have benefited financially from the assets which were dispossessed from the public and put into private hands.
British Gas, like many other aspects of national infrastructure in the U.K. was the victim of a reactionary and neo-liberal campaign to demolish nationalised industry in favour of the profit of wealthy individuals, often including the politicians behind the policies. But as the current government faces down a cost of living crisis perhaps some may have the wherewithal to regret ceding control over infrastructure to industry. With pained expressions the Conservative party has now been forced to levy a windfall tax on an industry whose entire profits once belonged to the state as a matter of course.
I cannot help but look back nostalgically at the era of nationalised industry. Particularly the idea of providing infrastructure without the profit-motive at the heart of the approach. But the meandering banality of Morley’s reflections on being a manager are a reminder of the limitations of uncritical nostalgia for the post-war state. Were our gas companies today ran by people like Morley they may take a different attitude towards price and profit. But the innate conservatism of such company loyalty might not be much better at tackling the greater issue of overhauling the provision of energy in order to mitigate the damage that we have done to the climate.
https://hansard.parliament.uk/Commons/1985-12-10/debates/ba45a1b3-7d17-45b6-b8de-434a23f1840b/GasBill
https://www.rmt.org.uk/news/rmt-statement/