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Unlike the situation in the publicly owned electricity companies of France, there are no recruitment targets in agreement with the unions in the UK privatised utilities. On the contrary, job reduction has been seen by these companies as a principal method of achieving savings and providing greater returns to shareholders.
A study by accountants suggests that this is the result of a conscious strategy of providing increased dividends to shareholders by reducing the workforce. The study, which covered all UK privatised utilities, including BT, shows that the combined privatised utilities "sacked nearly 25% of its workforce, some 100,000 workers, since privatisation. All of these jobs could have been sustained if the cash distributed as dividends had instead been applied to paying wages at the average rate prevailing inside the companies" (Karel Williams et al, Guardian 20.11.95). The table shows their calculations for the energy and water companies.
Table 5.5 Employment and dividends in UK energy and water utilities
|
Company and year of privatisation |
Year end |
Dividends paid in latest year (£m) |
Numbers employed year after privatisation |
Numbers employed in latest year |
Numbers that could have been employed in latest year if wages had been paid instead of dividends. |
|
British Gas (1984) |
1994 |
631 |
91,900 |
67,300 |
90,800 |
|
Water companies (1989) |
1993 |
478 |
40,600 |
39,600 |
56,000 |
|
National Power & Powergen (1990) |
1995 |
300 |
23,300 |
9,600 |
18,600 |
|
Regional electricity companies (1990) |
1994 |
515.1 |
81,800 |
69,000 |
92,500 |
Source: Karel Williams et al, Guardian 20.11.95
Job reductions in all sectors have continued since this analysis was published, and mergers and takeovers in the UK have also brought significant job reductions. For example when North West water took over the regional electricity company NORWEB to form United Utilities, the company announced that it would be shedding 2,400 jobs in order to finance the costs of the takeover.
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