Crisis Management in the Power Industry

An Inside Story

Frank Ledger, Howard Sallis

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351394291
• Edition: 1
• Topic: Business
• Subtopic: Energy Industry
• Index: Business

This book, originally published in 1995 is a study of crisis management in the electricity supply industry during the 20th century. The full implications of the vulnerability of the industry are examined, with special reference to past industrial action. The authors were well placed to know how close the industry came on more than one occasion to disaster. In the wake of privatisation challenging and controversial questions are asked, which are of fundamental importance to the economy, quality of life and political stability of the country. An account is also given of the past structure, technology and industrial relations of the industry. This volume is an excellent case-study for students of post war politics, public sector management and industrial relations.

Chapter 1

Britain’s most vulnerable industry in perspective

Many ordinary people know more about plastics and computers than they do about electricity supply. Many scarcely ever think about it, even though a moment’s thought would yield a stark picture of life without it.

THE VULNERABILITY OF ELECTRICITY SUPPLY

Electricity supply is infinitely more fundamental to the economy, to transport, to life itself than the source of the TV that enlivens our evening, the light to find our way to bed and the kettle to make our morning tea. The full implications of its loss would begin to dawn when travel to work was affected by the absence of street lighting, the crippling of petrol pumps and the cessation of electric trains and signals. The next stage would be no work to go to, with factory plant out of action, tills and typewriters silent, computers blank. Gas ceases to flow. Telephone and postal services collapse. Water supplies and sewage disposal cease. Food shortage is accelerated by lack of refrigeration. But the seriousness of the situation would stun us even more if we had sickness in our home or a member of the family on dialysis. The fact that electricity cannot be stored adds to its vulnerability.

Few people know how close we have come on more than one occasion to a disaster of this kind. From 1948 the publicly owned electricity supply industry had a statutory obligation to maintain public supplies. Despite serious temporary inconveniences endured by consumers during successive crises, especially in the 1970s, the public never seemed to believe that the ultimate nightmare could become wide-awake reality.

THREATS AND TREMORS

For this reason and others this book needed to be written; it recounts the threats to electricity supply that occurred well within one lifetime, and the industry’s response. The book appears, as it happens, during the tenth anniversary of the 1984–5 miners’ strike, which brought the unthinkable nearer than trembling distance. Strange that in the spate of political memoirs published by leading political figures of the 1980s, culminating in those of Baroness Thatcher, little has been written about how electricity supply, specifically the Central Electricity Generating Board, responded to this threat. Yet failure on the part of the CEGB would have changed the course of history.

As we imply, there is more than one dramatic story in this book. It is true that the miners’ strike of 1984–5 brought into use all the crisis management skills learnt in previous episodes; that its risks in political terms and the implications of failure both for the mining industry and the government were dramatic; that its human and community aspects called for immense sensitivity; and that its media interest was high and sustained. It is also true that, as the tenth anniversary recalls memories, the strike could well seem the most important event recounted in this chronicle of years of managing crises in power supply. It should be seen rather as a major but not isolated experience in meeting threats to a vital industry, all with common dangers and challenges. In fact other episodes displayed single even more dramatic features: political dangers shown to be more than rhetoric; the public severely inconvenienced, though never on a wide enough scale or for long enough to bring home the nightmare possibilities; industry seriously disrupted, and so on.

The chapters that follow relate the story of a succession of major disputes from the 1926 strike onwards. All demonstrate how the importance and inherent vulnerability of the industry have several times led groups of people either inside or outside to use this to bring pressure to bear on employers or the government. The objectives have been higher pay, better working conditions or the abandonment of plans for change.

WHAT CRISIS MANAGEMENT MEANS IN A BASIC INDUSTRY

The industry’s responses demonstrate crisis management at its most demanding. Any undertaking may at some time have to confront events that, whether or not foreseen, whether or not possible to prepare for, are outside its daily experience. They are hostile. They threaten, either from inside or outside the undertaking, its ability to meet its objectives, the public confidence it commands, its very survival. They tax its resources and the skills of its managers, who know that failure to cope will have serious consequences for the organisation, its employees and its customers.

In extreme cases failure could threaten the stability of the community. Sometimes failure can be prevented by the application of well-tried techniques. More often the task will need exceptional measures and stratagems. This is the interest of the events recorded here for all those who might at some time be involved in crisis management.

Crises must, if possible, be foreseen. This is the first task of those responsible for management information, whose writ extends beyond its own markets and production problems to events and conditions in other industries, economic intelligence, raw material supplies and prices, national and local politics, the law, and the preoccupations of organised labour. There must be structures in place to chart and predict the course of events and the appropriate responses.

Plans must include the maximum flexibility of access to raw materials and other essential supplies and transport. Well in advance the roles and responsibilities of managers in a crisis must be clearly delineated, combining firm strategy at the centre with scope for rapid responses at local level where appropriate. Flexibility at operational unit level in organising responses, safe-guarding supplies, and monitoring events is crucial. This makes communication between the centre and operating units all important, if the crisis is to be managed always at the appropriate level. Management information services remain crucial as the crisis develops.

It follows that relationships assume vital significance if well-informed and highly motivated responses at various levels are expected: industrial relations must be well managed for remedial actions to be understood and supported by employees. If a basic industry is involved it is essential to manage the media presentation of the crisis well and to ensure that consumers are informed of developments and dealt with as far as possible on a basis of equality in any necessary restrictions of supply. If the crisis has originated in one’s own enterprise, management must be seen to be seeking a solution with a proper sense of urgency. If the trouble arises elsewhere great sensitivity is needed to avoid appearing to become a participant in someone else’s dispute or to provoke those involved. Finally management must never forget that when the crisis is over it will be necessary to resume normal operations and restore effective working relationships within and between undertakings.

A STORY WAITING TO BE WRITTEN

Much of the material used in this narrative has been drawn from the industry’s own archives and those of the Public Record Office, from consultation with others directly involved and from direct personal experience. Much of it has not been published before and this is particularly true in the case of the miners’ disputes of the early 1970s and 1984–5. Indeed it could not have been told before, for a number of reasons.

At the time, and for some years afterwards, there were strong tactical reasons for keeping quiet about the dangers to electricity supply and the strategies for overcoming them. There was also sensitivity to the feelings of many CEGB employees who lived in mining communities and mining homes. The CEGB did not want to be or appear to be a participant in the government’s and the National Coal Board’s fight against the National Union of Mineworkers and the striking miners, and it played its statutory responsibility straight down the middle. In recent years, however, the threat of a strike of the same kind to electricity supplies has for various reasons become small. The electricity supply industry has changed its structure through privatisation in ways that would make any future crisis significantly different. There is no reason now to hold back a story of great public interest and importance.

COULD IT HAPPEN AGAIN?

In the wake of the privatisation of the electricity supply industry, we can now ask challenging and controversial questions that have not been asked before and that are of fundamental importance to the economy, the quality of life and even the political stability of the country. Is the privatised industry more or less vulnerable to internal or external assaults on its capacity to maintain a public electricity supply than it was under public ownership and other forms of organisation? Where if anywhere could those assaults possibly come from? Do changes in the strength of other related industries and in trade union law have a decisive influence? Are the government’s and the industry’s crisis management arrangements capable of meeting any new threats effectively in the future?

These questions are examined in the final chapter of the book, but their importance here is that knowing them in advance as each crisis is recounted gives the reader a chance to ask what bearing the organisation of the industry at the time and the structures in place to manage the crisis had on the outcome. Seeing the narrative in this organic way will provide some of the material to answer those final questions.

The events described took place under different forms of ownership and organisation, at different stages in the advance of technology, and with different policies, practices and constraints in industrial relations and the relevant law, changes not all perhaps as dramatic as nationalisation in 1948 or privatisation in 1990, but significant. A full account of the changes in structure, technology and industrial relations is given in Appendix 1. Here we attempt only a brief guide, one long enough to make what follows intelligible but not so long that it impedes the flow of the story.

ELECTRICITY GENERATION OVER THE YEARS¹

Before World War I

Electricity generation began in small sheds and basements in the late 1870s, grew rapidly, and came under legislative regulation in the 1880s and 1900s. Technological developments by such pioneers as Ferranti and Parsons enabled generators to increase in size from a few kilowatts to several megawatts. By 1914 hundreds of independent undertakings, private and public, had been established, with sales of electricity for power exceeding those for lighting and traction. The main limitation was that there were few connections between local undertakings, and many technical differences.

By 1907 there were about 20 000 people wholly or mainly employed in generation and supply, with about 5 per cent of them in trade unions, mainly Electrical Trades Union craftsmen. There was no collective bargaining.

World War I

In World War I demand increased from 1.96 TWHs to 3.57, the demands of munitions factories providing a great fillip. Power stations remained unlinked, however, and it was not until 1919 that there was legislation aimed, among other things, at correcting this. Trade unions in the industry also grew, with some elements of collective bargaining including, in 1918, a famous arbitration award – No 2772 – establishing a standard rate for electricians in London and later beyond. The Electrical Power Engineers’ Association, representing technical and scientific staff, was formed towards the end of the war.

The inter-war years

Electricity Commissioners, established by legislation in 1919, had a useful regulatory role but did not get far with co-ordinated developments through the joint electricity authorities that the law had envisaged.

There was much industrial disturbance at the time and the government extended the Conspiracy and Protection of Property Act of 1875 to cover electricity supply.² In 1920 came the Emergency Powers Act.³ In 1919 negotiating machinery was established for manual workers (the National Joint Industrial Council) and in 1920 for technical and scientific staff (the National Joint Board). The EPEA and the ETU, the two strongest unions, were at loggerheads, otherwise the EPEA would have joined the NJIC. The industry suffered for many years from this division.

The manual workers’ trade unions in the industry were involved in the 1926 General Strike (see Chapter 2) This set back relationships, but the manual workers did not do as badly in the Depression as many elsewhere.

At the time of the General Strike total sales of electricity were 5.8 TWHs, generated by 478 power stations with a total capacity of 4422 MW. Local authorities owned 264 stations and companies owned 215, the biggest of which had more than 100 MW of plant installed.

In 1926 legislation established a public body, the Central Electricity Board (CEB), with powers among other things to control power stations’ operations and to establish a ‘grid-iron’ of high voltage transmission lines. By 1935 this was complete, with 148 power stations under the CEB’s direction. In 1939 it became a nationally integrated network with a National Control Centre.

Inter-war expansion was rapid. In 1914 sales per head of population had been 77 KWHs; by 1939 they were 486. Then the installed capacity of power stations was 9712 MW, most new generators being 30 or 50 MW capacity. The pay of the manual workers fell behind that generally prevailing as the economy recovered in the later 1930s, and this remained the case until 1948 and beyond. In other ways conditions of employment were relatively good.

World War II and nationalisation

The industry suffered bomb damage and other disruptions during World War II, while construction, repair and maintenance of power stations fell behind. As the economy adjusted to peacetime conditions there was a serious shortage of power, made worse by a shortage of coal, extensive use of electric fires, and the terrible weather of the 1946–7 winter.

The whole industry in Great Britain (except the North of Scotland Hydro-Electric Board, already a public board) was nationalised from 1 April 1948 when the assets of 200 companies, 369 local authority undertakings and the CEB were brought together under the British Electricity Authority (Central Electricity Authority from 1954) and 14 area distribution boards. Within the BEA a Central Authority ran the power stations and transmission systems.

Gradually post-war difficulties were overcome and there was rapid growth. Bigger, more efficient, generating sets were installed and the building of a 275 KV supergrid was started. On 1 April 1949 there were 197 power stations and about 156 000 employees all told, about 41 000 of t...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Illustrations
• Glossary of terms
• Foreword D. G. Jefferies CBE
• Introduction
• 1 Britain’s most vulnerable industry in perspective
• Part I Trials of strength
• Part II The miners’ strike 1984–5
• Part III Resource management in the 1984–5 miners’ strike
• Part IV The future
• Appendices
• Notes
• Index