Labour attacks 75% workforce cut at National Power

MARY FAGAN

Industrial Correspondent

The Labour Party slammed National Power yesterday for cutting jobs by almost three-quarters over the past three years while the pay of the company's chairman has tripled.

The attack was sparked when National Power, the nation's largest electricity generator, announced that it was to cut 400 jobs, bringing its workforce to around 4,500 compared with almost 16,000 at privatisation five years ago. The Labour Party said it was "disgusting" and claimed that the 11,000 job losses at the company have cost the taxpayer pounds 49m in lost tax and benefits.

Ian McCartney, shadow employment minister, said: ''National Power may have cuts its workforce by two-thirds since privatisation, but the 'cost savings' have stopped at the boardroom door." He said boardroom pay had "rocketed" over the period with the remuneration of John Baker, until recently chief executive, increasing from pounds 106,000 in 1991 to pounds 398,000 last year. Mr Baker is now paid pounds 180,000 in his capacity as chairman.

National Power said the reductions, which will be made among management and clerical staff at the company's headquarters in Swindon, would help to save pounds 40m in 1996/7 and pounds 60m the following year. But Mr McCartney said: "No one opposes increasing efficiency, but in the privatised utilities of Tory Britain that always seems to mean job cuts for the workforce and pay rises for the executives."

The job cuts caused uproar from the staff unions, with Celia Pilay, national officer for the Engineer and Managers' Association, saying that the unions would challenge the move through the consultation process. "It is difficult to think of a worse start to 1996. These latest cuts threaten to turn a lean company into an anorexic one," she said.

Her anger was echoed by Unison, which said it would seek urgent talks to try to reduce the planned cuts. Mick Brade, Unison's senior regional officer in the soutern region, said: "The consequences will be stress and loss of morale. It demonstrates that the threat of job insecurity is in the workplace and not in people's minds as some Tory ministers believe."

National Power said its improved efficiency had come from a range of measures, not only reductions in staff. A spokesman added that benefits have been passed on, with typical industrial customers seeing electricity prices fall by around 23 per cent since the industry was privatised.

Andrew Swanson, company secretary, said a review of non-power station costs, which resulted in the latest 400 losses, had been carried out "against a background of increasing competition in electricity generation".

Mr Swanson added: "National Power believes that the cost savings and increased efficiency will enable the company to continue to compete vigorously in its home market whilst developing the business abroad."