Transco to cut 2,500 jobs after losing MMC battle

BG, the former British Gas, is to cut around 2,500 jobs at its main pipeline business, Transco, following its defeat at the hands of the Monopolies and Mergers Commission over price controls.

Unions representing Transco's 16,000 staff were told at a meeting on Monday of the plans, which will see about 1,000 workers leave the company by the end of this year and a further 1,500 go next year.

Transco said it hoped all the job cuts would be achieved through voluntary redundancy, though it had not decided the terms of any payouts.

The company also said it could not confirm speculation that Transco was to close its head office at Solihull, which employs more than 500 people. The business has 32 offices across the UK and there has been internal speculation that many administrative jobs at the headquarters could be moved to other locations.

Unions and management last night clashed over whether customer safety would be compromised by the job losses. The GMB union said safety could be jeopardised, while Sue Slipman, director of the Gas Consumers Council, called on Transco to provide a "cast-iron guarantee" that customers would not be compromised.

A Transco spokesman insisted the top priority was to protect customers and to ensure that "key skills" at the business would be retained.

Peter Marshall, from Unison, the public service union, blamed the job cuts on Clare Spottiswoode, the industry regulator. Ms Spottiswoode's original proposals to slash Transco's revenues were largely accepted by the MMC. "She seems to want to cut and slash until nothing exists any more," he said.

Large-scale job cuts were expected after the MMC in June ruled that Transco's pipeline charges should drop by 21 per cent this year, equivalent to a saving of pounds 29 on the average domestic bill. The latest job losses are not expected to involve further provisions at BG, which announced further restructuring charges of more than pounds 400m shortly before the demerger of its gas supply business earlier this year to form Centrica.

Transco's workforce fell by more than 4,000 during 1996 as staff took advantage of a generous redundancy scheme.