Ministers shouldn’t be ‘saving jobs’– they should be helping workers find new ones

Instead, I went on, “the Scottish Government should bend every effort to improving productivity. Yet often, in trying to slow change because of its bad memories of the 1980s, it does the reverse.”

Just a few days later, I can offer not merely a hypothetical argument but also a concrete case to make the same point. Meanwhile, the utility company, Centrica, has announced it is closing its plant at Alexandra Parade in Glasgow with the loss of 400 jobs. It used to be the old Wills cigarette factory which, to travellers arriving on that side of the city, proclaimed the favourite local method of suicide. Recently it has been a call centre where the customers can phone in and report faulty gas boilers, so in some cases saving their own lives. At the same time, the friendly voice at the other end of the line would try to sell them insurance with guaranteed repairs or similar benefits and a range of ancillary products.

The closure is a blow to the East End, which already has more than its fair share of social and economic problems. Local MSP Ivan Mckee, pictured below, at once stepped in, volunteering to broker talks between management and unions in an attempt to cushion the impact, but it is doubtful if this well-meant initiative will get anywhere.

The reason is that Centrica – a major UK corporation and a component of the FTSE 100 index – has been in steep decline. Profits plunged from £300 million in 2012 to £11 million in 2017, before recovering somewhat then falling again. The company had grown up out of the privatisation of the gas industry in 1986. British Gas, which inherited a range of older enterprises, demerged them in 1996, with Centrica becoming the monopoly supplier of gas to domestic consumers.

The market was soon opened to competitors, however, and Centrica steadily lost ground, even though it sought to diversify. It had a rough time from its regulator as well and recently, the senior management was replaced. Price caps further hindered an upturn. Customers’ successful protests against soaring tariffs will now, in effect, cost the workers at Alexandra Parade their jobs. But whatever its difficulties, I pay tribute to the company for being frank and open about them.

They are set out, warts and all, on Centrica’s website, where past and present employees are allowed to comment on their work experience. Most have been positive, though some hinted that not everything was hunky-dory: “Management are incompetent – year on year they never learn from the same mistakes within the business.” A different dissident declared: “You can earn good money but the work is boring, career prospects slim and the work life balance is questionable. The hardest part is mentally dealing with the tedious nature of the job.” A third rebel wrote: “This company hire and fire like no one I know! … Watch out for these muppets!! Going to show that they have little or no regard for the welfare of staff that have no employment rights.”

From such comments I get the impression that Centrica, though it has older origins, took on some of the typical features of the twenty-first century’s gig economy. The insecurity of the workforce turned into a goad to individuals to perform, and suppress all instincts they might have to kick against the pricks. Little generosity has been shown to them and if they cannot measure up to the company’s requirements for profitable operation, then they just get the sack. But still things have not gone right.

All of which makes me wonder why the SNP in Glasgow should be so hot under the collar about this, when the party normally regards the gig economy as an evil capitalist plot. Of course, it is the democratic duty of politicians to defend their constituents’ interests. But there are times when constituents’ interests merit a defence a little wiser than a simple knee-jerk reaction. I think Centrica at Alexandra Parade is one of those cases.

In terms of productivity, the company has self-evidently been performing below par, meaning it has not been getting the most it could in outputs from its labour and capital. Otherwise there would be no problem. This is, therefore, an underperforming part of Centrica’s business, and a company in trouble needs to cut out activities in which it is weaker in order to concentrate on activities in which it is stronger. This is a typical path to recovery.

It will also be better in the end for the workers affected. In a company with a productivity problem, they will in real terms never earn more than they are earning now. If they have gained useful experience they should take it elsewhere, into a different company with superior management, better prospects and higher profits.

Please don’t tell me Glasgow no longer contains such outfits. On my laptop I have just received a post from Microsoft, “our fourth annual ranking of the most sought after companies today … across four main pillars: interest in the company, engagement with the company’s employees, job demand and employee retention.” A bit different from Centrica, in other words. Out of 25 such companies in the UK, four are in Glasgow (contrasted with, for example, two in Aberdeen and none in Edinburgh).

Glasgow is no longer a city where it’s hard to find a job. The unemployment rate at the turn of this year was 4.4 percent, a little higher than in the other two cities, yet low on any historical comparison.

Glasgow's George Square (Image: Newsquest)

Scotland’s old economic powerhouse is almost back to full employment, something not seen since the mid-20th century.

Of course, today’s activity is broadly commercial rather than clustered in heavy manufacturing.

Those made redundant at Centrica have at least acquired sales skills, which can set them up for a life somewhere else in this more diverse economy. The Scottish Government should be helping them to move on, rather than holding them back inside a firm going down the tubes – something perversely known as “saving jobs”.

As a matter of fact, it’s the opposite. Employment in Glasgow depends on how efficiently its capital and labour are applied to its production: higher productivity means more jobs, lower productivity means fewer jobs. So every chance should be taken to match and rematch the workforce to the opportunities available.

In the case of Centrica, a chance is in danger of being spurned. If that represents the Scottish government’s policy, it will find no way out from the austerity which it constantly tells us is the worst of all possible economic misfortunes.