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A Bulletin for UNISON members in Scottish Power Retail Division - June 2001

Closure and Sell Off

Scottish Power Retail has finally come clean on its plans for the retail business. 99 of the 156 stores to be sold to Powerhouse, the rest of the business to be closed down. 1200 of the 2700 staff to lose their jobs. The company was forced to go public only after the media got hold of the story which was common knowledge around the retail business for the previous week.

It gives UNISON no satisfaction to say that we warned of this outcome at members meetings in February. When the initial closure programme was announced we said that the company would sell off the business if it could find a buyer and close what it couldn't sell. All the signs were there:

  • The company's new focus on energy clearly had no place for a retail business.
  • The closure or sell off of other non-core businesses.
  • The disengagement of the energy supply business from retail as the company chased 'high value' customers.
  • Anticipated and then actual trading losses
  • A management reorganisation which placed the retail business out on a limb.

Not that you would have realised this from the words of retail management. Whilst the secret negotiations for the closure and sell off were underway the Retail MD was telling staff in USP News under the heading "Working to Win", that in the past 12 months "we have had some considerable successes" and "we have already proved we can grow our business". He concluded his article by saying "Finally, may I thank you all again for your continued commitment in driving our business forward". After several years of failed initiatives and dismal management this last 'communiqué' really takes the biscuit. It is however, indicative of a management approach which long ago gave up being honest with its staff or most importantly listening to them.

There are two other wider implications of the decision:

  1. Yet again the staff and their trade unions were the last to be told of the closure and sell off. This reinforces the importance of the UK Government signing up to the EU Workers Consultation Directive which would force companies like ScottishPower to be more open with its staff and not hide behind commercial confidentiality. UK workers have a right to be consulted before a decision is taken not simply consulted over its implementation.
  2. Government competition policy and the actions of energy regulator OFGEM has brought new entrants to the energy supply market. Inevitably these new entrants 'cherry-pick' the most profitable customers. Established suppliers like ScottishPower can only respond by chasing the same "high value" customers. Low income and disadvantaged customers who made most use of the network of high street stores are therefore abandoned to the vagaries of the market.

The Next Steps

UNISON is meeting the company to attempt to salvage what we can from this mess and protect the interests of members. As negotiations with Powerhouse are not yet concluded it is not clear exactly what parts of the business are going where although Scotland is the worst hit area. Only a handful of shops are being retained and the HQ and support functions are being devastated. We also understand that further consideration is being given to parts of the business which are not going to Powerhouse and clarity is needed on these points. Immediate concerns are:

  • Clarify what is being sold and what is being closed.
  • What transfer arrangements are being established for those parts of the business which are being sold off.
  • Seek the maximum redeployment opportunities within ScottishPower.
  • Retraining and other assistance to staff leaving or transferring within the company.
  • We will yet again raise the issue of the discriminatory severance payments. ScottishPower currently makes lower severance payments to its predominately female retail staff compared to staff in the rest of the company.

UNISON is meeting the company urgently to address these issues and we will keep members advised of progress.

Dave Watson

Scottish Organiser (Utilities)


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