Scottish Gas Board

The Scottish Gas Board was a state-owned utility providing gas for light and heat to industries and homes in Scotland. The Board was established on 1 May 1949, and dissolved in 1973 when it became a region of the British Gas Corporation.

Problems arising from nationalising part of the British gas industry

The first chairman of the board was Sir Andrew Clow who established the headquarters at 25 Drumsheugh Gardens and 12 Rothesay Terrace Edinburgh. He served until 30 April 1956. In the last of his quarterly letters to his senior management, he reflected on the experience of centralising the control of over two hundred independent undertakings. The remainder of the article is abstracted from that letter and includes explanatory remarks.

Functions of gas undertakings

Each undertaking performed the functions of coal gas production and distribution through underground pipes to domestic, commercial and industrial customers, sales promotion, finance, etc. Some works were too small to remain viable and one at Wigton was closed. Studies were conducted to establish whether previously rival works could be integrated, both managerially and physically by linking their distribution systems.

Ownership of Scottish gas undertakings

Most of the larger gas undertakings had been owned by local authorities and employed many expert and talented engineers. However the same authorities were also owners of electricity generating and supply companies (the main rivals of the gas industry); the local authorities had felt no need to promote competition.

Post-war issues

Immediately after World War II there was a chronic shortage of pipes (for mains replacement and extension to new customers), and other materials. Most gas pipes were made of cast iron and often leaked at the joints. Actual 'unaccounted for gas' (loss through leakage and other losses) was estimated as being as much as 25%. Refurbishment and replacement of pipes was a priority, for safety reasons. Little preventive work was carried out; distribution engineering was usually initiated by the detection of a leak.

Many gas works had not been adequately maintained, the price of coal and of coke oven gas was rising, contractors were in short supply and the Scottish rating system at that time was such that 'profits might prove as damaging as losses'.

Cost-based pricing

Regarding gas tariffs, the chairman wrote "we must keep the allocation of charges between customers fairly close to our estimate of their individual costs and we do not have the freedom of private companies to discriminate between customers whose conditions are similar." This was a reference to the notion that pricing of state-owned produce should reflect cost as accurately as possible (a cost-plus pricing model). This was in very sharp contrast to the free-market concept of charging 'what the market will bear' i.e. the highest price that still enables sufficient competitive advantage to retain that customer, thus capturing all the consumer surplus.

Losing market share

Gas was losing share of the industrial market in Scotland because of falling oil prices. One of the largest refinery sites in the country was located almost at the centre of the industrial belt.

Domestic customers were becoming ever more sensitive to the price of gas as electric heating, in various forms, became relatively cheaper.

New house building after the war was on an unprecedented scale on mainly green-field sites beyond the reach of gas mains. Government rules about return on investment often made mains extension impossible, again to the detriment of suppliers of gas versus electricity.

Personnel problems

While the chairman was confident about the technical expertise of the staff he had inherited, he recognised that, unlike the previous owners, it was necessary to promote gas sales by 'educational advertisement and display, canvassing and salesmanship' and by making 'more contact with domestic customers, local authorities and various personalities'. The industry had, hitherto, been managed mainly by professional engineers, whose aim was to produce and distribute gas as cheaply as possible, bearing in mind that, in the interest of safety, demand had to be met at all times.

Managerial priorities

A failure to supply for any reason had dire consequences. Not only might it entail prosecution for breach of statutory responsibilities, but restoration of supply required, and still requires, every home to be visited to ensure that all gas taps are turned off (including the main supply to the premises). The procedure then requires pipes to be purged to ensure that any explosive mixture of gas and air is removed before the main is pressurised again. Finally, every household had to be visited again to ensure safe restoration of supply.

Consequently, the engineer manager was more concerned about ensuring continuity of supply and with balancing supply with demand on an hourly basis. The notion that in addition to performing his delicate task, he would have to 'sell' gas by making personal contact with potential customers was unusual.

The chairman admitted that "the great amount of work that re-organisation has involved has also had some effect, especially in the bigger places, in leaving Managers too little time to move around and to have frequent and close contact with others at work, whether they are stokers or typists, or mainlayers or meter readers in whatever capacity they serve". Customer contact not mentioned.

Industrial relations

The chairman remarked on the good relations the Board had with the trade unions and, although he welcomed increasing wages, he deplored the fact that wage negotiations were conducted at national level (by the Gas Council) and that wage awards were "above what the cost of living and our (Scottish) position justified." He regretted that he had to mark his departure with a concomitant rise in gas prices.

Last thoughts

The chairman concluded his account by remarking that "... a first class plant, first class gas and coke, a first class office and showroom, a first class financial system are all admirable. But these and many more gadgets in the machine will be of little value unless those using them add to their professional competence a sense of vocation and an anxiety to brighten up what Wordsworth calls 'the still, sad music of humanity.'"

Undertakings in Scotland vested at nationalisation

The Board took over the following local authority and privately owned gas production and supply utilities:

Aberdeen Corporation (County of the City of Aberdeen)
Aberlady and Gullane Gas Company
Airdrie Burgh Corporation
Alloa Burgh Corporation
Alyth Gas Light Company
Arbroath Burgh Corporation
Ardrossan Burgh Corporation
Auchinleck Gas Light Company
Auchterarder Gas Light Company
Auchtermuchty Gas Company
Ayr Gas Company
Ayton Gas Company
Banchory Gas Light Company
Banff and Macduff District Gas Company
Barrhead Gas Company
Beith Gas Light Company
Blairgowrie Gas Light Company
Bo'ness Gas Light Company
Bridge of Weir Gas Company
Broxburn Gas Company
Buckhaven and Leven Gas Commissioners
Burntisland Burgh Corporation
Busby and District Gas Company
Callander Gas Company
Campbeltown Burgh Corporation
Cardenden Gas Company
Carnoustie Burgh Corporation
Castle-Douglas Gas Company
Catrine Gas Company
Coatbridge Burgh Gas Company
Coldstream Gas Company
Coltness Iron Company
Coupar Angus Gas Company
Cove and Kilcreggan Burgh Corporation
Cowdenbeath Gas Company
Crieff Gas-Light Company
Cullen District Gas Company
Cumnock Gas Company
Cupar Gas Company
Dalbeattie Gas Light Company
Dalkeith Gas Light Company
Dalry Gas Light Company
Darvel Burgh Corporation
Denny and Dunipace Burgh Corporation
Dingwall Burgh Corporation
Dollar Gas Company
Doune Burgh Corporation
Dumbarton Burgh Corporation
Dumfries Burgh Corporation
Dunbar Burgh Corporation
Dunblane Gas Company
Dundee Corporation (County of the City of Dundee)
Dunfermline Burgh Corporation
Dunlop Gas Light Company
Dunning Gas Company
Dunoon Burgh Corporation
Duns Gas Company
Earlston Gas Company
East Linton Gas Light Company
Edinburgh Corporation (County of the City of Edinburgh)
Elgin Burgh Corporation
Eyemouth Gas Company
F. B. Keillor (trading as Comrie Gas Light Company)
Falkirk Burgh Corporation
Falkland Gas Undertaker
Fauldhouse Gas Company
Forfar Burgh Corporation
Forres Gas Light Company
Fraserburgh Burgh Corporation
Galashiels Gas Company
Galston Gas Company
Glasgow Corporation (County of the City of Glasgow)
Gourock Burgh Corporation
Grangemouth Burgh Corporation
Greenock Burgh Corporation
Haddington Gas Company
Hamilton Burgh Corporation
Hawick Gas Company Ltd.
Helensburgh Burgh Corporation
Innerleithen Gas Light Company
Inverbervie Burgh Corporation
Inverness Burgh Corporation
Inverurie Gas Company
Jedburgh Gas Company
Johnstone Burgh Corporation
Keith Gas Company
Kelty Gas Company
Kettle and District Gas Company
Kilmarnock Burgh Corporation
Kilsyth Burgh Corporation
Kilwinning Gas Company
Kinghorn Gas-Light Company
Kinross and Milnathorf Gas Light Company
Kirkcaldy Burgh Corporation
Kirkconnel Gas Company
Kirkcudbright Burgh Corporation
Kirkintilloch Burgh Corporation
Kirkwall Burgh Corporation
Lanark Burgh Corporation
Lanarkshire County Council
Largs Burgh Corporation
Lasswade and Bonnyrigg Gas Light Company
Laurencekirk Lighting Society Limited
Leslie Gas Company
Loanhead Gas Company
Lochgelly Gas Company
Lochwinnoch Gas Light Company
Lockerbie Burgh Corporation
Melrose Gas Company
Millport Burgh Corporation
Moffat Gas Light Company
Monifieth Burgh Corporation
Montrose Gas Company
Motherwell and Wishaw Burgh Corporation
Muirkirk Gas-Light Company
Musselburgh Gas Company
Newburgh Gas Company
Newmilns and Greenholm Burgh Corporation
Newport Burgh Corporation
Newton-on-Ayr Gas Company
North Berwick Burgh Corporation
Oban & District Gas Company
Oldmeldrum Burgh Corporation
Paisley Burgh Corporation
Peebles Burgh Corporation
Penicuik and District Gas Company
Perth Burgh Corporation
Peterhead Burgh Corporation
Pitlochry New Gas Light Company
Polmont District Gas Company
Port Glasgow Burgh Corporation
Renfrew Burgh Corporation
Rothesay Burgh Corporation
Sanquhar Burgh Corporation
Selkirk Gas Company
St Andrews Gas Company
Stirling Gas Light Company
Stornoway Gas Light Company
Stranraer Gas Company
Stromness Burgh Corporation
Tain Burgh Corporation
Tayport Burgh Corporation
The Aberfeldy Gas Light Company
The Annan Gas Company
The Armadale Gas Company
The Bathgate Gas Company
The Biggar Gas Company
The Brechin Gas Company
The Buckie Gas Light Company
The Carluke Gas Company
The Girvan Gas Company
The Gorebridge Gas Light Company
The Huntly Gas Company
The Inverkeithing Gas Light Company
The Irvine & District Gas Company
The Kelso Gas Company
The Kennoway and Largo Gas Company
The Kilmacolm Gas Company
The Kirriemuir Gas Company
The Langholm Gas and Electricity Supply Company
The Lerwick Gas Company
The Lesmahagow Gas Light Company
The Linlithgow Gas Company
The Markinch Gas Light Company
The Maybole Gas Light Company
The Nairn Gas Light Company
The Neilston Gas Light Company
The New Cumnock Gas Company
The Newton-Stewart Gas Company
The Prestonpans and District Gas Company
The Saltcoats Gas Company
The Skelmorlie and Wemyss Bay Gas and Electric Supply Company
The Stane and Dykehead Gas Company
The Stevenston Gas Company
The Stewarton Gas Company
The Stonehaven Gas Company
The Strathaven Gas Company
The Strathmiglo Gas Company
The Thurso and North of Scotland Gas Corporation
The trustees of the late R. G. E. Wemyss
The Turriff Gas Company
Tranent Gas Company
Troon Burgh Corporation
Vale of Leven Gas Company
W. & J. Knox Limited
W. Watson (trading as Lauder Gas Company)
West Calder Gas Company
West Kilbride Gas Light Company
Wick Gas Company
Wigtown Burgh Corporation

External links

The Gas (Allocation of Undertakings to Area Boards and Gas Council) Order, 1949 (1949 No. 742)
Letter from Sir Andrew Clow to senior managers on his retirement 28 April 1956.