# 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