1,000 jobs to go in Northern Electric efficiency drive

Northern Electric will cut up to 1,000 jobs by the end of the decade in a continued efficiency drive which has already reduced the workforce by 1,700 since the company was privatised. At the same time Scottish Power said it would axe 350 jobs over the next 12 months at Manweb following its acquisition of the electricity firm.

The Labour party attacked the moves as the "latest utility jobs massacre". Ian McCartney, Shadow Employment Minister, said: ''These latest job losses come on top of more than 42,000 jobs already cut in electricity companies since the privatisation process began in 1990."

He added: "Cutting staff may give quick fix to the balance sheet, but it does not necessarily improve service to the consumer, who also ends up paying for former utility employees to be unemployed."

One City analyst said that the planned reductions at Northern are an "interesting pointer" for the rest of the industry. "Most of these companies are still over-manned and under managed," he said.

David Morris, Northern's chairman, said that 200 jobs would go both this year and next, with natural wastage then reducing the workforce each year by "approaching that" number. He added: ''Our task is to make ourselves as cost effective as larger players and clearly that is an uphill task."

Mr Morris said that the company has had approaches from a number of foreign suitors since the lapse of a hostile bid by Trafalgar House earlier this year but that there have been no "serious discussions". He hinted, however, that the company would be interested in merging with another regional electricity firm, but added: ''We are happy to remain independent. What we are about is giving value to our shareholders."

He was speaking as Northern announced a fall in pre-tax profits to pounds 58.7m in the first half of the year from pounds 63.4m in the same period last year. The fall was partly due to the pounds 2.9m cost in advisers' fees of issuing special dividends and preference shares as part of the company's package of shareholder sweeteners offered in defence of the Trafalgar House bid.

The results were also distorted by higher interest charges after a share repurchase and a non-recurring property disposal in 1994. The interim dividend of 12p represents an underlying increase of 7 per cent over last year. The company's shares closed unchanged at pounds 5.83.

Mr Morris said that future growth prospects will come both from improved efficiency and from unregulated businesses, including gas production and retailing, power generation and supply of electricity to commerce and industry.

Separately, National Power and PowerGen received a fillip from the industry watchdog, Professor Stephen Littlechild, who said that he would not extend the price cap in the electricity trading pool beyond March 1996.

The cap was imposed in early 1994 because of his concerns about lack of competition. But recently PowerGen agreed the pounds 500m sale of two power stations to Eastern Group, now part of Hanson. National Power is also on track for power stations disposals.

The statement by Professor Littlechild comes as the Monopolies and Mergers Commission prepares to start an investigation into the pounds 2.8bn bid by National Power for Southern Electric and PowerGen's pounds 1.9bn proposed takeover of Midlands Electricity.

Investment Column, page 20

PROMOTED VIDEO
Life and Style
food + drink
Life and Style
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
Arts and Entertainment
Ben Affleck stars as prime suspect Nick Dunne in the film adaptation of Gone Girl
filmBen Affleck and Rosamund Pike excel in David Fincher's film, says Geoffrey Macnab
Life and Style
fashion
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
News
people
Travel
Warner Bros released a mock-up of what the new Central Perk will look like
travel
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
News
i100
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments