Private profits that fuel public loathing

What is about some of the great British companies that makes them so hated by the great British public? We regard faceless corporations as little more than playground bullies; we resent their huge profits and their slick PR. But is our anger justified? Peter Popham investigates
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The Independent Online
They are the firms we love to hate. There is nothing very rational or fair about it: companies that deal in death or addiction, that turn impoverished countries on to powdered milk or cigarettes, or manufacture land mines do not come into the picture. In fact, the firms we loathe are all in the business of increasing the sum of human happiness. Camelot manufactures millionaires. British Gas keeps us warm and cooks our food. The water companies fill our baths. BA and BT and Railtrack bring us together. Yet, at one time or another, we roundly hate them all.

We hate their profits, their bonuses, their relentless "downsizing", their mission statements, their chief executives' bonuses, their screw- ups, their slick and ubiquitous publicity. We hate their ineluctability, of which the high-profile advertising is a part.

In another age, before the word Thatcherism was invented, a very similar stigma was borne by the public utilities. The reasons, too, were comparable: incompetence, smugness, bureaucratic impregnability. Just as, in the case of many of our hated companies, they have inherited the businesses of the old nationalised concerns, they have inherited also the public animus towards them. But it has changed, too, as the companies themselves have changed, and the whole relationships now bear the stamp of the Nineties on them.

Precisely to the extent that they are vast, dehumanised, faceless corporations, we choose to relate to them as if they were particularly nasty people. The case of Camelot is exemplary. In most countries it would be taken unemotionally for what it is: a company that has proved good at exercising its technologically complicated function, and which is turning a reasonable profit as a result. If emotion were involved in the matter, it would perhaps be admiration at the computerised slickness of it all.

Here in Britain, however, that aspect of it is taken for granted. And this is where a seam of unreconstructed Luddism cuts in. Of course they can do all that mechanical stuff well enough: for they are motivated by greed, which can move mountains. But what informs the British view of Camelot is: a) the involvement of high-powered Americans in it, and b) the fact that Richard Branson was willing to take on the same job and do it for nothing.

The fact that, as Branson alleges, the American partner G-Tech tried to bribe him to drop out of the running only heightens the impression of venality. Then last week came the clinching stroke, the act that proved the moral infamy of the outfit. Camelot declared, with the regulator Peter Davis beaming and nodding from the sidelines, that it would not necessarily always honour henceforth the promise to pay out pounds 10 to all who got three correct numbers.

Now they were revealed in their true colours. "Those greedy, faceless, fattest of cats," raged Tony Parsons in the Daily Mirror. "... With these changes to the rules, Camelot have proved themselves greedy beyond belief. Run a lottery? They are not fit to run a whorehouse."

In Parsons's view, which puts well what a lot of people instinctively feel, the "facelessness" of companies like Camelot is just a trick, a device, a blank mask. Then they do something dirty, and the mask slips - and there they are, exposed in all their moral turpitude.

This was the tragicomic fate that also befell British Airways when it was exposed for playing dirty tricks on Virgin Airways in an attempt to shut it out of the transatlantic business. A major corporation playing a little rough, a little dirty? How naive can people be if they suppose that this is not the sort of thing that big business engages in all the time? But again the compulsion to reduce corporate politics to the level and morality of the school playground cut in, and BA was suddenly the cheat, the big bully. The fact that the adversary was Branson was again significant: for he is the only businessman with an image homely enough to have rendered himself lovable by the British people as a whole.

But if the execration that descended on Camelot and BA (and which BA, arguably, has now just about transcended) was due to an infantile public view of corporate politics, the detestation suffered by other companies rests on firmer foundations.

Most of the companies that people really hate have a number of key factors in common. They are heirs to a nationalised monopoly; though privatised, they are still actual or quasi monopolies. The service they provide may or may not have improved, but it is overshadowed by prominent news items about executives' salaries and bonuses, and expensive advertising that tries to make the companies lovable.

This is the trap into which British Telecom has fallen. Anybody old enough to remember trying to use a public telephone in the Seventies should not need to be told how much better the service has become. Practically every week sees new facilities added, which are adopted gleefully by huge numbers of customers. Yet BT still labours under a monstrous image problem. "People love to hate BT," says Chris Martin, spokesman for the Advisory Committees on Telecommunications, "but they're not really justified in doing so. It's a hangover from when it was a public monopoly - anything nationalised was to be ridiculed, and BT's still living with that, despite the huge amount of money it's put into marketing itself."

It is even arguable that the huge amount of advertising - the most prominent of any British company, according to a Mintel survey - is counterproductive: every time Bob Hoskins's smirkingly moralising face reminds us that "it's good to talk", we're reminded of the thousands of former BT employees whose most pressing subject of conversation is still unemployment.

But if the public is unfair to BT and BA, in several other cases the loathing is fully justified. Like BT, British Gas inherited a nationalised monopoly, but the latter provides a textbook of how to antagonise practically everyone. Trying to transform itself into a high-flying privatised venture, it set off down the well-travelled road of firing staff and cutting costs so as to be able to cut prices - but last year, before prices could be cut, inefficiencies due to these cuts and resulting demoralisation impacted on the service the company provided, and its image went into a nose dive. Complaints doubled during the year, and the firm's popularity rating, according to a Mintel survey of leading British companies, slumped from 37 per cent to 14 per cent. "British Gas took a ride on a roller coaster of dismay," says Ian Powe, director of the Gas Consumers' Council.

What did it for British Gas more than any other incident was failing to come to the aid of customers during a cold snap in January. This was due to incompetence, bad luck and overstrained resources: but once again the compulsive moralising of the British attitude to corporate activities took over. British Gas's mask of slick modernity slipped, and the playground meanie was revealed in all its petty nastiness. It's a hard image to live down.

Camelot: Cringe factor: 7

Public face: chief executive Tim Holley.

What he earns:

pounds 240,000 a year, basic.

We pay them: Average punter spends pounds 2.10 a week on lottery tickets, pounds 1.59 on scratchcards.

Public image: real gamblers know the National Lottery odds are appalling; and this was before last week's news that Camelot would not commit itself to paying the pounds 10 minimum for three correct numbers if there were too many wins on a particular day. The lottery effectively taxes the masses to pay for bourgeois pleasures. Bishops say it threatens to unravel the very fabric of our society.

Marketing image: "It could be you". Play, stand to win a fortune, help a good cause.

Biggest cock-ups: gave clues to the identity of December 1994's pounds 17.8m jackpot winner, ignoring his pleas for anonymity.

What the spin doctor says: Camelot's Louise White says resistance to the lottery is mainly a preoccupation of the chattering classes.

Railtrack: Cringe factor: 9

Public face: chairman Robert Horton

What he earns: pounds 154,000 (including bonuses).

What we pay: pounds 1.8bn in government subsidy.

Public image: all the public's hatred of BR, and a bit extra, has passed on to Railtrack. It is the symbol of the widely disliked rail privatisation scheme and no one quite understands what it does. It appears faceless, secretive and ready to palm off responsibility on to other parts of the rail industry. It refuses to apologise for any incident in case this reduces its - so far notional - share value.

Marketing image: Railtrack's patrician chairman, Bob Horton, is kept away from the media by his colleagues because of fears that he may reach the end of his short fuse on live TV or radio. He is angling for a knighthood and lots of lolly when Railtrack is privatised in the spring. Watch out for forthcoming shares campaign showing lots of trains running through pretty embankents and Freudian tunnels.

Biggest cock-ups: took over the publication of the rail timetable last year for the first time - it was so riddled with errors that it had to be completely reprinted, the first time this has ever happened. Managed to lose the propaganda war with Jimmy Knapp over the signal workers' in 1994, which was quite an achievement given that the union leader needs subtitles when he appears on TV. Also suffered a series of leaks questioning safety in the summer, which it failed to rebut properly and is likely to get blamed for any incident or accident, just because everyone hates Railtrack.

What the spin doctor says: Philip Dewhurst, public affairs director of Railtrack, points out that the company has inherited the majority of its difficulties from a national rail system that suffered from under- investment and neglect.

British Gas: Cringe factor: 7

Public face: since the departure of Cedric Brown, chairman Richard Giordano.

What he earns: pounds 450,000 a year.

What we pay: the average household gas bill is pounds 350 a year.

Public image: British Gas's image problems are due in large part to the former chief executive Cedric Brown's fat salary and positively obese pay-off. "That's the booty of gas," commented the Sun.

Marketing image: "Don't you just love being in control?" gushed their TV ads, as though we were meant to derive some sort of inner satisfaction from our gas consumption.

Biggest cock-ups: late last year announced it was trapped in long-term contracts that forced it to buy supplies at twice market rate - costing 18 million householders pounds 166 each. Last December gas chiefs admitted having caused at least pounds 80,000 of damage to the Eel Pie Island bridge in the Thames during repairs. And the company announced it would no longer fund the Christmas party for former employees in London.

In its favour: Ian Powe, director of the Gas Consumers' Council, says dull, old-hat monopoly ways of thinking are being purged from the company.

Lloyds Bank: Cringe factor: 5

Public faces: none you'd recognise.

What they earn: as a guide, Sir Brian Pitman, chief executive of Lloyds, earned pounds 653,000 last year.

Public image: high street banks have always suffered from an affection bypass, not least because their job is to make more from your money than you do. Service charges infuriate, as does the closure of branches, which all of the big four have been forced to carry out. High street banks' staff were 350,000 in 1989 and down to 290,000 at the beginning of 1995, with more cuts on the way.

Marketing image: banks feel we labour under a misapprehension that their managers are genteel Captain Mainwaring figures when their job is to sell mortgages, unit trusts and life assurance, not just manage our current accounts.

Biggest cock-ups: lending to property buyers long after the boom was over; an over-eagerness to lend when times are good and a parallel tight- fistedness when times are hard.

In their favour: aware that they get a relentlessly bad press, the banks have paid close attention to staff training.

British Airways: Cringe factor: 4 Public face: Chief executive, Robert Ayling

What he earns: last year, pounds 508,000; this year - soon to be revealed in annual report.

Public image:

The mud of the "dirty tricks" campaign against Virgin Atlantic (see "Biggest cock-up", below) has stuck, but has staged a strong recovery since. The Consumers' Association reported last year that the airline had "improved significantly overall". But BA's own research last year found that while passengers praise price, seat size and meals, they found it lacking in service and style.

Marketing image:

"The world's favourite airline", it claims modestly.

Biggest cock-up: It must have struck someone as a good idea in 1992 to empty Virgin's transatlantic jumbos by phoning their tiny rival's customers and telling them their flights had been cancelled - but BA has being paying for this and other "dirty tricks" ever since.

What the spin doctors say: the past is the past. It remains among the most profitable airline companies in the world.

Yorkshire Water: Cringe factor: 9

Public face: the managing director, Trevor Newton

What he earns: a basic salary of pounds 157,000 (though he is soon to depart).

What we pay: the average water bill in the Yorkshire area is pounds 208 a year.

Public image: so unpopular among its 2.5 million users that staff were told last year not to wear their uniforms in public.

Marketing image: seems unsalvageable.

Biggest cock-ups: handled last summer's drought so badly that the chairman, Sir Gordon Jones, was called to account by the Environment Secretary, John Gummer. Newton didn't help matters by claiming last September that he had done his bit by not having a bath in three months. The company was criticised by the National Rivers Authority last year for its high rate of leakage from pipes.

What the spin doctors say: Margaret Stewart was appointed director of corporate affairs after Newton's admission of his personal hygiene regime. She says: "You have to separate what the public feels from what the press tells them they feel." She could not see why the company's advert for a media relations officer became a national news item.

BT: Cringe factor: 5

Public face: chairman Sir Iain Vallance

What he earns: pounds 465,000 a year.

What we pay: the average household phone bill is pounds 213 a year, including line rental.

Public image: notorious for its astonishing profits of over pounds 100 a second, though not as hated as it once was. Service has improved immeasurably in the past 10 years; the most visible measure of this is that phone boxes work. Enjoys relatively favoured status with Labour, which distinguishes it from other privatised companies because it is seen to operate in a competitive environment.

Marketing image: a matter of taste, of course, but the "It's good to talk" ads starring Bob Hoskins, promoting the telephone as an enhancer of human relationships and general mediator of warmth and kindness, stick in the craw when weighed against BT's profits and what most callers perceive as a continuing monopoly.

Biggest cock-ups: refused to waive the reconnection charge for victims of the recent London Docklands bomb.

Sheep farmer Abraham Davies and his wife took BT up on a special offer of phone installation at their remote Welsh home for just pounds 99, only to be told that the cost of laying the necessary 2 miles of cable through bleak countryside would be pounds 22,000. However, the couple insisted the original contract be honoured, and BT backed down.

What the spin doctors say: David Orr, press officer, says: "The trouble with BT is that our assets are huge, as are our turnover and profits. It can look excessive to the man in the street." But he adds that the money is invested and handed out in dividends to the company's 2 million shareholders.