TAYSIDE Buses, the last remaining employee-owned bus company in Scotland, is to be sold to one of the big bus groups, writes Douglas Harrison. My memory took me back to a November 1988 meeting between the STUC and Lord James Douglas Hamilton in old St Andrews House. The Government had decided to privatise the Scottish Bus Group, which provided most bus services in Scotland outside the four main cities. The STUC opposed privatisation, but, recognising the reality it would happen, sought a meeting with Lord James to maximise protection for the industry, its workers, and its passengers.

We put to Lord James the case that the Scottish Office should give an inside track to bids including employee ownership. To our surprise, Lord James appeared sympathetic.

To our even greater surprise, Lord James delivered. Of the 10 local companies into which the SBG had been divided, five (Lowland, Eastern, Kelvin Central, Western, and Clydesdale) went to management/employee buyouts, and a sixth (Midland), was bought by GRT, a management/employee-owned company. GRT had been sold to management and employees by Grampian Regional Council, and the same followed at Tayside, and Strathclyde. In the face of Government threats to force the four local government-owned bus companies into privatisation, Grampian, Tayside, and Strathclyde regions decided to jump, on their own terms, before being pushed.

The outcome of this process was that, by spring 1993, nine Scottish bus operations were owned by companies with a degree of employee shareholding. In 1993 there were more than 8500 buses in service in Scotland. About 3300 belonged to the nine companies with employee shareholdings. But when Tayside is sold (probably at the end of this year) this 39% employee ownership will have declined to zero. So what has happened to employee shareholding in the Scottish bus industry?

There are two elements to the answer: the political culture of Scotland's trades unions; and huge financial windfalls for shareholders as the British bus industry has become dominated by a handful of giants.

The trades union movement in Britain has never been interested in employee ownership as a political objective. EU statistics in 1989 showed that in Spain, over 200,000 people were in 13,100 worker co-operatives, and in Italy nearly 400,000 were in 20,800 co-ops.

I am sure the strong syndicalist tradition in Spanish and Italian trades unions has had a great deal to do with this. In Britain, by contrast, unions have tended to turn to employee ownership only as a last resort. The Scottish Daily News, printed for a few months in 1975 in the building now occupied by The Herald, was a sorry example.

The Scottish employee-owned bus companies also fall into this category. When they were being privatised the union leaderships, and most of their members, would have preferred the companies remained in public ownership. Employee ownership came a poor second choice. Employee ownership works best when the owners tackle the business with enthusiasm and commitment. While such a commitment existed in some companies, including Kelvin Central, it was a minority interest in Strathclyde Buses and elsewhere.

So, as the large bus groups like Stagecoach started to sniff around the employee buyouts, the fact that the value of most bus-workers' shareholdings had increased significantly was decisive. In Strathclyde Buses, worker shareholders who had hung on to the #300 worth of shares they bought in 1993, saw it become over #30,000 when FirstBus bought SB Holdings earlier this year. For most busworkers, #30,000 is a fortune. Whilst the sale of other companies did not bring such huge windfalls, it is hardly surprising the employee-owned sector of the industry has disappeared.

Nobody should have been surprised by the turbulent decade from which the industry is emerging. Those who remembered the thirties knew what was coming. Then, a highly-competitive market turned into an industry dominated by three or four giants. In the past decade, history has repeated itself.

Despite becoming a battle-scarred political realist over the past decade, I will still shed a tear when the Tayside workers sell out to one of the giants. Employee ownership remains to my mind the most just and equitable way to organise things. It is unfortunate, if inevitable, that it has not worked in the Scottish bus industry.

n Douglas Harrison is an economic development consultant with experience in transport, and employee ownership. He was Assistant Secretary of the STUC 1976-1990. He is also a non-executive director of SB Holdings, (Strathclyde Buses), originally nominated by the employee shareholders to represent their interests.