Thank You, Mr. Scargill

Back in “The Good Old Days”, the UK was essentially ruled not by the Government, but by a band of extreme left-wing trade unions. By January 1974, the coal mining strike led by one Arthur Scargill (who used hairspray to keep his comb-over in place) of the National Union of Mineworkers had meant that, as coal supplies dwindled, the UK Government had to impose a three day week on businesses, whereby they could only work for three days a week, unless they could work without electricity. The Conservative Government of the day decided to go to the country in March 1974, where they lost the Election. The new Labour Government granted Scargill virtually his every wish, including a 35% increase in wages for miners. The price of coal went up 22% as a result. It was another 10 years before Scargill tried his luck again against Mrs. Thatcher, who had seen off the Labour Party in 1979, and Scargill was seething with anger over that situation. By now, the British public realized that Scargill was dangerous as he had his own political agenda – he made Hoffa seem like a nice guy. Many of his own union members turned their backs on him. The Coal Board (funded by the taxpayer) management was able to introduce ‘reforms’ which meant that unprofitable coal mines were closed. From about 170 mines in 1984, there are today a mere 20 or so.

I digress, and I’m sure that, Dear Reader, you are on the edge of your seat as to why the title of this tome. During the period of the Three Day Week, I was employed in the IT Department of a major UK bank. It had about 3,400 branches. A group of about six of us was charged with finding a solution to the bank’s need to service customers’ accounts. It was obvious that getting power to our computer center was going to be a problem. We looked at buying vast numbers of oil tankers/trucks which could power back-up generators, but this proved impractical – we were in the middle of the City of London, and the computers occupied three floors of the 30 storey building – 24th to 26th. We did in fact buy a tanker, but it sank into some mud at the place we kept it. Insufficient planning I guess.

We decided to examine the bank’s profits. It turned out that 85% of the bank’s profits came from a mere 15 branches. It was decided that we would service the computer/accounting needs of those branches, and let the rest fend for themselves during the ‘dark’ days. This system worked well for the duration of the Three Day Week. We would power the computers only for a few hours each day, which meant we had enough to keep those branches going.

Now, as an extension of this exercise, our group was charged to find out why the remaining 3,385 branches or so were not contributing as much to the profits – I felt that this was outside our bailiwick as IT guys, but I was over-ruled. This erstwhile group was sent into the wilds of Oxfordshire, and we spent our days in an 18th century country house which belonged to the bank. This country house had about 30 bedrooms, but we were the sole occupants. Each evening, after a sumptuous dinner where they even served a choice for the cheese course – about 10 - we would sneak out to the local village pub to play darts with the locals. Sadly, we always lost.

I digress again. Many branches were contributing to the bank’s profits, but on a much smaller scale. After much scratching of heads and research, we were able to determine that the actual cost of processing a single cheque (check) was about £1 ($2). And this back in 1974 when the average cheque was about £5. Cheques were the norm in those days. All bills were paid by cheque, whether it be grocery bill, or utility bill.

The motley crew of six were set a target – how can modern IT help this situation. We had meetings with other banks, and we eventually agreed on the standard for the magnetic stripe on the back of bank cards – still used to this day. The rest is history as they say.

The Internet has meant that I haven’t issued a check since May last year. And that was only for the Internal Revenue Service (IRS) here in the US. They can’t take online payments. I suspect that if they could, they could cut their staff numbers dramatically, but I fear that would be politically incorrect to do so.

I understand from people I know at one of the US’ largest bank that the cost of an electronic card transaction is under 2 cents (1 penny) these days, but there is no available cost for a check transaction. I still cringe when I see someone at the checkout desk of the local supermarket get a check/cheque out. They delay the line, but must cost the banks a fortune in processing fees. But I suspect they enjoy the two day grace period they get before the check is presented to the customer’s bank.

Thank you Mr. Scargill. Without you, I suspect none of this would have happened for several more years.

Here endeth today’s lesson.