A bit of history from the London Review of Books, Vol. 34 No. 17 · September 13, 2012:
How We Happened to Sell Off Our Electricity
Does it matter that the power Britain relies on to make the country glow and hum no longer belongs to Britain? After all, the lights still shine. The phones still charge. Does it matter that the old electricity suppliers of eastern and north-west England and the English Midlands, the coal-fired power stations of Kingsnorth, Ironbridge and Ratcliffe-on-Soar, the turbine shops at Hams Hall, the oil and gas stations on the Isle of Grain, Killingholme, Enfield and Cottam are the property of E.ON of Düsseldorf?
Is it of significance only to sentimental Little Englanders that the former electricity boards of Tyneside and Yorkshire, the power stations at Didcot in Oxfordshire, Fawley in Hampshire, Tilbury in Essex, Littlebrook in Kent, Great Yarmouth in Norfolk, Little Barford in Bedfordshire and Staythorpe in Nottinghamshire belong to RWE of Essen (the last being the only one the German company built itself)?
Is it a sign of some atavistic hostility to the Other – nationalism, chauvinism, even racism – to find it strange that the one-time public purveyors of electricity in North Wales, Merseyside and southern Scotland, along with another set of large power stations, are owned by Iberdrola of Bilbao? Are you an enemy of liberal principles if you question the fact that, when local electrical engineers dig up the roads in London, they’re working for East Asia’s richest man, the Hong Kong-based Li Ka-shing? In north-east England, they work for Warren Buffett; in Birmingham, Cardiff and Plymouth, the Pennsylvania Power and Light Company; in Edinburgh, Glasgow and Liverpool, Iberdrola; in Manchester, a consortium of the Commonwealth Bank of Australia and a J.P. Morgan investment fund.
More than anyone, you’d think, it would matter to the people who made these arrangements possible in the first place. What has happened is not what they promised or intended when they put Britain’s state-owned electricity industry on the block. Before this year is out, politicians, regulators and corporations will make a set of decisions determining the electric life of Britain for the next half century. They will decide how the country keeps the lights burning and the wheels of industry turning for the next fifty years without severely affecting the climate or impoverishing us. But as a result of actions taken a generation ago by Margaret Thatcher’s Conservatives – a party whose nationalist programme promised independence from Europe – the decisions aren’t Britain’s alone. Thatcher promised less state involvement in industry but the future of Britain’s energy supply now hinges on state-owned French companies based in Paris: Electricité de France, better known as EDF, and Areva, maker of nuclear power stations. Will EDF and Areva build a fleet of new nuclear reactors in Britain or won’t they, and if they do, how much will it cost the British and French public?
Defending her record in Parliament on the day she resigned in 1990, Thatcher spoke in patriotic tones of how, with millions of people buying shares in former state industries, privatisation was giving ‘power back to the people’, and how competition at home and open markets in Europe would free British enterprise to lead the world. Now, in 2012, it’s clear that the result of electricity privatisation was to take power away from the people. Small British shareholders have no influence over the overwhelmingly non-British owners of the firms that generate and distribute power in Britain. The fact that individual households and small businesses can choose to switch from the confusing tariff of one oligopolistic supplier to another doesn’t protect them from sharp, unpredictable swings in prices. In overseas chanceries the Thatcher doctrine came up against ambitious leaders who were no less patriotic, but not so arrogant and naive. Unlike Thatcher, they didn’t assume that if their country levelled its playing field, others would level theirs. The problem with the ideal of competition is that there are winners and losers. The electricity competition has now been held. It is over, and Britain lost. From the point of view of technology and capital, electric Britain is no longer a centre. It is another centre’s province.
The most unexpected consequence of selling the country’s electric legacy, the consequence that most directly contradicts what the Thatcherites were trying to do, was the gradual absorption of swathes of the industry by EDF. Beginning with the takeover of London Electricity in 1998, exploiting the Thatcherites’ open-door market structures and their decision to split the electricity industry into small, easy-to-swallow chunks, France in effect renationalised the industry its neighbour had so painstakingly privatised. Renationalised it, that is, for France. As well as being one of the six dominant UK suppliers of energy, EDF now owns a fat portfolio of British power stations, including the fleet of nuclear reactors that still provides around a sixth of the country’s electricity.
It was a setback for the pro-market ideologues. Unlike E.ON and RWE, EDF is a state-owned monolith with a near monopoly on the production and supply of electricity in France, run by technocrats and members of a powerful trade union, the Confédération générale du travail (CGT). Its mission is to empower France in foreign markets, and the government agency that owns it, L’Agence des participations de l’Etat, isn’t embarrassed to say so. In her foreword to the agency’s 2010 report, Christine Lagarde – then minister for economic affairs in François Fillon’s cabinet – boasted that the state would be more active than ever in building ‘champions capable of competing with global market rivals’. In Thatcherite terms EDF was a public sector mammoth that would inevitably be hunted to extinction by the hungry and agile competitors of post-privatisation countries like Britain. The laws of economics said so. And yet the opposite happened. The mammoth thrived, and Britain failed to produce new competitors, agile or otherwise.
If the power of EDF in Britain is an embarrassment to neoliberals, does that mean it’s good for their opponents, the pastel-shade socialists of the legacy left? Unison, the British union that represents electricity workers, seems happy. Greg Thomson, Unison’s head of strategic organisation, told me that since it crossed the Channel EDF had gone against prevailing management orthodoxy by reinstating a final salary pension scheme for workers. Unison was given seats with the CGT in an EDF/union body, a ‘European Works Council’, and enough leverage over EDF management to get union recognition for previously non-union workers at a call centre in Sunderland. ‘When London Electricity was privatised, we adopted a policy of returning it to public ownership, and I’m pleased to think I delivered on that,’ Thomson said. ‘Obviously to the wrong nation, but you can’t be too picky.’
Yet EDF’s foreign adventures make Unison’s French counterparts suspicious. They don’t understand why Britain gave away its native electricity industry so easily....
....MUCH MORE
It's a 12,000 word essay so you may want to settle in to read it but for those interested, it is also the most accessible discussion of how things came to be that I have found
