We are told that public ownership is inherently inefficient.
Yet, when Britain needed a modern electricity network to survive the 20th century, it was a Conservative government in 1926 that realized private enterprise was too fragmented, parochial, and inefficient to build it.
The National Grid wasn't born out of dogma; it was born out of absolute practical necessity.
Here’s a brief history of the National
Grid up to the time of the disastrous election of Margaret Thatcher. Yes, there
is no doubt that the election of Margaret Thatcher was and still is a disaster
for Britain. The worst of it is the current Lino - Labour in name only
government are carrying on the essentials of Thatcherism!
Brief history of the National Grid
The pre 1926 chaos
(and have we returned to this)?
It was an engineering supply nightmare.
Electricity generation was entirely split between roughly 600 incompatible,
localized private companies and municipal bodies.
The
Problem
There was
no standard voltage or frequency. If you moved a few streets over, your
machinery or appliances wouldn’t plug into the wall. Because stations couldn't
share power, every single local station had to keep a massive surplus of spare
generating machinery sitting idle just to handle local peak times.
The Diagnosis
The
government’s Williamson Report (1918) and the Weir Report (1925) both reached
the same conclusion: Britain was falling way behind industrial competitors like
Germany and the US because its power supply had a ‘parochial stamp’ on it. It
was fragmented with too many localised generating suppliers.
The
Failure of Voluntary regulation
The government tried to pass an Act in 1919 asking companies to voluntarily cooperate and merge. It failed completely. Private companies refused to surrender their local monopolies or invest in standardising their equipment and output.
The 1926 Act and the Taming of the Market
In 1926, Stanley Baldwin’s Conservative government realised that the state had to intervene.
They passed the landmark Electricity
(Supply) Act 1926, which created the Central Electricity Board (CEB).
The CEB was a public corporation, and it
did something extraordinary:
·
It
forced the standardization of the entire British system to 50Hz (cycles per
second).
·
It
selected the most efficient power stations to generate electricity, closing
down the wasteful ones.
·
It
didn't buy the power stations yet, but it acted as a state-mandated monopoly
wholesaler buying all the electricity from generators and sending it over a
brand-new, publicly owned network of high-voltage wires.
The Economic Payoff
By the time the initial grid was fully
operational in 1938, the results were an unassailable proof of the efficiency
of a unified public system:
·
The
amount of expensive spare plant machinery required nationwide plummeted from 80%
down to just 15%.
·
The
capital saved by not needing all that duplicate machinery paid for three-quarters
of the entire cost of building the Grid itself.
·
Production
costs fell by 24%.
1947 Nationalisation – The Golden Era of
Coordination
While the 1926 Act created the grid
architecture, the ownership of the actual power stations was still split.
Clement Attlee’s post-war Labour government finished the job with the Electricity
Act 1947.
They swept up all the remaining private
and municipal assets, forming the British Electricity Authority, which
later evolved into the iconic Central Electricity Generating Board (CEB /
CEGB).
This unified, state-owned system could
handle massive fluctuating demands:
·
The
Supergrid: In the 1950s,
the state built the Supergrid (275\kV and later $400kV.
·
Instead
of digging up and hauling millions of tons of coal by train from the North down
to southern cities, the state built massive power stations directly on the
northern coalfields and transmitted the energy cleanly down the wires.
·
The
Price Drop: By planning
the system as a single machine rather than a collection of competing
profit-centres, the standard price of electricity in 1989 (just before the
sell-off) was, in real terms, among the lowest and most stable in the system's
history.
May 1979. Then came Thatcher and Thatcherism
It took Thatcher ten years to get round to
smashing the electricity generating system. Although Gas seemed to be her first
privatisation, her first victim was the steel industry. Followed by massive
unemployment. So much unemployment that people were encouraged to go sick to
massage the unemployment figures. It is worth noting that we still have
Thatcherism to this day despite the damage that has been done – and is still
being done to you and me.
In 1989 the destruction of the stable
national grid started!
Even worse was to happen, and is still
happening to you now, when George Osborne came along!
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