Historian: Britain accepts state ownership in energy — as long as it's a foreign state
A new book on the history of Britain's energy system argues that publicly owned utilities once built infrastructure faster and cheaper than today's private sector, and proposes a new mutualised ownership model.
Historian Arthur Downing, who works by day as director of strategy at energy supplier Octopus Energy, examines in his new book "Power and the People: A History of British Energy" why British homes still overwhelmingly rely on gas boilers and how the country ended up with a fragmented, import-dependent energy system.
Downing explains that gas appliances were installed in homes at no direct cost during a state-run project in the 20th century, and that the nationalised gas industry was, from the 1940s to the 1980s, one of Britain's most dynamic and efficient sectors. Since privatisation began in the early 1980s, he argues, the result has been a "dysfunctional hybrid" — nominally private but reliant on state subsidies, combining the drawbacks of both models.
Four historical phases
The book traces four phases over 200 years: municipal ownership dominated from the 1880s to the 1920s; government became a major infrastructure owner between 1920 and 1945; the sector was almost entirely nationalised from 1945 to 1979; and it was almost entirely privatised between 1979 and 2010. Downing notes that as early as 1926, Conservative prime minister Stanley Baldwin set up a state-owned corporation that built Britain's first national electricity grid, on time and on budget.
As an example of Britain's inconsistent attitude toward foreign state ownership, Downing cites the February purchase of UK Power Networks by Engie, a utility majority-owned by the French government — a deal that caused no disruption to French bond markets or its government.
A proposed alternative
Rather than returning to a 1940s-style model, Downing proposes a "mutualised" system in which public corporations own the networks, councils and communities hold stakes in local infrastructure, and households are properly compensated for the flexibility provided by solar panels, batteries and electric vehicles. Markets would remain in retail and EV charging, while natural monopolies such as networks would stay in public ownership. Downing argues public ownership and markets are not opposites, pointing to the Nordic countries and China as examples.
