Grid pulled from the privatisation wreckage

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Screaming and shouting, the 12 regional electricity companies have finally been forced into line on flotation of the National Grid. Barring another hiccup, the shares should begin trading on 11 December. If anyone can take the credit for this, it is Tim Eggar, the Energy Minister. Without him, it almost certainly wouldn't have happened at all.

By the end, at least half the Recs were opposed, some more vehemently than others. It was not always thus. Originally, there was virtual unanimity of support. That, however, was at a time when the Recs anticipated some benefit to themselves in terms of a substantial cash windfall. It soon evaporated.

Indeed, some of the newcomers to the industry, Hanson and Southern Electric of the US, thought the rewards of flotation to themselves so poor that they withdrew support and became obstructive. They used the complex negotiations over detail as a way of promoting their own objections in principle. To Hanson and the Americans, the idea that the Government should decide what they should do with an important asset was anathema. It was only the threat of a windfall profits tax that beat them into submission.

For its part, the Government secures on behalf of the consumer a pounds 50 per bill rebate, thus mitigating some of the criticism it has encountered for failing to realise the value of the National Grid when the Recs were privatised. This is hardly going to save a government as unpopular as this one, but at least Mr Eggar has salvaged something from the electoral wreckage of privatisation policy.

An accounting standard for the Eighties