A bid for Centrica by the Russian energy conglomerate, Gazprom, has come several steps closer. First came confirmation from Gazprom that it still had Centrica, which owns British Gas, in its sights. It was also reported that, after weeks of behind-the-scenes discussion, the Prime Minister had decided against barring Gazprom. Mr Blair, it was stated, believed that Britain had to keep to its commitment to liberalise European markets, energy included.
The news had two immediate effects. It caused the price of Centrica shares to rise by several points. It also alarmed those who regard Russian ownership of a major British energy supplier as a risk too far. And it is true: the arguments against Gazprom taking over Centrica are many and easily rehearsed.
Gazprom is a Russian state monopoly. As such, it comes close - that is putting it at its mildest - to being an arm of the Russian government. What guarantee would there be that a Gazprom-owned Centrica would not further the state interests of Russia rather than the interests of its British customers? And how reliable a supplier is Gazprom anyway? Its readiness to hold Ukraine to ransom in a dispute over pricing suggests that Russia is not above using economic advantage for political purposes. This does not inspire confidence.
There are also questions about the stability of the business climate in Russia and the neutrality of the courts in the event of a dispute. On top of everything is the moral dimension. President Putin's record on human rights and democracy leaves much to be desired: is Russia the sort of country Britain should be doing big business with, especially business that could make one in two British customers dependent on Russian gas?
These are all serious considerations. In the end, though, Mr Blair is right. If the liberalisation of European markets is to mean anything, there can be no exception for Gazprom just because it is Russian. Until now, Britain has set an example to the rest of Europe for the openness of its economy and British consumers have benefited.
Nor, except for the brief - and highly politicised - incident with Ukraine, has Gazprom interrupted supplies. Where prices have been fully commercial, Gazprom has been thoroughly reliable. As our own reserves of oil and gas are depleted, we will become more dependent on others for our energy. Were Gazprom to control Centrica, any politics in the supplier-customer relationship would be replaced by economics. It would be against Gazprom's interests to discriminate against British customers. If Gazprom has the money and will play by the rules, no protectionist obstacles should be raised to resist a takeover of Centrica.Reuse content