Finance of the Nationalized Electricity Industry

Abstract

THE electricity industry passed into public ownership on April Ist, I948. The present structure of the industry was set up by the Electricity Act of I957 which established, in place of the former Central Electricity Authority, the Central Electricity Generating Board charged with the duty of developing and maintaining an efficient, co-ordinated and economical system of supply of electricity in bulk for all parts of England and Wales, and the Electricity Council upon which was imposed the duty of advising the Minister on questions affecting the electricity supply industry and matters relating thereto, and of providing and assisting in the maintenance and development by electricity boards in England and Wales of an efficient coordinated and economical system of supply by electricity.1 The changes brought about by the Act of I957 are significant in that they represent a substantial movement away from the centralized control of the industry that had been exercised by the former Central Electricity Authority and the granting of a high degree of freedom and autonomy to the generating and area boards. As a consequence, as had been learned in the gas industry, it had become necessary to form some body to which the Minister might refer when discussing the industry's requirements at national level. This body was the Electricity Council. Moreover, Section 3 of the Act of I 957 indicates that, if the electricity boards in England and Wales, or any group of them, so desire, the Electricity Council may perform services for, or act on behalf of these boards, on matters of interest common to them. In fact the Electricity Council functions in much the same way as the Gas Council for the gas industry. Like the Gas Council the Electricity Council belongs to that group of corporations which are 'financially independent [of the State] unless recourse has to be had to the Treasury guarantee of the principal (either stock or temporary loans) and the payment of interest thereon'.2 The industry, subject to the temporary arrangements made under the Finance Act I956 and extended for further