Gas in London: a Divided City

Abstract

In late nineteenth-century London there were a number of amalgamations between gas companies but, despite conventional business logic, those to the north and those south of the River Thames never came together, while Paris, Berlin and Vienna were served by a single dominant company. This paper follows the course of the successful and failed amalgamations and describes the policies of the main protagonists. Responsibility for public lighting was very fragmented and therefore municipalization in the public interest, common elsewhere, was never practicable in London. The incipient threat of electrical competition, statutory regulation and inter-firm rivalry kept the protagonists on their toes. London companies were in the forefront of building new working-class markets for gas to compensate for the gradual loss of their traditional lighting market. No evidence is found for economies of scale foregone. Indeed the London companies performed better than their European counterparts in terms of sales of gas per customer. Personal rivalries between successive chairmen prevented the establishment of a single London gas company. It is proposed that this anomalous division in gas supply produced creative rather than destructive tension, and was not detrimental to the interests of Londoners.