The privatization of British Energy: Risk transfer and the state

Abstract

Following the development of the New Right Agenda, Conservative Governments in Britain introduced incrementally an extensive privatization programme. This paper focuses on the failure of the last privatization of the Conservatives: British Energy, the company established to run the eight most modern nuclear power stations. A key argument used to justify the privatization of British Energy, the transfer of risk from the state to the private sector, is analyzed using the conceptual framework of the risk society thesis. The privatization led to the apparent transfer to the company of interrelated risks, particularly the nuclear liabilities risk. New Labor’s rescue of British Energy confirmed the reality, which was that residual responsibility for risk, especially the nuclear liabilities risk, remained with government. Despite the company’s collapse the Labor Government sought a market-based outcome, and in 2008 British Energy was sold to EDF, the French state-owned energy company. The paper concludes with a discussion of the implications of the failure of risk transfer for public policy, drawing on insights provided by the risk society thesis.