THE GOVERNMENT has agreed a £410 million bailout for Britain's biggest electricity generator, which threatened to let its nuclear power plants go bankrupt last week. British Energy provides 25 percent of electricity in Britain. It said on Thursday of last week it faced bankruptcy. Only three weeks previously it had insisted there was 'no financial crisis'.
The company was formed when the Tory government sold off the electricity industry in 1990. Its collapse ought to sound the death knell for privatisation. But a government insider told the Financial Times, 'The company has been aggressive with ministers. But there's not a feeling of 'We're going to get our own back'.'
The government is to leave electricity in private hands. It is handing over £410 million without question, even though British Energy paid out £50 million to shareholders just a few months ago. This latest collapse comes after the bankruptcy of Railtrack and the deepening crisis at National Air Traffic Services, which was privatised by New Labour. British Energy sank into crisis because privatisation has led to 'overcapacity' in the generation of electricity.
Its nuclear power stations are far more expensive than producing electricity from coal, leaving aside how dangerous they are. The nuclear power stations only exist because they produce the raw material for nuclear weapons. They were also part of the Tory government's drive to reduce coal use so it could massacre the miners.
British Energy lost money as the price of electricity fell. Under the madness of privatisation that has meant more public money going in to bail the company out. The nationalised electricity industry aimed at always having a reserve margin of supply of 24 percent, so it could cope with sudden surges of demand. That is the same amount of 'overcapacity' today.
But now it means bankruptcies, job losses, attacks on pensions and huge subsidies from the government for greedy directors and shareholders.
THE BOSSES at Railtrack have just received the first half of £6.7 million bonus payments. One of the biggest winners is Richard Middleton, engineering director, who was responsible for the disastrous West Coast Mainline upgrade.
He will pick up a £100,000 'loyalty bonus' even though he left the company last Friday after failing to get a job in Railtrack's successor, Network Rail.