In the absence of an Energy Department, the innovative and competitive British energy markets developed almost without direct government involvement. The basic principles had been laid down in the 1980s: separation of transmission from trading and equal access to transmission networks, overseen by independent regulators. Much of the work of governance was done by the gas and electricity industries themselves, with the regulators holding the ring. The result — emphatically in gas, less so in electricity — was pragmatic, cost-effective and competitive.

Competition brought gas prices down to unprecedented levels, the benefits of which were passed on not only to gas consumers, but also to electricity users. That is because private investors invariably chose to invest in combined cycle gas turbines (CCGTs) rather than coal or alternatives. The plant was cheaper and quicker to build, and the fuel was abundant. The construction of more than 20 CCGTs over a dozen years was the only significant addition to the UK's stock of power generation.

But the gas industry was much simpler to liberalise than the power sector. Lenin famously said: "Communism is Soviet power plus the electrification of the whole country." Not even Mrs Thatcher and her ministers were prepared to allow the fortunes of British power supply to be left wholly to the vagaries of commerce. Unlike the plans for gas, the electricity privatisation structures—as is only to be expected when ministers and civil servants involve themselves in market design—were flawed from the beginning.

Perhaps the most revealing aspect of the initial attempt to sell off the electricity supply industry in 1988 is that Cecil Parkinson, then the Energy Secretary, thought he could include the nuclear stations. A couple of weeks after seeing his prospectus, the message came back from the City: nuclear power, no thanks. They had swiftly seen through the long-held official claim that nuclear power was competitive with fossil fuel. They had also understood that with ownership would come open-ended liabilities for decommissioning, spent fuel, etc.