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UTILITY WEEK | 10TH - 16TH JULY 2015 | 9 Interview I n autumn 1990, as Allied troops were preparing for Operation Desert Storm in the Middle East, a battle of a very different kind was going on back home. Three years previously, Margaret Thatcher had been re-elected on the back of a manifesto that included a pledge to pri- vatise the electricity industry and, aer months of pains- taking work, the flotation was about to happen. "There was a big debate as to whether or not we would actually float, because of all the uncertainty around Kuwait," recalls John Roberts, then financial director of Manweb. "The decision was, we've got this far, we've invested this much time and effort, we're going to go ahead. So we went ahead on 11 December, and the rest is history." For Roberts, that moment 25 years ago was one of the high points of a stellar career in utilities that has since included running Manweb and United Utilities as chief executive, and now chairing First Utility and Electricity North West. He has also had stints in other sectors such as financial services, where he chaired the Royal Bank of Canada. For the electricity industry, that moment was the dawn of the modern age, when the blueprint for today's fractured and fractious electricity industry was drawn in indelible ink. With the reputation of the sector now at an all-time low, the rights and wrongs of the privatisation a quarter of a century ago remain contentious – but Rob- erts tells Utility Week he is in no doubt: "If you gave me the choice, I would unquestioningly rather have the way it is now to the way it was." To understand why, we must travel back to the febrile atmosphere of the late 1980s. The market was king, and following the privatisation of the gas, water and tele- coms industries, electricity was next in line. There could be no denying the problems of state-run industries: "You couldn't plan more than one year ahead. We used to get our annual visit from the Treasury and they would tell us what we had to do about prices. The industry was run on a shoestring by civil servants. You never saw the same civil servant twice – they weren't technologists or engi- neers, they didn't really understand the industry. That, plus the monopoly mindset, gave you a very inefficient, arrogant, inwardly focused business that was neverthe- less supplying a very fundamental need." The industry was expecting privatisation – but along the model of British Gas or British Telecom, where the whole entity was floated as one business. Instead, Mar- garet Thatcher had a momentous meeting with her then secretary of state for energy, Cecil Parkinson: "He per- suaded her they should break up the industry – they produced a white paper to that effect in 1988. I was astounded to think we were going to be an independent business – we had just expected to be part of this mas- sive thing. And so it started; we were creating an indus- try from scratch." Roberts was invited to be the financial director rep- resentative on the small working group designing regu- lation, so was at the centre of the hive of activity that followed, as bankers and lawyers pored over the detail of the 12 simultaneous flotations of the Regional Electricity Companies (Recs). At that time, these managed the elec- tricity business from distribution through to retail (no- one had ever thought of separating the two) as well as appliances, with a shop on every local high street. It was hard work, and came at a personal cost. "When privatisation started, my daughter was four and my son was six and when it finished, she was six and he was eight and they hardly knew me. It was one of those life choices you make." Yet Roberts describes the privatisation, which took two years, as one of the best experiences of his profes- sional life. Working with high-powered merchant bank- ers (Oliver Letwin among them) was a new experience for those who had grown up in the public sector: "It was like being sent in to train with the Olympic squad and if you couldn't keep up, that was it – you were dropped. It was a very exciting experience and we had to think about things we hadn't thought about before." There were plenty of surprises in store: the weekend Roberts spent drawing up key parts of regulation at his daughter's tiny desk; the obsessive detail required for the flotation ("it got surreal. We wrote that there was a seaside coastal town in north Wales on a dual carriage- way, the A55, and someone said 'prove the A55 is a dual carriageway'"). More fundamentally, the changes to the nature of the industry were a surprise. "All we could think of was stock markets, and that our salaries would go up," says Rob- erts, whose relatively modest £40,000 stipend as finance director doubled overnight. "We never foresaw the takeo- vers, the amalgamations, the foreigners coming in." One challenge for the markets at the time was differ- entiating between the 12 Recs – the Regional Electricity Companies that arose from the regional area boards. electricity25 This interview is featured in Utility Week's book marking the 25th anniversary of electricity privatisation, electricity25, containing financial analysis features and interviews charting the privatisation of the 12 public electricity supply companies and the Central Electricity Generating Board. Order a copy at: utilityweek.co.uk/ Home/electricity25