Americans plug into our electricity industry

It's a funny old world. Energy Group, formerly known as Hanson, formerly known as Eastern Electricity, formerly known as part of the CEGB seems to have changed hands more times over the last seven years than a ten dollar bill. Regulators and agreement on price allowing, it's now about to change hands again and with it goes most of Britain's remaining hope of building up its own international force in electricity supply. John Devaney is one of the more impressive chief executives operating in this now highly fragmented industry and while no doubt an important role will be found for him in PacifiCorp, he will in future be working for an American company.

Ian Lang's decision last year to prevent the two generators, PowerGen and National Power, from buying regional electricity companies (RECs) left the door wide open to US utility groups. The pounds 1.5bn bid for Yorkshire Electricity, the last before the election, has left just Southern Electric as the only independently quoted REC. If Pacific Corp does buy Energy Group it will put an astonishing 8 RECs in American hands. For the record the other 7 are; Yorkshire, London, East Midlands, Northern, Midlands, Seeboard, and Sweb. Of the remainder, two have been bought by water companies - Swalec, and Norweb - and a third by Scottish Power.

The previous government surely did not foresee this extraordinary turn of events when it privatised the industry seven years ago. That was, however, the logic of its free for all mergers policy. The big question for the markets now is whether Labour is going to adopt the same stance. Certainly what it said in Opposition would lead you to the view that PacifiCorp can expect a reference to the Monopolies and Mergers Commission.

Since then Margaret Beckett has said that competition concerns will continue to be the deciding factor in mergers policy and on that basis it is hard to see any good reason for stopping the Americans. The MMC would not have an easy time finding one. Nonetheless, it is sad to reflect on the fact that our only remaining standard bearers as mainland Europe begins the process of deregulating energy supply, look destined to be the two generators, National Power and PowerGen.

No disrespect meant to them, but what chance do they stand against the giant European monoliths and the increasingly aggressive Americans?

Bell tolls for ITV ... but not just yet

With everyone's sights firmly focused on the brave new world of digital TV, interactive TV and pay per view, it's a wonder that anyone can still summon up any interest at all in the boring old business of analogue TV franchises. For a very sizeable proportion of the population, however, analogue will remain the only method of TV delivery for quite some years to come. While the ITV franchises may not be quite the licence to print money they once were, they've got a good 10 years of revenue earning ability left in them yet. The latest round of consolidation might further extend their life expectancy by allowing a more co-ordinated approach to competing with the BBC, satellite, cable and digital terrestrial.

Not that the three emergent winners in this market place - Michael Green, Lord Hollick and Gerry Robinson - make easy bed fellows. What co-operation they do manage to achieve is largely of the reluctant and forced variety. Even so, three powerful egos is an easier number to sit round a table than 10 and a more co-ordinated approach to scheduling begins to look that much more possible.

Lord Hollick's acquisition of HTV would represent the final piece of the jigsaw under present media ownership rules to fall into place. Whether he's prepared to pay the price is another thing, but he must draw some comfort from the game Granada has played over Yorkshire Tyne Tees. Yorkshire once claimed it was worth pounds 17 a share. Last March Granada said it was not prepared to bid at the then price of pounds 12.80. Now it looks set to clinch the company at just pounds 11.75.

With Mirror Group declared offside by the current cross-media ownership rules, Scottish is free to plough its own independent furrow north of the border. Its takeover of Grampian establishes a not inconsiderable Scottish based media group. But if the next 10 years look set fair for this privileged little bunch of monopolists, the 10 years after that do not. By then the digital age will be well established and these franchises will be very much a wasting asset.

National Grid verdict will not end the story

Mr Justice Robert Walker has finally delivered his verdict on whether the electricity industry - specifically National Power and the National Grid - misused nearly pounds 1bn of its pensions surplus, and rather surprisingly he has come down in favour of the companies. It is hard to see the matter resting there, however. For one thing, the pensioners have already had a favourable ruling from the Pensions Ombudsman, and although he's now being told he's wrong in law, the pensioners will continue to hold the moral high ground, believing that right is on their side. And for another, this is not a particularly good judgment. The judge rehearses the arguments well enough, but he fails adequately to explain why he's opted for one side over the other.

The argument hinged on whether the terms of the pension schemes allowed the companies to use the accumulated surplus for their own purposes, or most of it anyway. Most occupational pension schemes do, and while this invariably gives rise to controversy, there has always been a reasonable underlying case for it. After all, in most occupational schemes it is the employer which makes the bigger contribution to the fund, so by rights he should therefore be entitled to at least a share of any surplus.

However, with these schemes the wording seems specifically to require that the surplus is used for the benefit of employees. Moreover, both National Power and the National Grid implicitly acknowledged that there were limits on the way they could use the surplus by tying it directly to the funding of redundancies, thus enabling them to claim that the money was a "benefit" to employees.

Aggrieved pensioners will certainly want to appeal and it seems right that they should be given that chance. Admittedly the surplus was used to fund very generous redundancy terms which might not otherwise have been available, thereby reducing the pain of the downsizing process, but it is hard to see how redundancy costs are anything other than an employers' liability.

Whether pensioners do take the case to the Court of Appeal rather depends on the trustees, who have so far been funding their legal costs. Both at the National Grid and National Power there is an unsurprising reluctance to see the case proceed any further. But woe betide them if they get caught putting pressure on the trustees to end the campaigners' funding. That would make a mockery of all those post Maxwell changes in the law to give pension funds more independence from their corporate masters.