Eabian 


The Fabian Municipal Program, No. 3, 

THE MUNICIPALISATION OF 
THE GAS SUPPLY. 


(SECOND EDITION. REVISED DEC. 1893.) 

LIGHTING by gas has become a necessity of the life of a great city.
Nevertheless some persons who advocate the public supply of water 
hesitate to apply the principle of municipalisation to their local gas· 
works. Few of such persons, however, can be aware of the rapiditywith which the public supply of gas is increasing. Already one-half 
of the gas consumers in the kingdom burn gas which they themselves 
as citizens have made through their local governing bodies; 
excluding London and its neighborhood, tile proportion is, indeed, 
over two-thirds. 'l'he number of local authorities undertaking the 
gas supply has grown from 148 to 182 in nine years. No public 
authority in the United Kingdom having once municipalised its gasworks 
has ever retraced its steps or reversed its action. 

But J_,ondon, along with Liverpool and Dublin, Sheftleld and 
Bristol, and a few other large towns, still leaves this essentially 
public service in the hands of private capitalists.

These speculators llave succeeded in arllling themselves with large 
and far-reaching statutory powers, to the arbitrary and oppressiveexercise of which the consumer is constantly liable. Against a powerful 
company the individual has practically no defence. No privatecorporation ought to be entrusted with such authority. It can only be 
safely vested in a representative public body, directly responsible to, 
and therefore capable of being effectively controlled by, public opinion. 

London's gas supply has now fallen, by successive amalgamations, 
into the hands of three colossal companies (in 1855 there were 20), 
whose capital outlay, including past competitive vvaste and lawyers'hills, exceeds £15,000,000. On this amount they manage to obtain 
a handsome profit, the annual surplus being, on an average. over 

A MILLION STERLING, 

or more than seven per cent. In London our gas proprietors are 
limited by Act of Parliament as to their dividends, according to a 
sliding scale, and any excess is now partially devoted to a rerluction 
in the price of gas. Nevertheless the largest company regularly pays 

its shareholders 12 per cent. 


2 

Particulars for the years ended 31st December, 1890, 1891 and 1892. 
(See the Annual Returns to the House of Commons, Price 3d.) 

Receipts. Expenditure. Surplus. 
1890. £ £ £ 
Gas Light and Coke Co. 
South Metropolitan Co. 
Commercial Co. 
3,429,625 
1,000,662 
341,892 
2,727,380 
842,883 
258,577 
702,245 
157,779 
83,315 
Total 4,772,179 3,828,840 943,339 
1891. 
Gas Light and Coke Co. 
South Metropolitan Co. 
Commercial Co. 
3,673,112 
1,075,400 
351,498 --2,899,084 
860,885 
295,913 ---774,028 
214,515 
55,585 ---Total 
5,100,010 4,055,882 1,044,128 
1892. 
Gas Light and Coke Co. 
South !IIetropoli tan Co. 
Commercial Co. 
3,711,095 
1,135,001 
347,429 
2,674,033 
821,376 
280,701 
1,037,062 
313,625 
66,728 -----
---
Total 
5,193,525 3,776,110 1,417,415 

Notwithstanding a net profit of nearly three-quarters of a million 
sterling, the Gas Light and Coke Company raised its price in 1890 
by 10 per cent., and in December, 1891, by a further 12 per cent. 
(from 2 6 to 3 1 per 1,000 feet), in order to pay a 12 per cent. 
dividend to its ordinary shareholders. This involved an aoditional 
charge upon two-thirds of London amounting to over half 1t million 
a year. 

But the gas companies have no legal monopoly; anrl the local 
authority (in London the County Council) can obtain Parliamentarypowers to construct a competing supply, unless the companies consent 
to transfer their works on equitable terms. 'rhe London works 
could undoubtedly now be constructed for much less than the total 
capital outlay of £15,178,365; but, assuming the whole of this amount 
to be reimbursed to the shareholders, the interest payable by the 
Council would only be some £456,000 a year, as compared with three 
times that amount now paid annually to the share and bondholders. 
The average profit for the three years, 1890-2, was £1,134,960, and 
the difference between this and the interest which would have been 
payable in interest had the London County Council owned the works 
amounts to £678,000. This sum would cover nearly one-half of the 
net expenditure of the London School Board. Even if the shareholders 
were given £25,000,000, which is about the present 1narket 
value of their shares, the County Council could probably effect a 
saving of half a million sterling. 

In Manchester, where the City owns the gasworks, the Corporation, 
besides clearing off the capital cost by a sinking fund, has 
applied about a million of money, the profit of its gas undertaking, 
in aid of the permanent improvement of the town. In 1891-2, a net 


3 

profit of £74,278 was made on gas supplied at 216 per one thousand 
feet. Birmingham, with gas at 2'3 per 1,000 feet, made £22,144 
profit in the same way after paying interest on gas loans. Whyshould not London do the same, and ensure, at the same time, the 
fair treatment of London's ten thousand gas stokers? 

Here is the experience of Bradford. "The Gasworks of this 
Borough," wrote the town clerk in 1890, "belong to the Corporation,
and the profits last year amounted to £18,000, equal to about 4d. in 
the £ on the rateable value of Bradford, the price of the gas being 
2s. 3d. per thousand feet, with discounts varying from 2~ to 12! percent. ; in addition to which the public lamps are lighted free of 
charge." The cost of street lighting in London, which is paid for by 
the ratepayers, is equal to a rate of twopence in the £ ; so that, in 
Bradford, municipal gas saves the pockets of the ratepayers the 
equivalent of a sixpenny rate. 

The pecuniary profit to be made by completing the municipalisation 
of the gas supply is, however, of less importance than 
obtaining complete control over this essentially public service. The 
thousands of gas-workers ought to be secured fair wages, proper 
hours of work, and adequate protection against accidents. At 
present but little is done to bring the comforts of gas, either for 
lighting or cooking, within the reach of the poor, and even in 
London only every other house has gas laid on. Little attention 
will be paid to lighting the poorer streets, the public stairways, 
or the slums and alleys of our great cities, so long as every cubic 
foot of gas is jealously charged for by a capitalist company. Our 
gas, moreover, is practically our winter sun, and no private considerations 
ought to be allowed to stand between us and our main 
source of artificial light. Whatever progress may be made with 
electric lighting, the use of gas for heating and cooking purposes will 
remain, and, indeed, experts tell us the consumption of gas must 
inevitably increase. We need not fear that our municipal gasworks 
will become obsolete for many generations to come. 

Hence INSIST ON THE MUNICIPALISATION OF THE 

GAS SUPPLY. 

G. STANDRING, Printer, 7 & 9 Finsbury-street, E.C. 

the Secretary, at the Fabian Office, 276 Strand, London, W.O. 

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