Public ownership can stop people bearing the brunt of the energy crisis while corporations line their pockets – We Own It

“There is no need for the energy crisis to force people into poverty and destitution. If we brought our energy networks – transmission and distribution – into public ownership, we’d save £3.7 billion a year.”

By Cat Hobbs, We Own It

All over the country, millions of people are being beaten down by the cost of living crisis. But this crisis hasn’t arrived out of nowhere – it’s the foreseeable outcome of decades of privatisation, brutal austerity, and stagnating wages.

With energy prices expected to soar to up to £3,000 per year and leave 8.5 million households unable to heat their homes in the UK, there has never been a worse time to run our energy system in the goal of filling shareholder’s pockets. We’re all going to feel the pinch from the energy price cap rise, and for many of us it will mean having to choose between putting food on the table and heating our homes. As Martin Lewis has warned, this will literally be a life and death situation for many people unless serious action is taken.

But there is no need for the energy crisis to force people into poverty and destitution. If we brought our energy networks – transmission and distribution – into public ownership, we’d save £3.7 billion a year. This money could be used to bring down energy bills and/or to invest in renewable energy. It makes no sense to keep these private monopolies working for shareholders instead of the people of the UK. This isn’t the stuff of fantasy – the UK is the only country in Europe with a fully privatised transmission grid (other than Portugal who was forced to privatise its grid after the financial crisis). It should be common sense.  

Now is also the perfect time to create a publicly owned energy supply company that people can rely on. This company can make sure people aren’t ripped off, plan for fluctuations in global energy prices and invest in renewable energy. This is already normal in other countries. In Germany, France and Italy most people already get their energy from a publicly owned company, and research shows that prices are 20-30% lower in systems with public ownership. In France two thirds of people get their energy from EDF, which is 80% state owned. Their government has decided that EDF will take the hit, so energy bills won’t rise by more than 4%. A stark contrast to the over 50% rise expected in the UK.  

The UK government is currently letting struggling energy supply companies collapse or bailing them out. For example, the government has loaned at least £1.7 billion of public money to keep Bulb running (equivalent to more than £1000 per customer). It’s hugely wasteful to spend public money rescuing private companies and getting nothing back. Creating a publicly owned energy supply company is an easy way for the government to provide a public option for people without having to buy out existing companies. If and when private companies fail, their customers should be transferred to the publicly owned provider.  

The UK should also set up a publicly owned company to lead the way on renewables and tackle the climate crisis. This would reduce our reliance on fossil fuels and move us faster towards renewable power. Profits can be returned to the public purse here in the UK instead of flowing out of the country. Other countries show us this is possible. The Norwegian state owns Statkraft, the largest renewables generator in Europe (which operates in the UK). Meanwhile Denmark owns 50% of Ørsted which is the world’s largest developer of offshore wind power. Around 50% of UK offshore wind is publicly owned right now, but only 0.07% of it is publicly owned by the UK. This is a huge missed opportunity, and it is costing us.  

The causes of skyrocketing energy prices are complex, and public ownership can’t solve all of them – but it can ensure that people aren’t forced to bear the brunt so that corporations can continue to line their pockets. 

But while energy prices are rightly taking the headlines, it’s not the only issue hurting people’s pockets that public ownership could alleviate. Since 2004, the average price of a train journey has increased by at least 23.5%, and fares have risen twice as fast as wages since 2010. Our extortionate rail fares have gotten so high that in the UK we pay seven times as much for a season ticket as our European neighbours for an equivalent ticket. And this year, fares are rising by a staggering 3.8%, even as we face the cost of living crisis. If our railway was run in public ownership, we’d save £1 billion a year, enough to cut rail fares and increase investment in our rail infrastructure, to ensure that rail transport is affordable and accessible for all of us who rely on it.

Bus fares in England have also gone up 71% since 2005 and people are being priced out of travelling on them. Bringing our buses into public ownership would save us £506 million a year – money that could be invested in developing better bus networks and lower fares. Skyrocketing ticket prices aren’t inevitable, they’re a political choice – and right now this is a choice that we can no longer afford.

On top of this, water bills have increased by 35% in real terms since privatisation. If water belonged to all of us, we’d all save around £2.5 billion a year. That means that household water bills could be cut by 25%. 

Public ownership isn’t a silver bullet. But it is a popular and effective tool that the government can use to put an end to this cost of living crisis and ensure that our society is built to serve people, not profit.


Featured image: Towers of Thorpe Marsh energy plant. Photo credit: TJ Blackwell, 2010, Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

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