“No, it’s not full public ownership but it’s a hugely important first step. Great British Energy will prove that public ownership is a successful way to run a company in the national interest.”
By We Own It
Public ownership in Starmer’s keynote speech, as one of Labour’s flagship policies?! This is HUGE.
Great British Energy, a publicly owned renewable energy generation company, would help tackle the cost of living crisis and the climate crisis.
Two months ago, we told the Guardian that Labour was being too cautious on public ownership and asked the question
“Why not set up a publicly owned renewable generation company to drive forward water and wind energy, while creating jobs and boosting the economy?”
Our petition to nationalise energy called for a new state owned renewable energy company as one of the solutions to the crisis.
We pointed out that 9 out of 10 of the countries leading the way in terms of green transition already have a publicly owned renewable energy company – and so the UK needs to do the same.
Yesterday Keir Starmer announced exactly that! We’re absolutely thrilled.
Here are the answers to some of your questions…
Is Great British Energy the same thing as nationalising energy or bringing it into public ownership?
Not exactly. It’s about developing new public ownership of energy generation which is one part of the energy system.
Great British Energy will be a new publicly owned company returning profits to the UK, generating new renewable energy and creating jobs in this country. Its investment in renewable energy will help us to reach net zero. Private generation companies will still operate but there will be a state owned generation company in the market.
Labour has not proposed having a public energy supplier like EDF in France (something they could easily call for, as the collapse of Bulb offers an easy way to set up a public retail company).
Labour has also not proposed bringing the energy grid – transmission and distribution – into public ownership, although this is another policy that would make sense.
Who owns our renewable energy generation right now?
Common Wealth research shows that 82% of UK offshore wind capacity is foreign owned. 44% of this is public ownership by other countries! Denmark is the biggest player, followed by Norway.
As Common Wealth says “Remarkably, the UK government owns less of our aggregate offshore wind capacity (0.03 per cent) than the government of Malaysia (0.1%), let alone the governments of Denmark (20%) or Norway (9%). The city of Munich, meanwhile, owns more (0.85%) than any British town or city.”
Our natural resources aren’t being used to directly benefit people in this country the way they could be.
How will this help reduce bills?
TUC analysis shows that the government is missing out on £63 billion – £122 billion of direct income over the coming two years, due to past decisions to privatise our power plants and the resulting lack of UK public ownership of electricity generation.
“If the UK today had a public energy champion similar to EDF in France, EnBW in Baden- Württemberg (Germany), or Vattenfall in Sweden, a significant portion of the excess profits taken by privatised electricity generators due to soaring wholesale prices would be coming instead to the government. Government would be able to use these revenues – equivalent to £2,250-£4,400 per UK household – to reduce bills or accelerate home insulation roll-out.”
How will this tackle climate crisis?
The TUC explains that a publicly owned energy generation company can:
- Insulate the public from soaring and volatile energy prices by keeping bills down
- Reinvest profits into communities or return them to the public
- Boost domestic manufacturing, local supply chains and economies
- Create and maintain quality skilled jobs with collective bargaining
- Plan for and invest in the climate transition instead of waiting for the market
- Speed up the delivery of both an industrial strategy and new energy infrastructure
- Invent and develop new technology instead of depending on foreign companies
Evidence from the MIT Center for Energy and Environmental Policy Research shows “a consistent pattern concerning the role of ownership on renewable energy investment among European utilities: state-owned utilities dedicate higher shares of investments to renewables, particularly in countries with stringent climate policies and when the general quality of regulation is high”.
Research from Mariana Mazzucato shows that “public investments not only have a positive but also consistently the largest effect on private investment flows relative to feed-in tariffs, taxes and renewable portfolio standards in general”.
As Mathew Lawrence of Common Wealth writes in the Guardian, this would also provide more energy security:
“Labour’s policy is common sense. Our current energy system is prone to crises because it depends on expensive, volatile imported fossil fuels. By accelerating the transition to clean power, Great British Energy would reduce the UK’s exposure to import shocks driven by fossil fuels.”
Is this popular?
Yes, hugely! Public ownership of energy is popular in general.
Our polling (via Survation) shows that 66% of the public want energy in public ownership, including 62% of Conservative voters. 68% of Red Wall voters say energy should be publicly run.
Common Wealth polling shows 72% of Conservative voters support a public clean energy company.
Didn’t this policy come from Corbyn anyway?
Yes, brilliant policies for public ownership of energy were developed under Corbyn. We’re really happy that Labour today is recognising the need for public ownership whoever is in charge of the party.
We Own It is independent of any political party – it’s our job to push all parties in the direction of public ownership of our public services.
We’re very happy that Labour for a Green New Deal and Momentum are fighting so hard within the Labour Party for full public ownership, and Green New Deal Rising are organising for climate justice.
Keir Starmer dropped the pledge for public or common ownership of energy – why do you think he’ll stick to this?
That was very disappointing. However, the fact that Starmer was so clear in his keynote speech at conference that Great British Energy would be publicly owned means we are now in new territory. Starmer also said that this policy would be rolled out in the first year of government – again this suggests this is a serious commitment. The next general election could be coming sooner than the Conservatives would like – so with Labour way ahead in the polls, these announcements really matter.
This isn’t full public ownership of energy? Why do you think this is good enough?
No, it’s not full public ownership but it’s a hugely important first step. Great British Energy will prove that public ownership is a successful way to run a company in the national interest. Of course we already have examples of successful publicly owned companies – like the Met Office, Ordnance Survey, Channel 4 and Scottish Water. But this will be a brand new company spearheading the transition to net zero.
It’s fantastic that the leader of the opposition has committed to public ownership of this company – this is a really important shift in narrative. Public ownership is the norm in other European countries but in the UK we still need to make the case to politicians that privatisation of our public services and assets was an ideological experiment that failed.
Now we can keep pushing – showing why Bulb should be turned into a new public supply company and why we need to take our energy grid into public hands.
What can I do?
Read more about public ownership of energy and sign the petition. You can help to build on this victory and make sure Great British Energy is a big success leading to more public ownership in the future.
- This article was originally published by We Own It on September 28th, 2022.
- You can follow We Own It on Facebook, twitter and YouTube.
- Send Chancellor Kwasi Kwarteng and Business Secretary Jacob Rees-Mogg a message – bring energy into public ownership, so we can take control of our energy for the future. Add your name to the We Own It petition here,