Labour has accused National Grid of running a “desperate PR campaign” after the company defended its position against the opposition’s plans to take it back into public ownership.
The Labour party unveiled more details last week about its proposals which could see it create a National Energy Agency to own and maintain transmission infrastructure if elected to power.
Plans for energy networks were outlined in a Labour document entitled Bringing Energy Home published on 15 May ahead of leader Jeremy Corbyn and shadow energy secretary Rebecca Long-Bailey’s official presentation of the proposals the next day.
The party suggested its plan would help usher in a “Green Industrial Revolution” and tackle climate change. It also pledged to put solar panels in nearly two million homes.
But National Grid said the renationalisation plan would “delay the huge amount of progress and investment” that is making the UK a “leader” in the move to green energy.
National Grid featured prominently in Labour’s policy document while the official presentation of the plans coincided with the day the utility published its financial results. It reported an 18 per cent drop in operating profits to £2.8 billion after writing off £137 million of costs incurred in developing the connections for the now shelved Wylfa Newydd and Moorside nuclear projects.
Labour was approached by Utility Week for a comment in response to claims from Dan Neidle, a partner at Magic Circle law firm Clifford Chance LLP, who said the party’s nationalisation plans went against international treaties.
A Labour spokesperson said: “National Grid is running a desperate PR campaign because they know that they will not defeat us in the courts.”
National Grid has since responded to the claims, a spokesperson said: “As Labour’s proposal was announced on the day of our annual results it was inevitable we would be asked for our views, which are that we believe state ownership would only delay the great progress already being made towards a green energy future.”
Writing exclusively for Utility Week John Pettigrew chief executive of National Grid suggested Labour’s criticisms of the utility company are unfair.
Pettigrew said: “Reading Labour’s criticisms of National Grid and their proposals for state ownership resonated with me personally, both because I know the unfairness of their criticisms of us but also because I can see what is wrong with their proposals.”
Labour’s plans could see investors being paid less than the market rate for their assets, prompting concern within the industry.
The party’s plans for energy networks followed quick on the heels of leaked proposals about how Labour would set about renationalising water companies.
The party has previously rebuffed claims its plans to nationalise key industries could be successfully challenged in the European Court of Human Rights.
In its analysis of the plans ratings agency Moody’s said Labour’s proposals support its view that any nationalisation is “likely to be structured in a way that avoids imposing losses on operating company creditors”, but warns it could “weaken the credit quality of holding companies”.