Labour says legislation is ready to nationalise utilities
The UK’s opposition Labour Party said it’s already drafted laws to nationalize water and energy utilities as the prospect of a general election looms.
Taking control of energy transmission and distribution networks as well as water companies will help bring down bills for consumers and allow the government to pursue a strategy to curb greenhouse gas emissions, Rebecca Long-Bailey, the party’s business spokeswoman, said on Sunday
“We’ve got the legislation ready; we know how we’re going to set up these new bodies,” Long-Bailey said at a panel discussion on the fringes of the annual Labour Party conference in Brighton, southeast England.
The comments suggest Labour will be ready to drive the policy forward in the early days of any new administration it forms. While the party has said the policy won’t cost taxpayers any money, the Centre for Policy Studies, a right-wing think-tank, last year estimated the cost of buying National Grid Plc and other energy distribution networks at 55 billion pounds ($69 billion), with water utilities carrying a price tag as high as 100 billion pounds.
Labour’s finance spokesman, John McDonnell has said the party will compensate equity investors with bonds issued by the UK Treasury at a value decided by the Parliament.
Long-Bailey said Labour’s nationalization plans will include:
- The creation of a new National Energy Agency “on the existing institutional base of the National Grid”
- The formation of 14 new regional energy agencies “on the footprint of the existing distribution networks”
- Those new energy agencies will be tasked with ensuring the U.K. meets its carbon-reduction targets, including setting up charging points for electric vehicles
- There will also be the opportunity for local authorities to run energy networks, as well as for communities to run small street-scale programs
- Existing water companies will be acquired through a new act of Parliament that nationalizes the companies and creates regional water authorities
“We’re going to turn off the taps siphoning off billions of pounds into shareholders’ pockets and we’re going to take back control of these vital services,” Long-Bailey said.
Bloomberg
Inside Labour’s green war on business
The problem with Jeremy Corbyn and John McDonnell is that they are just not radical enough. That is the view of thousands of Labour members at this week’s party conference in Brighton. Their mission is to railroad the opposition’s leadership into going much further and faster on combating climate change.
Operating under the banner Labour for a Green New Deal (LabGND), these campaigners want the party to commit the UK to a target of net zero-carbon emissions by 2030 — 20 years ahead of the current plan.
They have bold ideas about how to get there, talking freely about decommissioning oilfields in the North Sea and erecting an entirely new green power grid that would be free for all to use. It would be called the National Energy Agency (NEA).
What might at first sound like a tiff within the Labour family does in fact symbolise the collision between escalating public concern about climate change and politicians and business leaders who will have to address those fears — and find ways to foot the bill. This clash of ideas could have enormous ramifications for Britain’s businesses and political parties of all stripes.
In the run-up to the conference, nearly 130 of the CLPs proposed LabGND’s motion on zero-carbon emissions by 2030 — far more than any other motion and double the 61 local parties that signed up to an anti-Brexit motion.
“We launched Labour for a Green New Deal because we were not satisfied with our party’s response to the climate emergency,” said Chris Saltmarsh, a founder and director of the group.
“We already have 20 LabGND groups around the country and 20 more on the way.”
But eradicating every CO2 emission in the UK within 11 years? The blueprint is bold.
First on the list is startling for its departure from Labour’s past and the miners’ strike of the 1980s: the swift decommissioning of all oilfields and coal mines.
Although the last deep coal mine shut almost four years ago, closing North Sea oil and gas fields would hammer coastal communities. In return they would receive public money for job-creating renewable energy projects.
Saltmarsh argues for a national state-funded programme to retrofit all homes with energy-efficient insulation, boilers and other eco-friendly features. However, he is not convinced that nationalisation of the big six energy companies or a state takeover of the National Grid is sensible either.
“Underinvestment has artificially inflated the profits of some energy companies,” he said. “Nationalisation may not offer good value for the taxpayer.”
Instead, Saltmarsh proposes building a renewable energy network that would be free at point of use — funded by a huge increase in taxes. Customers would swiftly migrate from current providers to the new NEA, he said.
Sunday Times
Billpayers on hook as nine energy firms face collapse
Nine energy suppliers are likely to go bust in the next 12 months, leaving households with a total bill totalling tens of millions of pounds.
Energy analysts say that at least three smaller suppliers are in trouble and looking for a buyer, while a further six on the brink.
Fears are also growing for the health of some suppliers that have taken on the customers of firms that have already failed, raising questions over regulator Ofgem’s handling of the market.
Fourteen energy firms have collapsed since January 2018. Eversmart was the latest to fold, earlier this month.
Ellen Fraser of consultancy Baringa Partners, which has advised the government and Ofgem, said smaller companies may face a “vicious spiral”, with the closure rate likely to escalate this winter.
“An unstable position has been created where a number of suppliers will find it difficult to remain in business and many others are forecast to make losses for at least the next two years,” she said.
“Urgent action is also required from Ofgem . . . The experience for customers transitioning supplier through the supplier of last resort process can be extremely poor and risks creating customer detriment.”
Sunday Times
Electricity and gas bills: now is the time to switch energy supplier
The experts are in agreement: now is the moment to grab a new fixed-price gas and electricity tariff in time for the big central heating switch-on, in order to protect yourself against the chunky price hikes that appear to be heading our way.
Uncertainty in the Middle East, concerns over French nuclear supplies, gas restrictions from Russia – and, dare we mention it, Brexit – all arguably add up to a situation where those who are free to switch gas and electricity supplier should probably do so now.
On Monday, Craig Lowrey, a senior energy watcher at Cornwall Insight, warned consumers that prices looked destined to rise.
“An increase in oil prices is likely to lead to a corresponding rise in gas and electricity prices, which will be reflected in higher tariffs for customers going forward, while existing fixed-price, fixed-duration tariffs may also be withdrawn,” he said.
“The prospect of an oil-led commodity price spike adds to the chance of market rises feeding into higher bills for customers at some stage.”
His forecast was immediately borne out, as EDF pulled a top deal later that day, meaning now is the time to act.
An average household will spend about £1,170 next year if they are currently on a capped standard gas and electricity tariff with one of the big six suppliers.
The Guardian
Now is the winter of our disconnect – all thanks to Ofgem
Thanks to the ineptitude of regulator Ofgem, the energy market has been in a parlous state for some time (writes James Coney).
Suppliers are collapsing, the smart- meter rollout is a mess, customer service levels are as diabolical as ever and there remains great doubt about whether the price cap introduced this year will make life better or worse for customers in the long run.
Yet the market’s about to get even worse, because now is the winter of our disconnect — the time when small suppliers burdened by millions of pounds of debt will switch off for good, leaving their customers to be bailed out by other energy companies.
Except that they’ll actually be bailed out by us. Everything in the energy market is paid for by customers, from giant projects such as the Hinckley Point nuclear plant in Somerset to the wages of the bunglers at Ofgem. (The regulator is funded by a levy on the industry, but like all these things it is passed on to us — the billpayers — eventually.)
No new suppliers have launched since Ofgem cracked down on the licensing free-for-all that allowed these companies to be created in people’s living rooms. Yet there are still about 170 suppliers registered with Ofgem, more than 100 of which aren’t currently doing business.
Three are said to be looking for a buyer, but who would want them? The companies are likely to be lumbered with debt and dissatisfied customers. Let them go to the wall, buyers would think, and then snap up their clients.
Meanwhile, comparison websites keep raking in commission on tariffs offered by firms that are about to go bust, because the sites exercise absolutely no due diligence over which companies appear on their lists. That commission, too, is ultimately paid by us, in the form of higher bills.
And if you want a further example of the extraordinary lack of joined-up thinking in our energy policy, it’s this: while we’re all being told to get a smart meter and go greener, because it’s imagined we’ll sit at home watching carefully to see how much power is eaten up when we accidentally leave the TV on standby, thousands of homeowners with solar panels are lodging mis-selling complaints because the money they receive for supplying unused energy to the grid has been chopped back. They have paid a devastating penalty for actually doing something to save the planet.
There will be no changing consumer habits until the entire shambolic system is cleaned up. It’s time for the regulator to stop this money merry go-round funded by us.
Sunday Times