Should we follow New Zealand and nationalise consumer energy sales?

There's much more to be done in the energy sector, writes William Wallace.

New Statesman

Kia ora! New Zealand; stunning mountains, untouched coastline, rugby madness – but also a policy goldmine. British politicians love “borrowing” ideas from our Australian and New Zealander cousins (Scandanavia always serves well in a pinch). From welfare reform to free schools, through family law and prisoner rehabilitation, we’ll take it. So could there be the potential to add energy policy inspired by the Kiwi left to the mix?

A conversation with a friend in the New Zealand energy sector alerted me to this policy announcement from the New Zealand Labour Party. Could the proposal to create a new, independent body, "NZ Power", to act as a single buyer of wholesale electricity inspire the UK parties to revisit their troubled consumer energy policies? With the Energy Bill stumbling into a new parliamentary session and Ofgem announcing a new, complex, tariff comparison service there is certainly scope for fresh policy thinking.

At first sight, as a New Zealand Minister has said, it all sounds a little “North Korea like”. And it is. But reading the policy in more detail, the power of a new regulator to take a unified approach to development, the energy mix, set prices based on operating costs and a fair return on investment and encourage competition in the interests of consumers might pique more interest among policy makers. The policy comes with claims that prices for the average household will drop by £150, business prices will drop between 5 per cent and 7 per cent and 5000 jobs will be created. All hot air? Maybe, but it sounds politically attractive enough to give some food for thought.

Energy is shaping up to be one of the defining issues of the next general election like never before. But despite the current Energy Bill going through its parliamentary stages, neither Caroline Flint (with her slightly light pronouncements on abolishing Ofgem announced on a whim at party conference) or Number Ten’s disastrous counter-attack announcing un-workable plans that everyone would get the lowest tariff have come up with a way to address persistent energy price rises. With Labour viewing energy through the prism of consumer fairness and the Coalition through the prism of growth, there is certainly scope for  some fresh thinking on the issue.

In reality, this policy isn’t going to happen in the UK. It’s clearly politically toxic, with the Coalition likely to reject it on ideological and competition grounds and any Labour temptation towards nationalisation tempered by long-memories of Michael Foot and co. But what this does serve to show is that there is a paucity of ideas in this electorally significant area and as the Energy Bill continues to stall in Parliament, manifestos develop and the parties move to a war footing, that fact is becoming ever more politically relevant.