Why Labour should nationalise energy suppliers

Putting the energy retail sector in public hands would generate support for decarbonisation and deliver a better deal for consumers. 

 

NS

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The climate crisis is the greatest single threat humanity faces. This stark warning has been reinforced by Extinction Rebellion’s recent protests, by images of plastic on the ocean floor and by Sir David Attenborough's compelling documentaries.

The science is clear and has been for decades. We’ve known for too long we’re damaging the planet but have been too slow to remedy our collective mistakes. And so, the demands for governments to act are intensifying – especially from the young.

Only last week BP warned that while global emissions rose at their fastest rate since 2011 last year, progress on climate change remains slow. And although the Prime Minister has now made a commitment that the UK will reach net zero carbon emissions by 2050, this is nowhere near to being enshrined in law.

Across the world, the calls for a green new deal are gathering pace. Politicians of different stripes are asking for fundamental changes to the global economy that tackle inequality and climate catastrophe at the same time. In America, charismatic Congressperson Alexandria Ocasio-Cortez has electrified the debate, bringing genuine hope that the world’s biggest economy might finally become a leader in tackling climate change.

In the UK too, campaigners have begun to sketch out a plan for a different kind of economy that works for the many yet preserves the environment. Labour is already setting the agenda at the forefront of this debate. 

However, the fight against inequality and injustice must be at the heart of whatever solutions are found. The most vulnerable and worst off in society must be protected from paying a high financial cost for heating and lighting their homes.

There is a simple and straightforward answer – public ownership of the energy retail market, that is those companies that sell energy to consumers. It would address the urgent need for action on climate issues by encouraging customers to focus on renewable alternatives, while also delivering a better deal for consumers. Public ownership would also ensure protection for the jobs of thousands of staff in the energy sector.

Competition between suppliers such as British Gas, SSE and Npower is creating complexity for customers and a lack of clarity over tariffs, prices and value for money – and putting important jobs at risk.

Currently the talk is about ownership of energy networks – the wires and pipes that heat our homes and give us light – and of production. However, the retail sector is where the real power lies and, more importantly, where we can win the hearts and minds of the public. If a future Labour government were to create a dominant national public energy purchaser and retailer, a real focus on decarbonisation could begin with immediate effect, and at a lower cost than many alternatives.

This would enable the government to demand that producers focus on increasing renewable and low-carbon energy capacity. A nationalised retail market would also mean that a future government could protect consumers, slash costs for the poorest and ensure nobody is on an extortionate legacy tariff.

Nationalisation would create a “green army” working to decarbonise UK homes and businesses. Customer services and sales staff would have their time freed up to focus on helping consumers become more energy efficient which reduces consumption, bills and emissions. Renewable forms of energy like solar panels or converting homes to greener hydrogen boilers would become the norm among consumers. 

We shouldn’t underestimate the scale of the challenge we face. Changing who owns the pipes and wires that deliver our energy is a start, but it isn’t enough. Decarbonisation can’t be forced: we need to win public support. That’s what nationalising the retail sector can achieve.

Public ownership of the retail sector could be achieved for £6 billion – a fraction of the cost of nationalising the energy networks.

It should be central to the Labour Party’s green industrial revolution. Affordable energy, a national drive towards renewables, removing the flawed and false competition from the household energy sector, providing fair tariffs for consumers and ensuring the retention of vital unionised jobs and pay.

I am confident the next Labour government will tackle the crisis of climate change, and inequality.

This way, it can begin to challenge them both together.

Dave Prentis is general secretary of UNISON.