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National Grid hits back

Labour in green clash over energy nationalisation plan

Electricity bill

Labour says privatisation has ‘ripped off’ customers


Labour’s plans to renationalise the UK’s energy grid has run into a dispute over its claim that it would be a key step towards decarbonising the economy.

Shadow Business Secretary, Rebecca Long Bailey, will announce today that the party aims to make heat and electricity a human right for all.

Labour claims that the privatisation of the energy network is “ripping off customers” with 25% of energy bills “used to line the pockets of shareholders, with over £13 billion paid out in dividends over the last five years.”

Ms Long Bailey will say that public agencies would be given the power and direct responsibility to deliver Labour’s ambitious climate change targets with a focus on solar, wind and tidal potential, “overcoming the bottlenecks, inefficiencies and underinvestment that has characterised private ownership.”

Public energy agencies will also be tasked with tackling fuel poverty and protecting energy as a human right – making good on Labour’s promise that energy transition must go hand-in-hand with social justice. 

The Labour proposals are contained in a document entitled Bringing Energy Home, due to be presented on Thursday by leader Jeremy Corbyn and Ms Long Bailey.

It said the policies were part of its plans to “usher in a Green Industrial Revolution in housing, transport and industry – creating over 400,000 jobs and tackling climate change”. Labour is committed to generating at least 60% of the UK’s electricity and heat from renewable and low-carbon sources by 2030.

Ms Long Bailey said: “Climate change represents a risk to our future, but also an opportunity to gather our resources and transform it through a Green Industrial Revolution. That means dramatic, public driven and coordinated action, without which we simply will not be able to tackle climate change.

“So our plans see climate justice and social justice as inseparable. It’s an insult and an injustice to our people and our planet for companies operating the grid to rip customers off, line the pockets of the rich and not invest properly in renewable energy.

Rebecca Long Bailey: ‘end the rip off’

“Only by taking the grid into public ownership can we decarbonise the economy at the pace needed to secure the planet for our children and grandchildren while ending the rip off, creating good jobs in local communities and making heating and electricity a human right.

“That’s why public and collective ownership is a fundamental part of Labour’s Green Industrial Revolution.”

Mr Corbyn added: “Our Green Industrial Revolution will benefit working-class people with cheaper energy bills, more rewarding well-paid jobs, and new industries to revive the parts of our country that have been held back for far too long.”

National Grid, whose shares fell ahead of the announcement, is the UK’s largest transmitter of electricity and gas via its network of pylons and pipelines. It said the proposal was the “last thing” that was needed.

It said: “These proposals for state ownership of the energy networks would only serve to delay the huge amount of progress and investment that is already helping to make this country a leader in the move to green energy.

“At a time when there is increased urgency to meet the challenges of climate change, the last thing that is needed is the enormous distraction, cost and complexity contained in these plans.”

Labour’s plan to renationalise UK energy networks has not gone down well with big energy firm SSE. A spokeswoman said: “Aside from extensive disruption, paying for state ownership and control of energy networks would require full compensation for owners at great expense to taxpayers, or risk destabilising UK listed utilities, which most pensions are invested in.

Labour plans to nationalise the energy network were included in its 2017 General Election manifesto.

The Conservative’s vice chairman for policy, Chris Philp, said Labour’s “ideological plan for the state to seize these companies would cost an eye-watering £100bn and saddle taxpayers with their debts”.

“It would leave politicians in Westminster in charge of keeping the lights on and leave customers with nowhere else to turn.

“With no credible plan for how Labour would pay for this, more borrowing and tax hikes would be inevitable.

“Through measures like our energy price cap, the Conservative government will continue to protect people from unfair bill rises while increasing renewable electricity to a record high.”

Labour’s proposed energy structure

Labour plans to set up a National Energy Agency (NEA) to own and maintain transmission infrastructure, replacing the National Grid. The NEA will ensure access to electricity and heat as a human right and set and oversee targets for decarbonisation to meet Labour’s target of 60% renewable energy by 2030 and net zero carbon before 2050.

Fourteen Regional Energy Agencies (REAs) will replace the existing Distribution Network Operators. REAs will hold statutory responsibility for decarbonising electricity and heat; hold statutory responsibility for ensuring every household can access affordable energy, and to reduce fuel poverty; take responsibility for rolling out the UK’s electric vehicle charging infrastructure; and create local jobs.

Where local authorities want to accelerate the energy transition, they will be able to set up Municipal Energy Agencies (MEAs), and take over responsibility for ownership and operation of distribution networks from the REAs. MEAs will then own and operate distribution networks, enabling them to integrate networks with local generation and supply.

In addition to the public institutions described above, Labour will support the establishment of Local Energy Communities (LECs) to develop small scale energy generation and engage with distribution at the micro level (e.g. a housing estate, street or small village). LECs will be wholly community owned and non-profit making.

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