The key promise of Keir Starmer’s Labor conference speech was the proposed launch of Great British Energy, a publicly owned energy company to invest in clean energy in the UK as part of the party’s commitment to “fight the Conservatives in economic growth”. But how does it work? Is it the same as renationalizing energy?
What did Keir Starmer say about Great British Energy?
In his speech at the Labor conference, Starmer said the party would create a new power generation company, which would be publicly owned, within the first year of a Labor government.
He said Great British Energy would be “a new company that seizes the opportunities of British clean energy…because it’s right for jobs, because it’s right for growth, because it’s right for energy independence from tyrants like Putin. Yes, conference, Great British Energy will be publicly owned.”
Starmer added that “the path to net zero is no longer one of grim, austere self-denial: it is at the heart of modern 21st-century aspiration.”
Why is this necessary?
Today, many British power generators are wholly or partially owned by foreign governments or companies. In his speech, Starmer cited “the largest onshore wind farm in Wales”, adding: “Who does it belong to? Sweden. Power bills in Swansea are paying for schools and hospitals in Stockholm.
“The Chinese Communist Party has interests in our nuclear industry. And 5 million people in Britain pay their bills to a French-owned energy company.”
The Trades Union Congress analysis, seen by The Guardian, suggested British households will lose up to £4,400 each over the next two years because the UK does not have a nationalized power generation company.
The TUC argues that if the UK had a state-backed power generation company similar to France’s EDF, Germany’s EnBW or Sweden’s Vattenfall, it would receive between £63bn and £122bn in revenue over the next two years.
What would Great British Energy do?
The aim is for the UK to receive the economic benefit of the renewable energy boom, according to a Labor spokesman. The company would have operational independence, but also a mandate to invest in clean energy: wind, solar, tidal, nuclear and other emerging technologies.
The company may invest individually or in association with the private sector. The hope is that a state-backed company can make riskier investments, including investing in new technology in industries like tidal or modular reactors. Labor said it would give industries a boost by “making strategic investments that companies avoid.”
How would it be financed?
Under the Labor Party, the government would provide seed capital of the announced £8bn for the National Wealth Fund, but the long-term ambition is for Great British Energy to be profitable and even generate enough power to make a profit through exports. .
But there is a possibility that more government funding will be needed, as the company is likely to take time to turn a profit, especially if its investment is in riskier and emerging industries.
Is Labor nationalizing any of the existing companies?
No. A spokesman said that “it is not about nationalization, it is a new player in the market.” The new company can invest in joint ventures with the private sector, or even try to acquire companies, but that would be done commercially.
Will it be popular?
Research this week for the Common Wealth think tank showed that 72% of voters, and also 72% of Conservative voters, think setting up a government-owned state-owned energy company is a good idea.
But environmental and Labor activists have advocated full nationalization of energy companies, which this proposal falls short of. Chris Saltmarsh, national coordinator for the campaign group Labor for a Green New Deal, said: “The party must commit to public ownership of the entire energy system, so that we can address the cost of living crisis and meet the scale of the climate emergency. ”
How will business react?
Although Starmer stopped short of proposing the nationalization of existing companies, investors took his speech as a signal to sell energy shares.
Drax, the owner of the huge North Yorkshire power station, saw its shares fall 6%, while power generator SSE fell almost 7%. Shares of Centrica, which owns a stake in Britain’s nuclear fleet as well as its British Gas retail division, also fell 7%.