Voices: Nationalising energy companies won’t cut our bills – but there’s another way
Over the weekend, Labour MP Sam Tarry said his party should call for renationalising energy companies, an idea that has grown in popularity with rising energy bills. His thoughts are echoed by the TUC, which says doing so can deliver fairer bills for households. The concept has also received widespread public support: over half of the British public want to see energy companies nationalised, with just 8 per cent opposed to the idea.
Energy is a basic necessity of life, like water or health services; without it you cannot do anything, unless you live in a cave in the Himalayas. So I agree with the TUC that governments have a duty to ensure we have access to cheap, reliable electricity, like other public goods. But the answer doesn’t lie in the government running energy companies, because it doesn’t account for how the industry is changing, and it won’t cut bills.
Britain isn’t an energy producer anymore, so a nationalised energy company would still have to pay sky-high prices for foreign coal, oil and gas. We would shift the cost from everyone’s energy bills to taxpayers’, which is more equitable but it won’t cut bills. When Britain was a coal mining nation, and when energy production was centralised and the industry tightly controlled, this made sense.
There’s a better way to cut energy bills: decentralise it all. Allow anyone and everyone to put up solar panels or wind farms to generate their own electricity. Get every single office, school and council building in the country to install solar panels on their roofs. Allow local community groups to start their own wind farm and sell that electricity locally. In other words, unleash the clean energy revolution.
This doesn’t need government money because it’s bottom up rather than top down. There is huge pent-up demand across the country to do this – the problem is not money but regulation. The Conservatives have made it extremely difficult to build solar and wind farms on British land, and the two candidates running for leader want to make it even harder. Clean energy has been deliberately strangled at birth by the Tories, despite its huge popularity with the public.
The Labour Party’s energy policy shouldn’t be a debate on whether or not to nationalise energy companies. It should have the guts to do what the Conservatives – still aligned with Big Oil – won’t do: start a clean energy revolution here at home. It would create jobs, lower bills and ensure future energy security. Britain may not be particularly sunny but solar panels just need sunlight, not warm weather, to produce electricity.
Sound too far-fetched? In fact, this thinking is behind the Democratic Party’s Inflation Reduction Act, because clean energy is cheaper and investing in it will drive down energy bills. Its aim is to accelerate the deployment of solar and wind farms across the US, and in battery technology to store that energy (for when the wind doesn’t blow and sun doesn’t shine). In Australia, households have taken up solar panels so enthusiastically that electricity bills are nearly zero during the summer. China, meanwhile, built more wind power capacity in one year than the rest of the world combined over 5 years.
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Across the world, forward-thinking countries are investing into clean energy or allowing companies and people to do it themselves. Only in Britain we are being held back because the Conservatives would rather import oil and gas. That puts us at the mercy of President Putin.
Does this mean the Labour Party should say nothing? Not at all. It needs to fiercely advocate for a clean energy revolution. It also needs to think about how to reform the National Grid, so it can be upgraded to better handle clean energy. That may need to be nationalised.
But a debate around whether we should nationalise energy companies should be left to the 70s and 80s. Britain has to move on – because technology itself has.
