What nationalising energy companies would cost – and how to do it

UK could bring National Grid and retailers in-house and build public renewable energy, says ex-Labour policy chief

Andrew Fisher

17 August 2022, 12.01am

Image of banknotes and a prepayment meter key by Lydia, https://creativecommons.org/licenses/by/2.0/

Republished from OpenDemocracy under Creative Commons Attribution-NonCommercial 4.0 International licence.

When 62% of Conservative voters want energy run in the public sector, it’s fair to say the left has won the argument (75% of Labour voters agree, 68% of Lib Dems).

Yet public ownership is opposed passionately by the Conservative government, while the leader of the opposition has said he is “not in favour” of it – despite his election on a platform that committed to “bring rail, mail, water and energy into public ownership to end the great privatisation rip-off and save you money on your fares and bills”.

Public ownership is on the media’s radar, too. When Labour leader Keir Starmer announced his policy to freeze bills this week, he was asked why he wouldn’t also nationalise energy, replying that: “In a national emergency where people are struggling to pay their bills … the right choice is for every single penny to go to reducing those bills.”

But so long as energy remains privatised, every single penny won’t. Billions of pennies will keep going to shareholders instead.

The energy market was fractured under the mass privatisations of the Thatcher governments in the 1980s. It contains three sectors: producers or suppliers (those that produce energy), retailers (those that sell you energy), and distribution or transmission (the infrastructure that transports energy to your home).

It is important to bear this in mind when we’re talking about taking energy into public ownership. We need to be clear about what we want in public ownership and why.

By 2019, Labour had a detailed plan on how to do this – worked up by the teams around then shadow business and energy secretary Rebecca Long Bailey and then shadow chancellor John McDonnell. The plan is not the only way, but it illustrates what exists and how one could go about re-establishing a public energy ecosystem, run for people not profit.

The recent TUC report shows the cost of nationalising the ‘Big 5’ energy retailers – British Gas, E.ON, EDF, Scottish Power and Ovo – to be £2.8bn, which would go on buying all the companies’ shares. That’s a lot of money, equivalent to more than the annual budget of the Sure Start programme in 2009/10 (its peak year). But it’s a one-off cost, not an annual one.

And it’s not like the current privatised system doesn’t have its costs: since June 2021, the UK government has spent £2.7bn bailing out 28 energy companies that collapsed because they put short-term profits ahead of long-term stability – companies like Bulb Energy. We have spent billions of pounds already to get nothing in return. So £2.8bn is not a large amount of money to pay to gain these assets, rather than just bailing them out.

The big energy retail companies made £23bn in dividends between 2010 and 2020 according to Common Wealth, and £43bn if you include share buy-backs. What you choose to do with that surplus in public ownership is another matter: you could use it to invest in new clean energy or to lower bills or fund staff pay rises, rather than subject your workers to fire-and-rehire practices as British Gas did last year.

Labour’s previous plan also involved taking the distribution networks – the National Grid – into public ownership. This would end the profiteering at this level, too – with £13bn paid out in dividends over the five years prior to 2019. As Long Bailey said at the time, we need “public driven and coordinated action, without which we simply will not be able to tackle climate change”. Like previous nationalisations, the purchase of the grid and distribution networks could be achieved by swapping shares for government bonds. By international accounting standards, the cost is fiscally neutral as the state gains a revenue-generating asset, which more than pays for the bond yield.

The final part of the plan – and the most complicated – is production and supply. It would be impossible to nationalise the oilfields of Saudi Arabia or Qatar – and for good reasons we should want to leave fossil fuels in the ground, anyway, rather than contest their ownership.

And so what Labour proposed in 2019 was a mass investment in new renewable energy generation projects, with the public sector taking a stake and returning profits to the public. For example, under the ‘People’s Power Plan’, we proposed 37 new offshore wind farms with a 51% public stake, delivering 52GW alone by 2030, equivalent to 38 coal power stations. There were additional proposals for onshore wind, solar, and tidal schemes, as part of a 10-year £250bn Green Transformation Fund, which included other schemes like the Warm Homes insulation initiative.

Labour’s new shadow chancellor Rachel Reeves has promised a similar level of investment – a £28bn a year climate investment pledge.

Any surplus energy would then be sold on international markets, with a People’s Power Fund – a sort of sovereign wealth fund – to deliver public investment in local communities’ social infrastructure: a genuine levelling-up fund, perhaps.

Many people will say this can’t be done, but of course it has been before. The 1945 Attlee government nationalised energy and successive Conservative governments – including those of Churchill, MacMillan and Heath – were happy to have a nationalised asset. Harold MacMillan famously accused Margaret Thatcher of “selling off the family silver” when she privatised state industries.

When I was born in 1979, the National Coal Board, British Gas and British Petroleum were all publicly-owned or majority publicly-owned companies. Between them, they were the major suppliers of our energy. Our gas bills came from British Gas and our electricity bills from our regional electricity board (in my case Seeboard, the South Eastern Electricity Board), and coal and oil fuelled our power stations.

The regional electricity boards had been brought into being by the Attlee government’s Electricity Act 1947, when electricity companies were forcibly merged into regional area boards and nationalised. The Coal Industry Nationalisation Act 1946 and the Gas Act 1948 had together brought energy into public ownership.

Seeboard was privatised in 1990, and later became part of EDF Energy – ironically, the nationalised French energy company, whose profits from the UK’s stupidity are used to subsidise French consumers.

The French government has now fully nationalised EDF (previously it was 84% publicly owned), and household energy bills rose by just 4% this year – compared to over 50% in the UK and a forecast 200% by January 2023.

If Starmer doesn’t want to listen to me (or his own commitments from 2020), perhaps emulating the centrist Emmanuel Macron in this instance would be palatable?

From the depletion of fish stocks to the burning of the Amazon, profit has proved a failed regulator for use of our natural resources

In his later years, Robin Cook argued: “The market is incapable of respecting a common resource such as the environment, which provides no price signal to express the cost of its erosion nor to warn of the long-term dangers of its destruction.”

From the depletion of fish stocks to the burning of the Amazon, profit has proved a failed regulator for use of our natural resources. The market has also failed to decarbonise at pace, or to end the scourge of fuel poverty.

On the media this week, shadow energy secretary Ed Miliband said Labour is “continuing to look at what the right long-term solution is for our energy system”. It is up to all of us to campaign for that solution to be public ownership – whether that’s from within the Labour Party (like me) or from the outside.

Republished from OpenDemocracy under Creative Commons Attribution-NonCommercial 4.0 International licence.

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Continue ReadingWhat nationalising energy companies would cost – and how to do it

Coming soon …

Need to get posting again. Think that I need to try to impress on people, perhaps especially young people, that they need to get active. I doubt that there will be any meaningful climate action unless it’s demanded and climate action now is so important,

Continue ReadingComing soon …

Climate activists fill golf course holes with cement in France

https://www.independent.co.uk/climate-change/news/climate-activist-france-water-ban-b2144729.html

French climate activists have filled golf course holes with cement in protest against a water ban exemption on greens across the country during a severe drought.

The group, part of the Extinction Rebellion organisation, targeted courses near the city of Toulouse, calling golf the “leisure of the most privileged.”

In a petition, the local activists said the exemption showed that “economic madness takes precedence over ecological reason”.

“At a time when the greatest drought ever observed in France since the beginning of meteorological readings is raging, while the drying up of rivers is accelerating in our regions, at a time when 93 departments out of 96 are placed under water use restrictions, resulting in total bans on irrigation for certain market gardeners and for agriculture; a sector concerning a tiny fraction of the population seems to enjoy a privilege worthy of another world in these times of crisis; golf,” the group said in its online petition.

Continue ReadingClimate activists fill golf course holes with cement in France

Jeremy Corbyn criticises West for ‘pouring arms into Ukraine and prolonging war’

Image of Jeremy Corbyn, Wikimedia Image, Author Sophie Brown. Sophie Brown, CC BY-SA 4.0
Jeremy Corbyn. Author Sophie Brown, CC BY-SA 4.0 via Wikimedia Commons

https://www.independent.co.uk/news/world/europe/jeremy-corbyn-ukraine-russia-invasion-b2137091.html

The former Labour leader Jeremy Corbyn has criticised the west for arming Ukraine, arguing that its military support will prolong the war.

Countries including the UK and the US have sent Kyiv billions of pounds of weapons to help it fight off Vladimir Putin’s troops.

“Pouring arms in isn’t going to bring about a solution. It is only going to prolong and exaggerate this war,” Corbyn said, echoing the line taken by Moscow on western military aid to Ukraine.

Although the North Islington MP said he “disagrees” with the Russian invasion, he accused world leaders of using “the language of more war and more bellicose war” instead of pursuing peace.

“This war is disastrous for the people of Ukraine, for the people of Russia and for the safety and security of the whole world, and therefore there has to be more, much more effort, put into peace,” he said.

‘This is a war of propaganda’ John Pilger on Ukraine and Assange Talking Post with Yonden Lhatoo

20 min long unfortunately …

10 August 2022. This post disappears from the blog repeatedly, I don’t know why.

11 August 2022. [Technical] I’m very pleased with my current host while the last one was good when I joined but bought out and then turned useless. It’s cheap, fast and has excellent tech support. I should have flushed the NGINX cache after changing the theme to get this post displaying properly. Not sure about this theme despite it being very popular e.g. quoted text not reactive, [12/8/22 now working, think that my secret secretary should be thanked for that. I don’t know who my secret secretary is – it’s a secret ;)] could be simpler to use (how can I change the background colour in the header? why is it a different colour anyway? I want this sort of stuff to just work straight out of the box).

Continue ReadingJeremy Corbyn criticises West for ‘pouring arms into Ukraine and prolonging war’

Even the sycophancy of an amoral Tory press couldn’t save Boris Johnson

https://www.prospectmagazine.co.uk/politics/even-the-sycophancy-of-an-amoral-tory-press-couldnt-save-boris-johnson

Historians will be baffled by the readiness of Britain’s largest media organisations to lick Johnson’s boots for so long, and will surely look for an explanation. Part of the reason is ideology. Murdoch and the Barclay brothers personally supported the Brexit movement which propelled Johnson to power. 

Another is that Johnson cleverly ensured the major newspaper groups had a vested interest in maintaining him in office. Though lazy and incompetent, Johnson understands the press exceptionally well, and as prime minister managed it skilfully, giving the newspapers everything they wanted in exchange for their support.

This meant allowing media barons to set his agenda. The BBC has long been a target of the press—Murdoch in particular—because it occupies public space which corporate media craves for itself. Johnson’s attacks on the licence fee—and the briefing by allies of his culture secretary, Nadine Dorries, that on her watch “it’s over for the BBC” as we know it—look like gifts to his media backers. So was the appointment of an unqualified Tory donor, former banker Richard Sharp, as chairman of the national broadcaster. The same applies to the proposed Channel 4 sell-off.

Sunday Times Rich List: Frederick Barclay still wealthiest on Channel Islands

Who are the Barclay brothers?

Continue ReadingEven the sycophancy of an amoral Tory press couldn’t save Boris Johnson

Rethink

The post about rethinking how to campaign effectively. These are suggestions and you are welcome to disagree.

The problem is that climate campaigning has reduced severely and not recovered since pre-lockdown levels. The problem is that climate campaigning is not effective since pro-climate actions are not taken while actions damaging to the climate are. Participation has reduced, but that’s not the issue. The issue is that governments are not taking any meaningful or any action and that deterioration of the climate continues unabated.

Why is climate campaigning not effective? The oil industry is deluged with money, traditional media is generally opposed to climate action and governments are owned by the oil industry, high finance and the media barons, all having power without responsibility. I have reached the conclusion that governments and politicians are so dependent and subservient to big oil, high finance and the media barons that they are inseparable from them. I may be wrong on this point but can’t see any other explanation.

For example, traditional media has decided who the UK’s next prime minister will be. You may have been told that it is Conservative members’ decision but their preferred candidate has already actually been excluded. I know who the next prime minister will be so it’s pointless wasting time watching it. That’s the power that Murdoch has over government and politicians and he will no doubt have his usual back-door key to 10 Downing Street.

In UK we have recently witnessed unaccountable corrupt politicians alien to the concept of truth engaging in profiteering cronyism, showing a total disregard for laws and decency and contempt for the electorate. I suggest campaigning that seeks to hold politicians, big oil or the lying media to account may be effective.

Continue ReadingRethink

The world burns and the richest profit. It doesn’t have to be this way

Republished from OpenDemocracy under Creative Commons Attribution-NonCommercial 4.0 International licence.

As the effects of the climate crisis are seen in global heatwaves and droughts, oil firms are booming

The last time prices rose this fast was 41 years ago. The last time the UK got through prime ministers this fast was the mid-1970s. The last time there was open war between major European powers was in 1945. The last time the Northern Hemisphere was this hot was probably 125,000 years ago.

Yet the FTSE 100 is worth more than ever, corporate profits are higher than ever, there are more British billionaires than ever. And oil companies are richer than ever.

If we took climate change seriously, the petroleum industry would be bankrupt. These firms borrow billions against the future value of reserves they are yet to drill, but atmospheric physics demands we can’t burn that carbon if we wish civilisation to survive.

If our modern societies are to continue to exist in recognisable form, oil companies’ assets are worthless. And if we aren’t, they are still worthless.

But in reality, fossil fuel giants are doing better than ever. Last week, Shell said it expected to revise upwards the value of oil and gas assets it had previously written down, causing its share prices to leap for joy.

Saudi Arabia, which has struggled for investment ever since it allegedly hung a bunch of businessmen by their feet and beat them until they coughed up their bank details, has been welcomed in from the cold.

In May, oil exporter Saudi Aramco overtook Apple as the most valuable company in the world – the most valuable in human history. This week, just months after pretending to take the climate emergency seriously at COP26, Joe Biden has gone to fist bump Saudi’s narco-in-chief and beg him to pump more death into capitalism’s veins.

Meanwhile, as temperatures across England rise above levels with which human homeostasis can cope, the climate crisis collides with the health crisis.

Crushed by a dozen years of Tory austerity and the government’s incompetent response to COVID, NHS waiting lists are already at an all-time high. Accident and Emergency units are “on the fringe of collapse”, with ambulances queueing up outside hospitals, unable to hand over their patients. This means that over the next few days – when experts predict we will see up to ten thousand excess deaths as a result of the heatwave – vast numbers of people will likely spend time cooking in ambulances.

And with world food supplies already shaken by the war in Ukraine, the heatwave also means worsening global hunger.

Italian farmers are expected to lose a third of summer crops like rice and corn, while Sardinia’s fields have been scoffed by a plague of locusts. In China, soaring temperatures are drying out soil, devastating agriculture of all kinds. East Africa is experiencing one of its driest rainy seasons in 40 years, which, combined with the fact that 40% of Africa’s wheat usually comes from Russia or Ukraine, leaves tens of millions facing hunger.

Food and agriculture billionaires, on the other hand, raised their collective wealth by 45% over the past two years, while global food giant Cargill posted a 63% increase in its profits for last year, the best haul in its nearly 160-year history.

With politics in crisis, people are increasingly realising that they are going to have to fight for the future.

As the world moves out of pandemic mode (if not actually out of the pandemic), we’re entering a new phase of global capitalism.

For big businesses and billionaires, the ‘omnicrisis’ presents a perfect opportunity for disaster capitalism: use the overwhelming sense that everything is on fire to plunder: wrack up prices while keeping wages down, extract, extract, extract, extract.

But this isn’t the inevitable future. The faint echo of promises to ‘build back better’ may have disappeared, and, with politics in crisis, people are increasingly realising that they are going to have to fight for that future.

In Britain, more and more unions are voting to strike against the plunder. As concern about the climate crisis grows, so will action against those driving it. Distrust of our broken politics has deepened, creating a deep volatility.

A vast political fight over what comes next has arrived, just as the Labour Party has abandoned the field and, in the coming months, we can expect something else to rush into that space.

What? That’s up to you.

Republished from OpenDemocracy under Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingThe world burns and the richest profit. It doesn’t have to be this way

We’re occupying schools across the world to protest climate inaction

Youth activists involved in End Fossil: Occupy!

We can’t keep sitting in school, pretending everything is all right, and studying as if the planet wasn’t on fire

The bottom line is: we can’t keep pretending everything is all right, studying as if the planet wasn’t on fire. As other students did before us – from the students of May of ’68 in France to the Arab spring, from the Chilean Penguin Revolution and Primavera Secundarista in Brazil to Occupy Wall Street, we will stop our business-as-usual lives to show our governments and society that we need to change everything, now. From Lisbon to California, from Peru to Germany and from Madrid to Ivory Coast, we call on young people to get together and organize an international revolutionary generation that can change the system.

Continue ReadingWe’re occupying schools across the world to protest climate inaction

Should climate activists get involved in electoral politics?

This is one suggestion from thinking about effective climate campaigning, the post about effective campaigning is yet to be published.

Should climate activists get involved in electoral politics?

We definitely should attempt to get rid of MPs who are enemies to climate action – there are many e.g. Steve Baker, Kwasi Kwarteng and DUP’s Sammy Wilson. Even the threat of such action may prevent MPs taking bribes from the oil industry.

I suggest that we would need to endorse certain candidates and campaign to promote them over others. I would expect climate campaigners to have the level of support to ‘throw’ or ‘flip’ elections. It’s worth bearing in mind that by the general election of 2024 we will have had more climate events since they seem to be happening continuously. If we were to follow this route, it would be wise to avoid actions that frustrate or alienate the public.

This is a suggestion for climate campaigning groups to discuss and decide for themselves. It’s a complex topic – should we campaign against the Conservative party? That’s an easy one but what about the Labour Party? Red Tories who’s leader has called for injunctions against climate protestors. If we’re going to get involved in electoral politics should we campaign for the best possible outcome for the climate and what is that, is it achievable, will it work? “Endorsed by XR”?

28/7/22 Suggestions if you have an MP who opposes climate action.

Let their local party know that you are opposed to them e.g. by writing to them from individuals or your group and telling them, a physical letter may be considered more seriously than an email.

Start an organisation and associated website that opposes them like Steve Baker Watch. later: or Craig Mackinlay Watch. [12/8/22 Robert Courts Watch].

Deliver leaflets, write letters to local papers, participate in radio phone-in discussions documenting their climate-opposing actions.

Continue ReadingShould climate activists get involved in electoral politics?