Brian Wilson: Why energy nationalisation plan is a good idea. Vested interests decried Labour’s plan to nationalise the National Grid but there are good reasons to do so. Amidst the fog of Brexit, it was a relief to hear of a substantial policy initiative emerging this week, namely Labour’s strategy document Bringing Energy Home. Its main thrust is that gas and electricity transmission and distribution systems should be brought back into public ownership while up to two million houses throughout the UK would be equipped with solar panels. The immediate focus was not on the merits of these proposals (which are considerable) but on the level of compensation that might be paid to departing shareholders. Anything less than full market value (reflecting the gargantuan profitability of monopoly businesses) would be an affront to all we hold dear, or so we were told by an array of self-interested voices. I doubt if that plea will carry much weight among the masses who are reasonably well aware that, from the outset, gas and electricity privatisations have been massive rip-offs – first of assets which had been funded by decades of public investment and then of consumers who have paid through the nose for the sector’s vast profitability. However, the law and justice are not the same thing. Whatever scheme of compensation a hypothetical Labour government might come up with, it would be tested in the courts. Meanwhile, it is not worth wasting time on discussing the terms of compensation as opposed to the principle of what is proposed. If, as we are told, the country and the world face a climate emergency and we really must do more to achieve a decarbonised energy mix, the question of whether public ownership is a good idea becomes easy to answer. Of course it is. Scotland’s energy history offers text-book examples of government’s critical role. Under public ownership, we became large-scale exporters of electricity. The hydro schemes of the 1940s and 50s would never have happened without political direction and enforcement. Even if a commercial operator had wanted to build them – unlikely – what would a regulator have made of them? Equally, without the power of the public balance sheet, nuclear stations would not have been built at Hunterston or Torness. Whatever one thinks of nuclear power, it cannot be disputed that these mighty engines of the Scottish economy have given us half a century of secure supply and low-carbon electricity. Whether or not Labour’s plan is implemented, it should spark serious consideration in all parties of whether a system created to facilitate privatisation is capable of meeting the new challenges. We should also be reminded of just how much we owe to past public ownership and vision.
Scotsman 18th May 2019 read more »
Public ownership used to be easy. The public authority would just acquire shares in a private corporation. And a private concern would then become a public asset, a private monopoly transformed into a public service. Many socialists still think nationalisation can be simple, mere questions of political will and a parliamentary majority. The government needs only to want to do it. The UK’s opposition Labour party is currently led by such socialists. They genuinely are seeking to take firmly back into the government’s hands various privatised services, especially “key utilities” – rail, energy, water and the Royal Mail. And a prospect of a Labour government in the UK is a serious one. But how easy will this be, even if the political will and parliamentary majority are there? Can what was done in the 1940s, and to a lesser extent the 1970s, be done again? Looking at the current utilities landscape, there is one glaring difference from the postwar era: regulation. Each of the utility sectors is now regulated by statutory body, and usually in accordance with EU law (which the UK would continue to follow during any Brexit transition period). Given this regulation, there is the issue of whether it matters if the providers are in public or private hands – the regulatory model would (or should) mean the outcomes would be the same. Indeed, the frequently asserted objections to private ownership can or could be cured by regulation rather than nationalisation, and at far lesser expense. “Rip-off prices” and “excessive dividends” are capable of quicker and more immediate remedies than wholesale public acquisitions.
FT 17th May 2019 read more »
Another climate report and another urgent call for action, along with a dizzying array of graphs and figures. The Committee on Climate Change (CCC), who advise the UK government on policies and planning for a low carbon economy, have produced their analysis and recommendations on how to stop UK’s contribution to global warming by 2050. This follows the “Paris Agreement” signed in December 2015 where the UK, along with 196 other countries, agreed to reduce their nation’s greenhouse gas emissions in efforts to limit global warming to 1.5°C above pre-industrial levels. The CCC’s excellent and thorough report makes for some tough reading; not for its 277 pages and plethora of statistics and figures, but for the scale of collective effort required. The benign-sounding estimate of costs – 1-2% of GDP – disguises the extent of system change and efforts required, not only of government and businesses, but households as well.
Sussex Energy Group 17th May 2019 read more »