Public Ownership of Energy Companies

Richard Burgon Excerpts

Monday 31st October 2022 Westminster Hall

[Richard Burgon (Leeds East) (Lab)]

It is a real pleasure to serve under your chairship, Mrs Murray, and a pleasure to follow my hon. Friend the Member for Wirral West (Margaret Greenwood), who always makes such a compelling case for public ownership. I was pleased that she mentioned the escalating privatisation of the national health service, which she has worked hard to expose. It seems to me, and to many others, that the Government have an ideological opposition to public ownership: no matter the evidence, reality or public opinion, the Government will resist it.

Let us take a look at the petition that secured today’s debate: 109,000 people signed it, showing the strength of support for bringing energy into public ownership. A Survation poll this year showed that not a bare majority of the public, but 66%, believe that energy should be in public ownership. That includes a majority of Conservative party voters, and maybe even members too. The energy sector is being used as a cash cow for shareholders. We have an energy system that is privatised at every single stage—generation, transmission, distribution and supply. That means that at every opportunity, profits are extracted so there are higher bills for ordinary people, and so there is less investment and a worse service, resulting in a failure to make the green transition work.

Let us take the big six energy suppliers. Common Wealth shows that £47 billion-worth of dividends and share buy-backs have occurred since 2010. That money should have been in a public system, but it goes much deeper than that. Even the National Grid is paying out billions each year in dividends. It is lose-lose for everyone, apart from those who own our system. Who does own energy? Other states have bought our system, as is the case with EDF, for example. So have billionaires. Northern Powergrid is owned by the US billionaire Warren Buffett. UK Power Networks is owned by the Hong Kong billionaire Li Ka-shing.

The high prices are not just about the global crisis. Of course, we are in a global crisis, but privatisation makes it much worse. In many other countries, energy bills have not increased as they have here. Their Governments are using public ownership as a tool to help people. In France, for example, publicly owned EDF kept energy bill rises to just 4% in April 2022, while our prices soared and soared. Norway has been paying 80% of people’s bills above a capped price.

Even before the current energy crisis began, domestic energy bills steadily increased by 50% in real terms—inflation-adjusted—from 1996 to 2018. We see and people out there feel what privatisation means in practice. In practice, privatisation of our energy system means higher bills than needed. Research shows that prices are 20% to 30% lower in systems with public ownership. Privatisation means, in practice, wasting vital funds on lining the pockets of shareholders. Privatisation means, in practice, failing to invest enough in connecting renewable energy to the grid, with the needs of the current fossil fuel firms put first.

What is the way forward? This petition, signed by well over 100,000 people, shows the way forward: nationalise the big five energy supply retail companies, most of which are just owned by bigger companies anyway. I welcome the plan from the TUC setting out how a publicly owned energy retail system could deliver a social pricing structure that lets everyone afford the energy they need to cook, clean and stay warm all year round, while the wealthiest with extravagant energy use pay more per unit. The way forward is also to bring the privatised monopolies of the National Grid and regional distribution into public ownership to help us prepare for the energy transition that we need. The way forward must include introducing permanent—and high—windfall taxes on North sea oil and gas companies that use the revenues to cut people’s bills, invest in renewable energy and pay for further nationalisation policies that will benefit the country.

We must create a new state-owned renewable energy company to ensure that the errors of privatisation are not repeated. It is useful to reflect on the fact that nine out of 10 countries leading on green transition have a state-owned company leading the way on renewables. We cannot become fixated on continuing and defending privatisation because of ideological dogma and the hero worship of the Thatcher period. As someone once said, “What matters is what works.” Public ownership works; privatisation has failed. Let us have an energy system that puts people and planet before profit. If we do, that is a good way to set about helping to get people through this cost of living crisis and making way for a better, greener, fairer and more decent future.