May 18, 2023 - 10:00am
The Labour Party’s biggest financial backer, the trade union Unite, is calling for the nationalisation of the entire British energy sector. Politically, this move is interesting, and seems to raise the prospect that Keir Starmer’s party may end up as terrifying to the business community as Jeremy Corbyn’s was. But on a purely economic basis, calls to nationalise look odd.
Unite’s General Secretary, Sharon Graham, says that by nationalising the sector Starmer can solve the energy crisis. “We are paying ridiculous amounts for our energy that many other countries aren’t because they own their own energy production,” said Graham. “If we owned our own energy, £90bn is what it would cost but from that point it sits on the books as an asset […] it generates return. And then we could regulate what households and businesses pay for their energy.”
Graham seems either confused or misinformed. The Government does not need to nationalise the energy sector to regulate — or, more accurately, subsidise — what the public pays. Indeed, through the Energy Price Guarantee (EPG) the Government is already doing this, at enormous public sum. In its first six months alone, the EPG is estimated to have cost around £25bn. That means that two years of the current guarantees would cost the Government more than the entire cost of nationalising the grid as estimated by Unite.
It appears that Unite has bought into its own PR. The union argues that the energy price increases we are seeing are due to so-called “greedflation” — that is, because energy companies are hiking profits and taking advantage of the public. But this is not true. The energy crisis is due to a simple lack of energy. This in turn is due to the impact of the war in Ukraine and the ensuing sanctions, which have almost eliminated cheap Russian piped gas into Europe.
Apart from turning back on the pipelines to Russia, the only way to solve this problem is to build alternative energy sources domestically. In fairness, Unite seems to partially recognise this and advocates building nuclear power plants. This is a welcome intervention, but these power plants take almost a decade to come online.
The quickest domestic power sources that can be built are coal-fuelled power plants. These take around three or four years to build, which is still a long time, considering how pressing the energy crisis is. But Unite cannot advocate for these because the Left fell out of love with the mining sector under Tony Blair, and today any notion that Britain should produce and consume coal is looked upon with horror.
Perhaps Unite could argue that nationalisation would ensure more rapid building of power plants than leaving it to the private sector. But the core issues are regulation and a matter of sheer will. Is the Government comfortable with building certain power source capacities out? If they are, there are plenty of ways to get this done, with or without nationalisation. If they are not, then the energy crisis may never be resolved.
One might be forgiven for thinking that Unite is reaching into the past and pushing policies of nationalisation, because its officials do not want to take a good look in the mirror and ask themselves who they are. Are they part of the same trade union movement that allied with coal miners against Margaret Thatcher’s attempts to close the pits in the 1980s? Or are they at the forefront of a new movement, staffed by university graduates whose worldview is more aligned with the World Economic Forum than with any truly working-class interests? Unfortunately, it appears to be the latter.
Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics
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SubscribeOver-paying for energy couldn’t possibly be first and foremost a direct result of two decades of government policy specifically designed to increase energy prices, could it ? That’ll be that genius Ed Milliband’s climate change act, Net Zero stupidity, not investing in domestic oil and gas production, importing coking coal instead of producing our own, not building more nuclear power stations, closing existing power stations, … the list goes on and on.
All policies of which Sharon Graham no doubt approves. Along with the rest of our “leaders”.
But no – it can all be fixed by an ownership change. Because that really will increase supply, won’t it ?
These idiots are – in Wolfgang Pauli’s immortal phrase – “not even wrong”.
A 12 year old could figure this out. Why can’t govt? Again, I’m always flabbergasted by the incompetence of govt – right and left. If you implement policies to increase the cost of energy, the price will go up. WTF is happening to make the west so damn delusional?
A 12 year old could figure this out. Why can’t govt? Again, I’m always flabbergasted by the incompetence of govt – right and left. If you implement policies to increase the cost of energy, the price will go up. WTF is happening to make the west so damn delusional?
Over-paying for energy couldn’t possibly be first and foremost a direct result of two decades of government policy specifically designed to increase energy prices, could it ? That’ll be that genius Ed Milliband’s climate change act, Net Zero stupidity, not investing in domestic oil and gas production, importing coking coal instead of producing our own, not building more nuclear power stations, closing existing power stations, … the list goes on and on.
All policies of which Sharon Graham no doubt approves. Along with the rest of our “leaders”.
But no – it can all be fixed by an ownership change. Because that really will increase supply, won’t it ?
These idiots are – in Wolfgang Pauli’s immortal phrase – “not even wrong”.
Nationalisation did not work back in the day and for exactly the same reasons will not work now. Politicians for the last 40 years have completely bolloxed our nation’s energy policies and strategies. Our country needs cheap energy and to be as self-sufficient as possible enabling the country to generate wealth for us all. This can better be done if the political class pull their fingers out and think longer-term and avoid dumbed-down socialist ideology that patently does not work.
“Perhaps Unite could argue that nationalisation would ensure more rapid building of power plants than leaving it to the private sector. “
One of the most laughable lines in recent memory.
“Perhaps Unite could argue that nationalisation would ensure more rapid building of power plants than leaving it to the private sector. “
One of the most laughable lines in recent memory.
Nationalisation did not work back in the day and for exactly the same reasons will not work now. Politicians for the last 40 years have completely bolloxed our nation’s energy policies and strategies. Our country needs cheap energy and to be as self-sufficient as possible enabling the country to generate wealth for us all. This can better be done if the political class pull their fingers out and think longer-term and avoid dumbed-down socialist ideology that patently does not work.
Having zero competition ” faux privatisation” in fields such as water, electricity, gas, railways, is an abberation that merely fills investors pockets from the no-alternative choice consumer…. not unlike the days of USSR economics…
Having zero competition ” faux privatisation” in fields such as water, electricity, gas, railways, is an abberation that merely fills investors pockets from the no-alternative choice consumer…. not unlike the days of USSR economics…
As the great majority of the British voters believe that the global warming frenzy is:
a. A political agenda
b. Britain’s contribution makes not one jot of difference
and that our air is absolutely fine, our Government should wake up and radically supercharge our own oil and gas extraction and bin the net Zero/ electric only cars by 2030, once and for all, plus all the other draconian impositions: it is just another re-run of the brainwashing that led all the lemmings into the recycling joke: to me, its rubbish, goes in one bin, and its the disposal people who are paid, and profit from, sorting the stuff out.
ps being an eco zealot is the social death equivalent of ” holding knife like pen”….on the settee in the leounge parlour room…
Is this true though? Do most voters realize the devastating implications of net zero? I’m not sure. We certainly haven’t had an adult conversation about this anywhere.
ps being an eco zealot is the social death equivalent of ” holding knife like pen”….on the settee in the leounge parlour room…
Is this true though? Do most voters realize the devastating implications of net zero? I’m not sure. We certainly haven’t had an adult conversation about this anywhere.
As the great majority of the British voters believe that the global warming frenzy is:
a. A political agenda
b. Britain’s contribution makes not one jot of difference
and that our air is absolutely fine, our Government should wake up and radically supercharge our own oil and gas extraction and bin the net Zero/ electric only cars by 2030, once and for all, plus all the other draconian impositions: it is just another re-run of the brainwashing that led all the lemmings into the recycling joke: to me, its rubbish, goes in one bin, and its the disposal people who are paid, and profit from, sorting the stuff out.
“And then we could regulate what households and businesses pay for their energy.”
But we already do through ‘green’ taxes and VAT – both of which could be reduced overnight making energy much cheaper although not more plentiful.
But Government control is a lazy and drawn out process. Fracking anyone?
“And then we could regulate what households and businesses pay for their energy.”
But we already do through ‘green’ taxes and VAT – both of which could be reduced overnight making energy much cheaper although not more plentiful.
But Government control is a lazy and drawn out process. Fracking anyone?
Of course it was Centrica that decommissioned a large part of its Rough Storage facility for short term profit maximisation. Regulators/Govt should potentially have stepped in and prevented that on a national security grounds after horizon scanning on potential future risks. So certainly some lessons to learn.
However v much doubt this Unite ‘desire’ ends up being a Starmer priority. It’s unaffordable anyway. Much else we can do first on different forms, more efficiency and much enhanced regulation.
Of course it was Centrica that decommissioned a large part of its Rough Storage facility for short term profit maximisation. Regulators/Govt should potentially have stepped in and prevented that on a national security grounds after horizon scanning on potential future risks. So certainly some lessons to learn.
However v much doubt this Unite ‘desire’ ends up being a Starmer priority. It’s unaffordable anyway. Much else we can do first on different forms, more efficiency and much enhanced regulation.