Labour and energy nationalisation

David Toke explains why power should be given to local councils, not the pro-nuclear GMB

Labour’s proposals to take the national and regional energy grid back into public ownership may give a boost to workers’ interests over shareholder profits, but the way the proposals are set out produces an increased risk of nuclear power being given priority over renewable energy. Put simply, that is because the way the proposals are structured means more power to the GMB in particular, a union which is very pro-nuclear and which is relatively hostile to renewable energy and a smart energy network. 

Labour announced the plan, in May, to take the transmission and distribution energy structure into public ownership, as well as plans to set up a ‘National Energy Agency’ (to run the National Grid), Regional Energy Agencies (to run regional distribution), and give opportunities for municipal ownership of distribution on a local basis.

This plan can achieve traditional Labour Movement objectives, but its impact on pushing forward a green agenda is doubtful. Put bluntly, the more that power is given to bodies that will be influenced by organisations like the GMB (who favour centralised power station solutions), the less useful will be the outcome. The proposals make a gesture in favour of municipalisation, but for most places the reality will be central control.

A good case can be made out that the privatisation of the energy infrastructure monopolies (the electricity and gas grids) did not lower consumer bills; it merely transferred money from the labour force (by reducing its numbers and pay) to the private owners/shareholders. Thomas Piketty has written much about how income has been transferred from labour to capital, and monopoly energy infrastructure might make a good example of this trend. Public ownership could reverse this in this sector, albeit in the context of an argument about how much compensation the private shareholders should be paid.

However, if the (currently) putative national and regional energy agencies are set up and, as the Labour plan says, they oversee decarbonising targets, there is little doubt in which direction policy on this topic will shift: towards nuclear power and away from a decentralised renewable energy system. Currently the National Grid Company has been making noises in the direction of a more flexible, renewable energy-based system. 

Yet under a centrally controlled energy network, under Labour plans, policy power would pass to a quango which could be much more easily influenced by trade unions. That, of course, as a matter of principle, is not bad. The problem is that the most important union in this sector (the GMB) has shown explicit hostility towards renewable energy and the ‘smart’ energy systems needed to integrate it.

For example, in 2016 Justin Bowden, the National Secretary of the GMB, described National Grid’s promotion of a ‘smart energy revolution’ as ‘fanciful nonsense’. Instead he promoted new nuclear power plants. Earlier this year Justin Bowden was again attacking National Grid plans for more electricity interconnectors, and in the same press release the GMB attacked the performance of solar power and wind power. 

The GMB has consistently urged the Government to shore up plans for nuclear power stations with state money. This is despite the fact that the nuclear power plants are taking decades to deliver at very high costs for the energy consumer and almost certainly also the public finances.

Of course the GMB is guided by its members, and many of them work in nuclear power stations. Fair enough. But why should this fact dominate UK energy policy? Yet Labour’s centralist dominated proposals seem destined to achieve just this. Of course there is mention about how local authorities will have an option to take over their local grids, but the usual practice will be centralised ownership. Clearly the Labour plans are wrong. 

Control over the grid should be given to local authorities as a matter of course, perhaps in consortia (certainly at a national, transmission, level). Local authorities are influenced by the local electorate and local citizen groups. They will be sympathetic to green energy priorities. On the other hand centrally owned quangos will be insulated from such democratic input and will be under the thumb of the existing industrial establishment. Innovation will go out of the window.

People forget that in 1948 the electricity industry was not taken into public ownership. It was already largely owned by local authorities. It was nationalised, yes, but this was primarily an act of centralisation, not public ownership. What we need today is more decentralisation, not control by the dead hand of the fading industrial establishment.

Dave Toke

Dr David Toke is Reader in Energy Politics and Law at Aberdeen University. His latest book, Low Carbon Politics, is published by Routledge.