Jeremy Corbyn speech to Alternative Models of Ownership Conference

It is a pleasure to close today’s conference which has shown once again that it is our Party that is coming up with big ideas.

And we’re not talking about ideas and policies dreamed up by corporate lobbyists and think tanks or the wonks of Westminster, but plans and policies rooted in the experience and understanding of our members and our movement; drawing on the ingenuity of each individual working together as part of a collective endeavour with a common goal.

Each of you here today is helping to develop the ideas and the policies that will define not just the next Labour Government but a whole new political era of real change. An era that will be as John said earlier radically fairer more equal and more democratic.

The questions of ownership and control that we’ve been discussing today go right to the heart of what is needed to create that different kind of society.

Because it cannot be right, economically effective, or socially just that profits extracted from vital public services are used to line the pockets of shareholders when they could and should be reinvested in those services or used to reduce consumer bills.

We know that those services will be better run when they are directly accountable to the public in the hands of the workforce responsible for their front line delivery and of the people who use and rely on them. It is those people not share price speculators who are the real experts.

That’s why, at last year’s general election, under the stewardship of Shadow Business Secretary Rebecca Long-Bailey, Transport Secretary, Andy McDonald and Environment Secretary, Sue Hayman, Labour pledged to bring energy, rail, water, and mail into public ownership and to put democratic management at the heart of how those industries are run.

This is not a return to the 20th century model of nationalisation but a catapult into 21st century public ownership.

The failure of privatisation and outsourcing of public services could not be clearer.

From Carillion’s collapse and the private sector’s chronic inability to run the East Coast Mainline to the exorbitant costs of PFI and the hopeless inability of G4S even to handle basic security at the London Olympics the same story is repeated again and again; costly, inefficient, secretive.

Unaccountable corporate featherbedding, lubricated by revolving door appointments between Whitehall, Westminster and private boardrooms as service standards and the pay and conditions of public service workers are driven down. This obsessive drive to outsource and privatise has been tried and tested to destruction.

Carillion’s meltdown is a watershed moment. We need to take a new direction with a genuinely mixed economy fit for the 21st century that meets the demands of cutting edge technological change. Public services that reflect today’s society and the industries of the future.

We need to put Britain at the forefront of the wave of international change in favour of public, democratic ownership and control of our services and utilities.

From India to Canada, countries across the world are waking up to the fact that privatisation has failed and are taking back control of their public services.

Research by the Transnational Institute identifies 835 international examples of privatisation being reversed.

It really is happening: from water under citizen ownership and control in Grenoble, France to mail under national ownership and control in Argentina.

There are very good reasons for what’s taking place. The neoliberal ideology that drove the privatisation frenzy forgot a key lesson that’s understood even by conventional neoclassical economics; that where there are natural monopolies, markets fail.

The architect of Thatcherite privatisation, Professor Stephen Littlechild thought regulators could mimic market competition but he was wrong.

The regulators have proved too weak to close to the companies they’re supposed to be regulating and too prone to corporate capture which is why we’ve seen productivity increases of just 1% a year since our water industry was privatised despite all the new technology that the water industry has at its disposal.

Without genuine competition or public accountability private ownership of key utilities has meant customers at the mercy of rip-off price fixing.

Water bills have increased 40% in real terms since privatisation but we don’t have anywhere else to go for our water when prices go up.

It’s this ridiculous and highly profitable situation that the water companies are so desperate to protect. The case for public ownership is so clear and so popular and we’ve demonstrated how it’s an investment with no net cost for the taxpayer. The water companies are so frightened that some have commissioned a so-called independent report to make the public believe nothing can change.

But as we know, things can and they will change.

And they must when we’ve all seen how the big energy companies jack up prices too knowing full well most people don’t switch suppliers.

And the energy grids are even worse, overcharging customers by £7.5bn over the last 8 years, according to Citizens Advice.

Climate change

But Labour’s plans are responding to an even bigger market failure than natural monopolies.

We need to take back control of our energy system because, as Nicholas Stern described, “the greatest market failure the world has seen” is climate change.

Now, it pains me to have to contradict the US President, especially using data from a US government agency but according to NASA, the world’s average temperature in 2017 was 0.9 degrees Celsius above the 1951 to 1980 average.

We are long past debating whether global warming is happening, or if it is man-made. It is.

And it is not just a threat to our future on this planet it is fuelling wars, natural disasters and the refugee crisis right now.

To avoid a future of extreme heatwaves, shortages of fresh water, falling crop yields, increased flooding, dangerous rises in sea levels, and the mass loss of biodiversity in both land and sea we need, as a bare minimum, to meet our Paris obligations and seek to limit global warming to 1.5 degrees above pre-industrial levels.

The challenge of climate change requires us to radically shift the way we organise our economy.

In 1945, elected to govern a country ravaged by six years of war, Clem Attlee’s Labour Government knew that the only way to rebuild our economy was through a decisive turn to collective action.

Necessary action to help avert climate catastrophe requires us to be at least as radical.

Tackling global warming won’t be achieved by warm words. Nobody is fooled by Michael Gove’s reinvention of himself as an eco-warrior.

Behind the rhetoric lies a trail of environmental destruction.

This is a Government that has licensed fracking, declared a moratorium on renewable levies, while massively subsidising fossil fuels dithered over tidal held back onshore wind U-turned on making all new homes zero carbon and is failing to take the necessary measures to meet our legal commitments to reduce CO2 emissions.

At last year’s election by contrast, Labour pledged to ban fracking, insulate four million homes, invest in rail and bus networks to reduce traffic on our roads, invest in tidal and wind, and deliver 60% of our energy from renewable sources by 2030.

Public ownership of our energy system

A green energy system will look radically different to the one we have today. The past is a centralised system with a few large plants. The future is decentralised, flexible and diverse with new sources of energy large and small, from tidal to solar.

Smart technologies will optimise usage so that instead of keeping gas plants running just in case there is a lull in renewable generation the system fulfils needs by identifying the greenest, most local energy source.

There will be much more use of local, micro grids and of batteries to store and balance fluctuating renewable energy.

We will still need a grid to match energy supply with demand and import and export renewable energy abroad because the wind won’t always blow where energy is needed.

But it will be a smart grid, radically transformed.

Transforming the grid will require investment and planning on a scale that is simply not happening under the current system.

Price cap regulation encourages private grid operators to cut costs and pay money out in dividends, not to plan how the grid will need to work in 25 years’ time, or to make the necessary long-term investments we need to get there.

Grid operators are notorious for overcharging and causing delays in connecting renewables because they have no incentive to make it easy for clean, community generators to connect to the grid, or to encourage community grid initiatives that might end up undermining their profits.

The greenest energy is usually the most local but people have been queuing up for years to connect renewable energy to the national grid.

With the national grid in public hands we can put tackling climate change at the heart of our energy system, committing to renewable generation from tidal to onshore wind.

Investing to connect renewable energy to the grid, giving impetus to the kind of research and innovation that will make our grids smarter, more flexible, and capable of genuine optimisation.

And actively devolving power to local communities, by giving community energy practical support and encouragement.

Energy transition will depend on the initiative and ingenuity of the many to localise the production and consumption of energy.

We need public ownership and democratic control to make that happen and use the skills and knowledge of the workforce and communities across the country.

There are some who hanker after a Thatcherite so-called “prosumer” model where people produce and consume their own energy and whole communities opt out of the grid.

But not everyone has the resources - natural or financial - to go it alone. Energy independence for some will mean rising bills and unreliable energy for the rest.

We need a publicly-owned grid to act as the great leveller, distributing energy from where it is plentiful to where it is scarce and guaranteeing that everyone has access to clean, affordable energy all of the time.

Anything else is not only unjust, it risks doing immeasurable harm to the climate cause.

Because we will only win support for the changes that are needed if we make sure that everyone shares in the benefits.

And there are many benefits, not just in cheaper energy, an end to fuel poverty, cleaner air, and a sustainable planet, but also in the creation of new good jobs and industries in renewable energy and green tech across the country.

In short, to go green, we must take control of our energy.

Just Transition

This is why it is so important that these changes are planned democratically.

Many people and communities in Britain are economically reliant on fossil fuels.

Our energy system needs to change but it cannot be workers and local communities who pay the price.

The devastation wreaked when our coal mines were closed, leaving a legacy of decline that former mining communities are still living with, is a brutal reminder of what can happen when those communities are silenced and disregarded in the process of change.

Never again.

In public hands, under democratic control, workforces and their unions will be the managers of this change, not its casualties.

The growth of green energy and green tech offers huge opportunities for job creation. Our publicly owned energy system will ensure a smooth transition and protect workers and communities, seizing those opportunities for the many, not the few.

So let me make this commitment here today. Just as the US GI Bill gave education, housing and income support to every unemployed veteran returning from the Second World War, the next Labour Government will guarantee that all energy workers are offered retraining, a new job on equivalent terms and conditions, covered by collective agreements and fully supported in their housing and income needs through transition.

We will make good the words of the Canadian campaigner Naomi Klein, when she said:

“The real solutions to the climate crisis are also our best hope of building a much more enlightened economic system, one that closes deep inequalities, strengthens and transforms the public sphere, generates plentiful, dignified work and radically reins in corporate power.”

Conclusion

Comrades and friends, a blinkered faith in untrammelled markets and a doctrinal rejection of the power of collective action are the twin dogmas that have blighted political thinking in this country for nearly 40 years, have been brutally exposed for the destructive blind alley they are.

Who can maintain that handing the private sector control of our public services delivers economic or social efficiency and best value after the havoc wreaked by the collapse of Carillion, or the £2 billion public bailout of the East Coast Mainline rail franchise?

An overriding obsession with what is claimed to be “efficiency” but which almost always turns out to mean simply “the cheapest” has fixated on cutting costs for the private providers while loading them on to the public purse and suffocated the public service ethos in the process.

By taking our public services back into public hands, we will not only put a stop to rip-off monopoly pricing, we will put our shared values and collective goals at the heart of how those public services are run.

Whether that’s an energy system that doesn’t jeopardise the future of our planet,

A joined up transport system that helps us, rather than hinders us,

From moving away from reliance on fossil fuels,

A postal service that delivers for everyone across the UK and which invests for technological change rather than managing decline,

A water system which puts an end to wasteful leakage and environmental degradation,

A society which puts its most valuable resources, the creations of our collective endeavour, in the hands of everyone who is part of that society,

Extending the principle of universalism, right across our basic services.

Free at the point of use to all who use them.

That’s real, everyday, practical socialism.

And we’re going to build it together.

Conservative response to Labour’s energy announcement

“Labour's plan to put politicians in charge of your electricity would mean nowhere to go when things go wrong. This didn't work last time, it would mean worse services, and ordinary working people will end up paying the price.

“This Conservative Government is the greenest government ever. We focus on what works for the public, to deliver lower prices and a higher quality service.”

Notes to Editors

There are still a number of questions Labour need to answer about this announcement:

1. How much will it cost to take control of the entire energy sector?
2. How much will it cost for the government to give people a job on the exact same terms and conditions?
3. Where will these jobs come from, will they all be in the public sector?
4. Does providing support for housing and income needs go beyond the protections provided by the welfare system?
5. If so, how much extra will that cost?
6. Labour have said they want to model the UK’s energy industry on Germany, but aren’t energy bills in Germany more than a third higher than they are in the UK?

Labour’s plan would mean higher bills, a worse service and the costs would rack up and up…

· Labour want to model our energy industry on Germany. The Shadow Energy Secretary wants to hand over the energy industry to local communities based on a German model (Politics Home, 29 September 2015, link).

· When factoring in taxes, German households pay over a third more than UK counterparts for their electricity. According to a DBEIS analysis of international household electricity costs, UK households pay 15.20 pence per kWh including taxes whereas German households including taxes pay 26.24 pence per kWh – 42 per cent more (DBEIS, International domestic energy prices, 21 December 2017, link).

· Independent research shows that Labour’s renationalisation plans would cost at least £176 billion. The Centre for Policy Studies found that Labour’s renationalisation programme would have an upfront cost of at least £176 billion. That means more wasted on debt interest and less spent on our vital public services (The Cost of Nationalisation, 21 January 2018, link).
· Labour’s plan to renationalise the water industry could cost £90 billion. In a report released last week the Social Market Foundation found that if a future labour government wanted to buy the English water industry at fair market prices they would pay between £87 and £90 billion to acquire water firms currently owned by shareholders an investors, including pension funds (Mirror, 5 February 2018, link).

· Since Autumn Budget 2017, Labour have been asked 40 times how they would afford their borrowing binge – and failed to answer every time. John McDonnell said instead: ‘That’s why we have iPads and advisers.’ (Today, 23 November 2017; The Andrew Marr Show, 19 November 2017; Paterson on Sunday, 3 December 2017; Good Morning Britain, 2 January 2018; The Andrew Marr Show, 21 January 2018; Today, 10 February 2018).
Labour are proposing an expensive and uncosted extension to benefits, which would lead to more debt and higher taxes.

· Labour have guaranteed jobs, housing and income through energy transition – but they haven’t said how they would pay for it. Jeremy Corbyn will say: ‘Our energy system needs to change, but it cannot be workers who pay the price. So just as the US GI Bill gave education, housing and income support to every unemployed veteran returning from the Second World War, the next Labour government will guarantee that if anyone is displaced by energy transition they will be offered retraining, a new job on equivalent terms and conditions, covered by collective agreements, and fully supported in their housing and income needs through transition’ (Press Association, 10 February 2018, archived).

This Conservative Government is the greenest ever.

· 2017 was the cleanest and greenest year ever for electricity generating in the UK, breaking 13 clean energy records (WWF press release, 27 December 2017, link).

· We have shown tackling climate change and growing an economy can go hand in hand. Since 1990, the UK cut emissions by 42 per cent, while our economy grew by 67 per cent. This is in no small part due to the 85 per cent reduction in coal use we’ve seen in that time (DBEIS press release, 16 November 2017, link).
· Our carbon emissions have fallen while our national income has risen faster and further per person than any other nation in the G7. Since 1990, emissions are down by 42 per cent while the economy has grown by 67 per cent (DBEIS, Clean Strategy Growth, 12 October 2017, link).

Responding to Labour’s call to renationalise the entire energy sector, John O’Connell, Chief Executive at the TaxPayers’ Alliance, said:

“Whatever Jeremy Corbyn says about putting people in control, the reality is that politicians and union barons would be running the show and making a complete hash of it, just as they did in the 1970's. The last time this happened Britain suffered the three day week and mass power cuts.

John McDonnell's claim that there would be no cost to taxpayers of renationalising vast swathes of industry is either an outright lie or a display of breathtaking ignorance."