Responses to Labour's renationalisation plans

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. 1.     How much will it cost to take control of the entire energy sector?

1. 2.     How much will it cost for the government to give people a job on the exact same terms and conditions?

1. 3.     Where will these jobs come from, will they all be in the public sector?

1. 4.     Does providing support for housing and income needs go beyond the protections provided by the welfare system?

1. 5.     If so, how much extra will that cost?

1. 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."