Jeremy Corbyn and Rebecca Long-Bailey announcing National Grid nationalisation plans
Image credit: YouTube screengrab

In just one week Labour have taken their ambitions on tackling the climate crisis to the next level. Bringing Energy Home, a new report outlining Labour’s proposal for publicly owned energy networks, makes the case to bring these networks (the grid) back into public ownership. Through a National Energy Agency, Labour will replace existing private monopolies with publicly owned, democratic and locally devolved institutions that are modern and transparent.

A green industrial revolution for justice

As part of its ‘green industrial revolution’ to create 400,000 green jobs while tackling climate change, Labour also pledged to fit solar panels on 1.75m homes. The priority will be social housing and low-income homes to reduce energy bills. 750,000 homes will be able to take advantage of interest-free loans or grants to have panels fitted.

The new policies herald Labour’s preparations to develop a radical plan to deliver on its promises to decarbonise the economy. The party is moving beyond headline ambitions and saying the right thing by substantiating those principles. Their plans are presented explicitly in opposition to the private firms which are ripping off consumers and have failed to shepherd a just energy transition.

Labour is promising a justice-oriented plan including cheap energy, local and democratic control, and good green jobs. An approach to climate based on tackling the crisis together while improving livelihoods rather than preaching what we must give up is a captivating one. Labour will quickly become the natural party of climate justice in the UK.

No compensation for nationalised companies

We must not let this optimism turn into naive complacency though. Labour’s just transition plan for the many not the few is popular, but “the few” are powerful. The BBC’s comical reporting of Labour’s announcement led with the (since revised) headline: ‘National Grid attacks Labour’s energy plans’. To the surprise of literally nobody, the private companies enjoying a profitable monopoly don’t want to be nationalised.

In an interview with Sky News, Rebecca Long-Bailey, Labour’s Shadow Secretary of State for Business, Energy & Industrial Strategy, left open the possibility of low compensation for nationalised companies. She made it clear that Parliament would determine the price at the time. This will be contingent on the state of the infrastructure inherited, the profits enjoyed by the companies and the subsidies they have received.

John McDonnell has repeatedly assured voters that nationalising such assets will be cost-neutral. Even if there is an initial cash outlay, the value of the acquired asset remains on the balance sheet. Any revenue from owning the asset could be reinvested into upkeep or bringing down prices. No dividends go to shareholders.

The debate around how much compensation to give nationalised companies like National Grid therefore is not an economic one. It’s a moral one. These companies do not deserve compensation. They have already stolen so much of what should be shared wealth in profits. They have systematically failed to transition our economy to renewables. We could spend up to £100m on a Green New Deal rather than appeasing those who’ve got us into this mess.

The battle against capital

The industry certainly won’t go down without a fight. The Times reported that Labour could face legal challenges from the companies if they attempted to nationalise them for less than market value. In the media, the slander will continue.

Dan Neidle, a partner at law firm Clifford Chance, couldn’t help but compare Labour’s plans to scary socialist regime du jour Venezuela. John Pettigrew, speaking from his impartial position as Chief Executive of the FTSE 100 Utility Group, showed his age while selflessly warning the public that “a replacement system of national, regional and municipal energy agencies would return Britain to Yes, Minister levels of bureaucracy.” Retro.

Comical incompetence of British capital aside, these plans will need to be defended when implemented. Companies will throw everything they have at undermining Labour’s most radical ambitions. Even if it means frying the planet.

The emergence of Corbynism 2.0 – a wave of grassroots Labour groups pushing the party further on radical policy, backed by Momentum – offers hope. By pushing the envelope, Labour’s leadership enjoys the leverage of pointing to an active membership and voter-base demanding radical action. If capital does misbehave, we need to be ready to discipline it on the streets and in our workplaces.