Corbynomics – more than one man’s dream

Jane Gray explores the implications that the rise of a hard left narrative in UK politics might have for the story of utilities.

Win or lose, Jeremy Corbyn’s shock impact on the labour leadership election race has had a profound impact on UK politics. It may yet prove to be a lasting one.

Corbyn’s unabashed calls for the renationalisation of the UK’s rail networks and energy companies have resurrected a left-wing narrative which has been missing from British political for decades.

Some would say it should have stayed buried, not least the other contending candidates for the Labour Party’s leadership. Yvette Cooper has slated Corbyn for coming up with “old solutions to old problems” and Andy Burnham has voiced fears that his policies would take Labour back to the mid-1980s, a time of party factionalism. More broadly, economists have largely criticised his proposals for “people’s quantitative easing” and a national investment bank as being “half baked”.

But in spite of these critics Crobyn is still the bookies favourite to win the Labour leadership and he has recently received a boost in plausibility from a small group of economic experts – including a former member of the Bank of England’s monetary policy committee – who have reassured that his policies, while bold, are not bunk. 

Furthermore, while headlines focus on Corbyn’s sensationalist soundbite about renationalisation, his 10 point energy plan – summarised in Utility Week Lobby (Utility Week 11-17 September) makes no mention of this. Instead it concentrates on the “socialisation” of energy – not only in terms of boosting community energy schemes, but also in terms of giving communities a much stronger role in energy policy making. With utilities striving to place customers back at the core of their strategies, there seems little to fear or argue with in this ambition.

Other elements of Corbyn’s plan may hold some unpalatable implications for specific parts of the energy sector – it’s unlikely he’ll find friend is the nuclear or fracking industries for example, both of which he opposes. Meanwhile, the intention to lay the costs of cleaning up the energy mix at the door of industry, rather than the public, alongside commitment to a more ambitious international climate change target, would likely stack costs on conventional generators, potentially making more important power stations go the way of Eggborough.

Argument over the sense, or lack thereof, in Corbyn’s policies will no doubt rage in the run up to the party leadership decision this weekend. But what is undeniable is that Corbyn has struck a chord with a mass of left-leaners who were left reeling after the devastating defeat of both Labour and the Liberal Democrats in the recent General Election. It’s unsurprising that they have swarmed to a figurehead who appears to be getting back to the basics of the political left.

With their expectations raised, these lefties will put the new Labour party leader, whoever it turns out to be, under pressure to demonstrate their red credentials – or else they will abandon ship, something the Labour party cannot afford. It is therefore not unreasonable to assume that the debate Corbyn has started in this leadership contest could outlive his own tenure in the spotlight.

A strong opposition on the left, or a divided opposition on the left, naturally has implications for the Conservative party too. Already bubbling with tensions between UKIP sympathisers and the Conservative mainstream, the new Labour dynamic poses real potential for more widespread party fragmentation.

In turn, this raises the potential for policy uncertainty and instability, something utilities are particularly susceptible to. With the potential that a Corby could also hail a radical shift in the power of the trade unions, the rise of a strong left-wing narrative in politic is therefore something utility bosses need to keep an eye on and to be ready to interpret for the benefit of shareholders and investors. To dismiss Corbyn’s politics as a flash in the pan, would be foolhardy.