Ex-Tory MP: ‘Might as well nationalise energy suppliers’

A lack of differentiation between energy suppliers means that the sector may as well be nationalised, a former Conservative MP and former government energy adviser has said.

Laura Sandys told a fringe event at the Labour Party Conference that the introduction of the price cap had eliminated competition in the sector.

She was speaking after Labour members voted to back the nationalisation of network companies.

“What you’re doing is you’re choosing between different coloured logos and that is probably the choice that you have,” Sandys said.

“It’s highly regulated with no service differentiation. To be frank, you might as well nationalise, because it is one proposition with one offering.”

Sandys, who sat on the government’s recently wound-up energy efficiency task force, also told the New Economics Foundation’s thinktank meeting that the reason customers are currently switching supplier is “not about customer satisfaction. It’s about customer dissatisfaction.”

She argued that energy retailing should be treated less like a commodity, based on how much consumers use, and more like a service that would offer rewards for customers making energy efficiency improvements to their homes.

Underpinning this approach would be a system of block tariffs, offering cheap rates for the first chunk of electricity used, that would then get progressively more expensive as consumption rises.

At another fringe meeting, the author of a study on Labour’s Great British Energy plan said that it had concluded that the opposition’s mooted vehicle should not nationalise the energy sector.

Martin Freer, director of Birmingham University’s Energy Research Institute, questioned the point of “messing around” with the retail market by nationalisation.

“It is a very fragile market, companies are making very little money, margins are paper thin.”

And nationalising the whole energy market, including the networks, would cost around £200 billion, which would be better deployed on new infrastructure, he said: “That (nationalisation) isn’t the right solution.”

Labour’s conference backed a motion, moved by the union Unite, that stated privatisation of “key” national infrastructure has failed and allowed “rampant profiteering from energy firms”.

The motion also expressed concern that “privatised electricity and gas networks are an obstacle to any plan for a negotiated transition to green jobs and a greener economy”, and that Britain is rich enough to afford taking the sector back into public ownership.

The motion demanded that UK energy be brought back into public ownership, starting with the National Grid’s electricity and gas networks.

However Labour’s leadership has said it will ignore the result of the vote and that it will not embark on wholesale nationalisation of energy.