Miliband defends Labour move to drop energy nationalisation

It would not be “right” for an incoming Labour government to use scarce resources to nationalise existing energy companies, Ed Miliband has said.

At a Labour meeting on climate change in north London last week, the shadow secretary of state for energy and net zero championed the party’s plan to set up a new, state-owned generation company.

He said Great British Energy (GBE), which was announced by opposition leader Sir Keir Starmer at last year’s annual Labour conference, would invest in new types of low carbon generation, including green hydrogen, tidal power, floating offshore wind and solar.

But Miliband rejected calls from the audience of Labour members to cut bills by bringing existing energy companies back into public ownership, as the party proposed to do at the last general election under Jeremy Corbyn.

Labour has dropped this manifesto commitment but tensions have been reported between Starmer and his predecessor as opposition leader over public ownership.

Miliband said: “We could choose to buy up all the existing energy generating assets, but that will cost us tens billions of pounds: that’s money not going into to home insulation.”

Noting that in a “world of limited resources” Labour’s £28 billion per annum commitment to green investment is “big”, he said: “There’s a strong case, particularly with natural monopolies, for a public system. But I’m conscious of all the things we have got to do with heat pumps, in industry and in home insulation, that we probably don’t want to spend money buying up old generating assets.”

While noting that there is “definitely a role for certain nationalisations, like the railways, Miliband said: “The right thing to do is not to use scarce resources, unless you absolutely have to because the system won’t work otherwise, to buy up existing assets.”

He also recalled that Margaret Thatcher’s privatisations during her first term as prime minister from 1979 to 1983 had been “few and limited” because they had been proving the concept.

“The idea of a new public-owned energy company is quite a big deal.

“We’ve got to show this to people to make the case for the public realm.”

The ex-energy and climate change secretary also said that the UK has “got to get on with” de-coupling the wholesale electricity market price from that of gas.

And he said the government’s pledge to increase heat pump output to 600,000 per annum by 2028 is “totally pie in the sky” based on existing installation rates of 26,000.