Union boss warns against Labour nationalisation plans

Labour should expect a “ferocious” opposition rather than a consensus if it pursues a point-scoring approach towards the industry, the head of one of the sector’s leading trades unions has warned.

Mike Clancy, general secretary of Prospect, told an event organised by the non-affiliated union last week that the opposition must ensure that its plans to renationalise the energy sector are “very carefully thought through”.

Referring to shadow chancellor John McDonnell’s proposals to sack utility bosses and cap their replacements’ salaries, he said: “There is an issue with corporate high pay in the UK, but if you adopt a tone to the business community that we are going to even our scores up, expect a ferocious political opposition rather than a consensus.”

“Energy has always been an important talking point, but it has now become a partisan issue, and partisan to a level that consumers will not be well served.”

And Clancy added that while Labour’s suggestion for a national energy agency could be a potential repository for expertise that could take a “long-term view” of issues it also risked sounding like “1970s state planning”.

He called for utility reform plans to take on board the expertise of those working in the industry, like Prospect’s highly-skilled members.

Clancy was backed up by Basil Scarsella, chief executive of UK Power Networks, who called for energy not to become a matter for “political point scoring”.

Pointing to the improvements in reliability and service standards achieved since the industry was privatised, he said: “Let’s be careful that you don’t try and fix something that isn’t broken, because it has served this country brilliantly.”

“Let’s be careful that we don’t destroy something which is admired by the rest of the world

Fintan Slye, director of UK Systems Operator, National Grid said ownership is not the key issue facing the energy sector.

“There is an issue of trust and an obligation on the industry to address that. The levels of innovation and change needed in order to address climate change are best addressed through private sector investment,” added Slye.

Jon Phillips, director of corporate affairs at the Global Infrastructure Investor Association, said that more than 8 million savers in 111 pension funds, more than 50 of which are set up for local government employees, are invested in UK energy assets.

He told the event: “The private sector is able to provide the long-term commitment to invest, government’s role is to make high level policy calls and set the strategy. The regulator’s job is to create the rules that enable the right investment to be made at a fair cost to the consumer.”