Whitehead cites ‘overwhelming case’ for networks to be public bodies

The state could take equity stakes in network companies and the costs of green levies should be stripped from electricity bills, Alan Whitehead has said at the Labour conference.

At a fringe meeting about the costs of net zero, held yesterday (29 September), the shadow energy minister was pressed to clarify Labour’s position on the public ownership of energy companies.

In an interview on Sunday, the party’s leader Keir Starmer, said that he would not nationalise the biggest retailers. However, the following day, the party’s conference backed a motion calling for public ownership of energy companies as part of a Green New Deal.

Whitehead told the fringe meeting that a case exists for the state to have a stake in network companies.

“Distribution networks are natural monopolies for which we have to undertake quite complicated strategies for getting the investment to do what they are supposed to do.

“There’s an overwhelming case that they should be essentially public bodies,” Whitehead said, adding that moves to turn the National Grid’s energy service operator into a stand-alone, public body shows that the “ground is already shifting.”

He said that in return for state-supported investment, it is “quite right” that the public purse should retain an “equity share”.

“Rather than putting in place a price grab by the energy sector, we’ve got to look at where public money is going in and how the public should retain that interest in the future.”

Quizzed about whether decarbonisation levies should be transferred to the public purse the shadow energy minister replied “yes, absolutely”.

It is “not right” that customers are continuing to support projects, such as those bankrolled by the Renewable Obligation, he said: “We have levies that are dead levies, the legacy costs of a number of projects that were done and dusted a number of years ago that are still on customers’ bills, which is simply not right.

“We need to understand just how much of the cost of all these things is going back onto the energy consumer.

“One of the things that is going to happen soon is a huge levy coming the way of customers in order to pay for the upfront cost of new nuclear power for the future. Everything is loaded onto the customer in terms of how the energy market is financed and clearly we have to get out of that model.”

Whitehead also blamed the recent spate of supplier failures on what he described as “Wild West decision making” from 2016 that had enabled energy companies to set up offering “rock bottom tariffs” without hedges in places to safeguard against wholesale market price spikes.

In his keynote speech today, Starmer set out his party’s pledge to upgrade the energy efficiency of 19 million homes “within a decade”.

Removing green levies from energy bills is among the key asks of government enshrined in Utility Week’s Energy Reset campaign.