In two months the number of UK households living in “fuel stress” — spending at least 10% of our budget on energy bills — is likely to treble. Yet Keir Starmer’s Labour leadership insists the energy industry that created this mess should carry on as before.
The broadly right-wing Labour, but serious and thoughtful, Resolution Foundation think tank says that when the cap on bills rises in April the proportion of “stressed” households will leap to 27%. (That assumes an increase of around 50%, to something like £2,000 a year. Energy regulator Ofgem will announce the new cap on 7 February.)
Labour has focused heavily on temporarily removing VAT on bills — which would make a pretty small difference and benefit those with the biggest bills, likely to be better off, the most.
The Resolution Foundation is right that part of the answer must be increasing benefits, i.e. the opposite of what the Tories have been doing. It could have added: and wages. The energy crisis should be a wake up call to the labour movement to start fighting seriously for decent pay rises for all.
But to prevent similar crises in future and transform the system, we need to change the whole way the energy industry works — and that means changing its ownership.
On 17 January Starmer reiterated, on LBC radio, that he’s “not in favour of nationalisation”. He also said that in September, on the same day Labour conference voted overwhelmingly to say that the imperative of planning carbon-emission cuts demands “public ownership of energy including energy companies, creating an integrated, democratic system”.
Energy companies have seen their profits fall. Some 30 operating in the UK have gone bust this year. But that comes after years of most companies making big profits — at the expense of people’s household budgets and investment in urgent tasks like tackling carbon emissions.
Public ownership would allow surpluses to go into reducing bills and investing to improve the system — and publicly subsidy when and where necessary to prevent crises.
Labour says it wants investments in renewables (and nuclear) and measures like insulation. It wants a windfall tax on North Sea oil and gas producers, who are benefiting from high prices. That’s fine, and more generally we need taxation of the rich and big business — something Labour avoids.
But as in social care, childcare and many other sectors, the discussion is about public handouts to profit-making private companies. In energy and elsewhere, we need to shift it towards public ownership, and democratic control.
The labour movement should fight for Labour conference’s policy to be put into practice: for full public ownership of energy, alongside urgent measures to defend incomes and household budgets in this crisis.
