The Green Party has laid out its plan to tackle rising energy costs, calling for the nationalisation the UK’s top five energy firms in order to “avoid a catastrophe this winter”.
This would see the UK’s biggest five suppliers – British Gas, E.ON, EDF, Scottish Power and OVO – brought into permanent public ownership
It follows Labour’s £29 million energy plan released earlier this week, which took a different approach to the energy crisis, suggesting the price cap is frozen amongst other tactic.
The Green Party has suggested nationalising these companies could reduce the cost to the average household energy bills by more than £2,000. The latest Cornwall Insight forecasting suggests the Default Tariff Price Cap could hit £3,582 for Q4 2022 and £4,266 for Q1 2023.
Additionally, the political party would look to restore the energy price cap to the level it was at in October 2021 it said. It has calculated this will cost £37 billion.
It states that “closing the loopholes in Sunak’s windfall tax and the higher VAT revenues resulting from higher prices across the rest of the economy could go a long way towards funding this vital policy”.
The windfall tax on oil and gas majors announced in May by then Chancellor Rishi Sunak includes a 80% investment allowance, which the Green Party amongst others have criticised.
“Fixing the price of energy will put huge stress on energy supply companies, which is why we propose bringing the largest into public ownership and offering subsidies to smaller suppliers, especially the renewable energy specialists who have done so much to innovate in recent years,” said Carla Denyer, co-leader of the Green Party.
“By bringing the big five energy retail companies into public ownership, setting the price of energy at an affordable rate and absorbing the global price rises, the government could make sure everybody can afford to get through this cost-of-living crisis.
“At the same time, it will mean this public service will be able to be run in the public interest, instead of in the interest of profit making.”
The Green Party’s plans have been developed using a scheme introduced by TUC who stated that approximately £2.85 billion would be required to nationalise the big five supply firms, slightly more than what the government spent in the £2.2 billion bailout of Bulb.
Nationalisation of the UK’s biggest five energy companies has been met with varying opinions. Some believe nationalising these firms could mitigate the concerns around the rising energy costs whereas others believe it could beset important factors such as decarbonisation.
Nationalisation of the transmission and distribution grids, as well as the Big Six suppliers, formed a central part of Labour’s energy pledges in its 2019 manifesto. This included creating a new UK National Energy Agency that will own and maintain the national grid.
In the manifesto, the party fires at the privatisation of the grid, saying it has been a “disaster for both our planet and our wallets”.
The party pledged that “in public hands, energy and water will be treated as rights rather than commodities, with any surplus reinvested or used to reduce bills”.
Existing distribution network operators would have been replaced with 14 new Regional Energy Agencies, whilst the supply arms of the Big Six energy companies would be brought into public ownership.
Despite this never materialising, rising cost-of-living exasperated by the energy crisis has brought this topic back to the forefront of the political debate, in particular the Conservative leadership contest.