Corporate capitalists are still the biggest winners of Labour’s Great British Energy

The Labour Party has set out its flagship idea for energy in a time of climate crisis. The party opined its strategy to “take back control” of energy bills and ensure energy “independence”. Great British Energy – a new publicly-owned company – is its masterplan for this.

However, the pillar of its green energy transition is little more than a smokescreen for propping up corporate capitalism, dressed up like climate justice.

Great British Energy: Labour’s six pledges

On Thursday 16 May, Keir Starmer unveiled six pledges for the first steps his Labour government would take on election.

Among these, Starmer promised that Labour would set up a new:

home-grown, publicly owned clean energy generation company that will see bills cut for good, boost energy security and create jobs.

Aside from the mildly nationalistic pomp, so far, so good. Ostensibly, the party is, for once, setting itself in direct opposition to the Tories. Where the Tories are hostile to the barest waft of public ownership, the Labour party appears to be stepping up.

It is ditto the case with green energy. Over the course of the last year, the Tories have repeatedly shelved its net zero policies. By contrast, Labour is proposing to invest in renewables, green technology, and home insulation.

So, the positive news is, Labour is genuinely proposing to ramp up renewables and the UK’s green energy capacity. However, tempering any enthusiasm, it plans to do this the bad old fashioned way: that is, through unfettered capitalism – just green this time.

Pandering to the private sector

Predictably then, there’s some glaring issues with Labour’s key green policy.

First up, there’s the fact that Great British Energy is effectively, a severely pared back version of Labour’s original green energy plans. Specifically, in February, the party ditched its pledge for £28bn in annual green investment.

Now, as the Canary’s James Wright pointed out, this ‘bold’ new plan offers less than a third of this – just £8.3bn.

Moreover, it’s a far cry from its earlier promise to renationalise a raft of public services. Previously, it had included bringing energy, rail, mail, and water into public ownership. At the time, many accused the party of rolling over to curry favour with the private sector. In short, it was maintaining the status quo that channels public profit to private shareholders.

Unfortunately, this now looks to be the case for its Great British Energy. For one, as a number of people pointed out on X, it is not actually “publicly owned”:

Starmer’s so-called “Great British Energy” is a typical neoliberal con. It won’t be a publicly-owned energy supplier. It will use public money to build green energy infrastructure that private energy companies will then use to keep ripping us off.

It’s socialism for capitalists. https://t.co/bdlELKwb9d

— Frank Owen’s Legendary Paintbrush🥀🇵🇸🇾🇪 (@OwenPaintbrush) May 16, 2024

For Context:

Labour’s Great British Energy is NOT planned to be an energy supplier for consumers.

It will be a fund in which the government and private investors put money into towards promising green technologies.

It’s basically a publicly backed green hedge fund.

— Alex Tiffin (@RespectIsVital) May 17, 2024

Instead, as the briefing admits, the company will “de-risk” for the private sector:

Its initial priority will be to co-invest in leading edge energy technologies where this can de-risk and unlock private sector investment.

Essentially then, it’s a ruse to funnel public funds into corporate profit-making.

Fossil fuel companies still win

Labour intends to partially fund this – not fully, as one of its MP candidates was erroneously pushing on X – through a windfall tax on oil and gas companies.

Finally, oil and gas companies will lose out and the British public will see energy bills drop? It might not be that simple.

What we do have is a commitment to stop new oil and gas licences. This is of course a really vital step to tackling the climate crisis. However, what we don’t have is a detailed plan for the phase-out of existing oil and gas overall.

In fairness, this isn’t a fully-costed and detailed blueprint for Labour’s green energy plans. It’s a briefing laying out its pledges ahead of this, theoretically. Naturally then, it’s a little light on the details of the how and where. However, what it does spell out is still telling.

In fact, Labour’s document instead says:

Under Labour’s plans, North Sea oil and gas will continue for decades to come.

A tentative nod to the industry not to worry? Well, it wasn’t the only one. Labour featured fossil fuel companies’ favoured so-called climate ‘solution’ – carbon capture and storage (CCS) – heavily in the briefing.

As the Canary previously highlighted during Labour’s conference in October 2023:

Climate site Desmog has also identified that some of the same industry lobbyists were schmoozing attendees at both party conferences. For example, this included the Carbon Capture and Storage Association. The lobbying body boasts bigwigs in the oil and gas industry among its leadership and general membership.

As the Canary has previously pointed out, carbon capture and storage (CCS) is a climate ‘solution’ favoured by fossil fuel companies. This is because CCS lends the industry a lifeline to continue their destructive business-as-usual. It figures that the industry is hedging its bets by sponsoring events at both party conferences.

Moreover, fossil fuel companies could sweep in to steal the spoils for renewables too. Specifically, multinational oil and gas giants have made a show in recent years of diversifying their business operations to greener technologies.

Of course, on the face of it, fossil fuel companies shifting to renewables might seem a good thing. However, given their records on workers, local community rights, and the environment, should these be these be the beneficiaries of Great British Energy’s public-to-private investment pipeline?

Notably, fossil fuel companies have continued their extractive, exploitative business-as-usual in the green energy sector as well.

Who profits?

Ultimately, it matters who Labour’s new green transition plans are for.

The briefing does set out plans for “scaling up municipal and community energy”. However, on closer inspection, it seems to imply that Great British Energy will do this in Scotland and Wales alone – where the shared ownership model already exists.

Alongside this, it plans to develop 20,000 renewable energy projects. These will be a mixture of small to medium scale standalone projects, such as rooftop solar on social housing, as well as large onshore wind and solar farms.

It suggests that:

A proportion of profits from these projects will be distributed back to local communities so they see the benefit of clean power in direct cost of living support – for example, through discounts on energy bills. In the medium-term, local authorities could use the revenue generated by these assets in their local economies.

Of course, this is laudable – but what dent this will actually make in energy bills yet remains to be seen.

On top of this, the lion’s share of profits still end up in the pockets of energy suppliers and generation companies – not communities.

Labour’s has said its clean power plan – with Great British Energy as its focal point – will slash household bills by £1,400 a year by 2030. However, it’s short-shrift for people facing staggering energy bills now.

Great British Energy: corporate capitalism writ large

Overall, Labour’s vision for the future of UK energy actually bothers to map out a plan for a green transition. However, the fact that this is a win says more about the astoundingly dire policies of the Tories.

Sure, there are some positive green steps. Nevertheless, old capitalism habits die hard – and the case of Great British Energy is no exception to this. When push comes to shove, Labour is finding new, more publicly-palatable ways to funnel money from the public purse into the pockets of corporate capitalists.

One thing’s for certain: it’s a far cry from the full-scale nationalised energy sector the public needs.

Feature image via Youtube – the Times and Sunday Times