Labour Must Commit to Nationalising the Big Six Energy Companies

by Luke Neal

6 May 2017

In his campaign to be elected Labour party leader, Jeremy Corbyn spoke of taking the ‘Big Six’ energy companies into public ownership. Since then, the idea seems to have been quietly discarded. Now Labour’s pledge on the environment states: “We will ensure a fair transition to a low-carbon economy, and drive the expansion of the green industries and jobs of the future, using our National Investment Bank to invest in public and community-owned renewable energy.”

Expanding investment in renewable energy alone is not enough to address an ecological crisis, and with a general election looming, the Labour party must go much further. If the labour movement is serious about tackling climate change – as it urgently needs to be – it must directly confront the threat of fossil fuels to the planet and its inhabitants by transforming the economic relations which have led us here. In the UK, the first step towards this should be a plan for taking the energy industry into common ownership as part of a wider Labour agenda of wealth and power redistribution.

‘Green investment’ will not make the fossil fuel industry disappear.

Greater state investment in renewable energy will not address the root causes of climate change. As a strategy, ‘green investment’ is limited by the extent to which fossil fuels are embedded in the global economy. States and corporations have obstructed decarbonisation programmes because of the inseparability of fossil fuels and the global accumulation regime. This is no more true than for the UK, a forerunner in industrial capitalist development. Most states are expanding renewable investment slowly in order to uphold the profitability of fossil fuel capital and the system more widely, illustrated by the Tories’ overruling of Lancashire council to allow fracking for shale gas.

The potential solutions to climate change require fundamentally disrupting the advantage of those who hold power in the present economic order. On the one hand, moving away from fossil fuels would mean an unprecedented devaluation of the huge infrastructure which reproduces this advantage; on the other, developing the necessary renewable energy systems has been estimated to cost $20tn. Determined to avoid such losses, and unwilling to contribute on such a scale to the cost of transition, the super-rich instead seem set on pursuing ‘business as usual’ through a world of temperatures increased by 4°C, with some presumably even drawing profits from adaptation projects to counter rising sea levels, and the continuing militarization of the state system.

The political conclusion to draw from this situation is that the transition to renewable energy can only be achieved through measures which actively suppress fossil fuels. Without clear policies confronting the power of polluting industries, Labour and other potential champions of the climate revert to a flawed market logic.

Abolish the energy market.

Labour’s announcement that it would ban fracking in office is a positive move. This decisiveness needs to be extended to a push for the rapid phasing-out of coal, oil and gas based production – starting with public ownership of the Big Six energy companies. Those organisations – British Gas, EDF, E-on, npower, Scottish Power, and SSC – now run over 92% of operations in the UK energy market, having bought out smaller competitors on the National Grid following the privatization of the Central Electricity Generating Board in 1990. Moreover, their profits have increased tenfold since 2007. Nationalisation offers the most systematic way to lower energy prices. It would abolish the rigged market in gas and electricity. In socialist hands, nationalised energy opens up possibilities such as a free basic allowance for heating and power, and with further electrification of the rail network, there is the possibility of free communal transport powered by renewable energy. Most importantly, ending the UK energy market could allow for the development of large scale renewable projects at the expense of the current fossil-fuel dominated system of electricity generation.

Democratise industry to build post-carbon socialism.

Nationalisation alone does not guarantee environmental sustainability – just look at postwar social-democratic Britain. Rather, environmental sustainability requires nationalisation in combination with ecological planning, in the same way the effort to minimise climate change cannot avoid confrontation with for-profit production. As a trade unionist in the UK energy sector has noted, even under a radical Labour government, there are definite limits to what nationalisation could achieve without the democratic participation of the workforce.

Public ownership of energy is a modest starting point for the socialist left in combatting climate change. It is a move which will only succeed as part of a process of escalation, with workers in the energy sector understanding their pivotal agency within an ecological crisis, and fighting for a democratic, bottom-up reorganisation of their industries as part of a transition to a post-carbon state. Alongside political support for this transition from the Labour party, these workers are instrumental in the reorientation of jobs in the sector towards efficiency, insulation, and collectively-run renewables. Against the backdrop of the climate change, the old saying that ‘the cause of labour is the hope of the world’ takes on even greater weight.

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