“Our air is not for sale”. It was these words that earned shadow transport secretary Andrew Smith rapt applause at the 1996 Labour Party conference as he inveighed against the privatisation of air traffic control.
But Britain’s air did turn out to be for sale. Only a year after entering office in 1997, Labour announced that half of National Air Traffic Services would be privatised (despite the opposition of 76 per cent of voters). The move exemplified an era in which the market was regarded as inherently superior to the state. Between 1980 and 1996, the UK accounted for 40 per cent of the total value of all assets privatised across the OECD. Such was Gordon Brown’s aversion to public ownership that he hesitated to nationalise Northern Rock in 2007 even as a bank run threatened economic turmoil.
The state has since been deployed in an emergency fashion – bailing out banks and rail operators when required – but always as an owner of last resort. Rather than shaping markets, it has merely reacted to them.
Until now. “We already have public ownership of energy in this country, by foreign governments,” declared Ed Miliband in the founding statement of Great British Energy. “The policy of this government is that it is time for the British people to also own things again and build things again.”
While the Danish-owned company Ørsted and the Norwegian-owned Equinor own 20.4 per cent and 9.2 per cent of UK offshore wind respectively, UK public entities own just 0.03 per cent (less than the Malaysian government). Miliband’s intent is to change this: our air is not for sale. GB Energy will not, contrary to some suggestions from within Labour itself, simply be an investment vehicle. It will, as the founding legislation states, “develop, own and operate assets”.
Miliband has not got everything he wanted: he lost the political battle over Labour’s £28bn green investment pledge back in February. The government is now committed to only £4.7bn of new investment a year (or £23.7bn across this parliament). As such, the Energy Secretary is harnessing alternative sources of funding. GB Energy’s partnership with the Crown Estate wasn’t only politically savvy – “socialist monarchism” in the philosopher John Milbank’s words – it was also fiscally astute. The Crown Estate, which has a £15.5bn portfolio of land and seabed and returns its profits to the government, has been granted new borrowing powers to help deliver thousands of offshore wind turbines.
But while GB Energy’s initial capitalisation is relatively modest – £8.3bn – the principle of public ownership has been restored to national economic life. This is the culmination of a long advance by the new economy movement, which championed alternative models in the aftermath of the 2008 financial crisis.
Its members are now dotted across Keir Starmer’s government: Miatta Fahnbulleh, the former head of the New Economics Foundation, is now a minister in Miliband’s department; Carys Roberts, the former director of IPPR, has joined the No 10 Policy Unit to lead on climate and energy; Jonty Leibowitz, one of Miliband’s special advisers, championed community ownership at the thinktank CLES. Newly-elected Labour backbenchers include Yuan Yang, the co-founder of Rethinking Economics, and Jeevun Sandher, NEF’s former head of economics.
Far from being a political burden for Labour – as was once thought of public ownership – GB Energy is a political benefit. Few policies enjoy a broader coalition of support: 86 per cent of Labour voters, 56 per cent of Conservatives, 59 per cent of Reform supporters, 77 per cent of Lib Dems and 82 per cent of Greens.
Luke Tryl, the UK director of More In Common (which conducted the polling), told me that GB Energy’s popularity is testament to two major voter concerns: “the greed” of the energy companies and high bills; and energy security in the post-Ukraine world. In focus groups, Tryl would hear variants of “we can’t be dependent on people like that madman [Vladimir Putin] for energy anymore”.
Voters aren’t sympathetic to scattergun nationalisation – recall the fate of Labour’s 2019 free broadband pledge – but Tryl emphasised: “In the UK there isn’t hostility to the state running things… People like the idea that the state can actually do things rather than struggle.”
Yet for Labour there are risks as well as opportunities: people rather like the idea of GB Energy cutting their bills. But will it? Labour’s previous pledge to cut bills by £300 did not feature in the official announcement and No 10 refused to use the figure when pressed. It was left to Starmer himself to insist during the Q&A following his speech: “I stand by everything in my manifesto”.
One frequent retort to GB Energy’s popularity is that voters believe it is an energy supplier rather than an energy generator. There is a radical answer to this question – it could be both (as France’s publicly-owned EDF is). Mathew Lawrence, the director of the think tank Common Wealth, who is close to Miliband, told me that by the end of this parliament, people should be able to “buy energy directly from GB Energy and translate clean power into lower bills. That’s the way to really unleash the political benefits as well as the decarbonisation benefits”.
Labour will need to grapple with such dilemmas but for now it is enjoying the benefits of its interventionist turn. Industries such as energy and railways are more than just services – they are barometers of national health. As the Transport Secretary, Louise Haigh, told me earlier this year when she pledged to renationalise the railways: “What we’ve seen from our research with voters, particularly Tory voters or ex-Tory voters, is that they now see them as a symbol of decline.”
For Starmer, delivering clean power by 2030 is one of the great patriotic missions of his government. In his travels around the UK, he has been struck by the pride felt by clean-energy workers, which for him recalled that of the miners who once “powered a nation”. Deploying a football metaphor, as he often does, he has spoken in private of such workers “pulling on the England shirt” when they go to work.
Great British Energy and Great British Railways are emblems of Starmer’s patriotic social democracy – the brand of politics that strategists believe can defeat Reform. But as with all national teams, success will depend on results.
[See also: The prison system is broken]
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