Ali Cooke, Dorset Socialist Party
The climate crisis is undoubtedly getting worse. And our energy bills keep rising. One of the new Labour government’s aims is to lower energy costs. However, it has recently just raised the energy price cap, with it raising household bills by an average of £149 a year. Another aim is to deal with the climate crisis too.
According to International Renewable Energy Agency, the global cost to fix the climate crisis is $131 trillion by 2050. Given the severity of the crisis and given the necessary funds needed, it would be expected that more would have been done. However, capitalism is incapable of meeting this level of cash injection.
This couldn’t be better illustrated than by Labour’s meagre £8.3 billion pledged investment in Great British Energy over the next five years, a fraction of the £28 billion of green investment that was pledged and is now scrapped, deemed ‘unaffordable’.
The government is quickly moving legislation through parliament to create GB Energy, a new government owned company, but exactly how it will operate is not yet known. We do know that after delegates to the 2023 Labour Party conference voted in favour of energy renationalisation, the Labour leadership responded: “We’re not going to nationalise the energy system.” The Labour leadership is talking much more about ‘derisking’ private-led investment.
Currently the industry uses the Contracts for Difference Scheme (CFD), in which energy providers bid for contracts with a government-owned body. The contracts give energy producers long-term commitments to pay for energy within a fixed price range. In periods of economic instability and uncertainty, high inflation and interest rates, this could mean billions of pounds of subsidies for big business, or simply a refusal to invest. The 2023 CFD auction hit headlines when there were no bids for contracts to build new off shore wind developments.
Compared to the scale of the predatory energy companies like Shell and BP, the government’s promised level of investment is tiny. Instead it hopes it will act as a ‘catalyst’ for private investment. If GB Energy simply takes minority stakes in private development projects, it would not be a decisive decision-making force. And the vast majority of investment would continue to be made on the basis of what’s profitable, not what is needed to protect the environment.
GB Energy will be based in Scotland and its board will be chaired by Jurgen Maier, a former boss of Siemens. The entity will operate just like a capitalist enterprise with the working class being left out of decision making.
Britain has a vast energy infrastructure, much of which used to be in public hands. We need to renationalise the whole industry. As part of a wider socialist planned economy, investments and developments on the scale and speed needed to stop climate change could be drawn up democratically in the interests of the working class, while protecting the environment.
Despite its conference voting in favour and the majority of the public supporting the policy, the Labour government does not have energy renationalisation on the agenda. It’s not surprising that it has opted for such a market approach, it is in-keeping with the approach of the Blairite Labour leadership that cannot fathom anything other than a capitalist future. We need socialist change to stop climate change and make sure that the working class and poor internationally aren’t made to pay the price.
