Steve Score and Alex Gillham, Leicester Socialist Party
The climate crisis is worsening, and measures to tackle it both in Britain and internationally are failing to reach targets. At the same time, the energy price crisis has massively hiked up the cost of living for millions.
The 2016 Paris Agreement, signed by 196 nations, outlined that global greenhouse gas emissions must decline by 43% by 2030 to limit catastrophic global warming. In response to an escalating crisis, Labour has promised “zero-carbon electricity” by 2030 in its “change” manifesto, under the headline “Make Britain a clean energy superpower”.
The manifesto promises to cut bills, achieve energy independence, create 650,000 new high-quality jobs in the green energy sector, enable warmer homes to slash fuel poverty and force water companies to clean up rivers.
Already, less than 100 days into the Labour government, energy companies have been given permission to raise our bills and more than 2,000 jobs have been cut at Tata Steel in Port Talbot, cynically using climate as a cover for offshoring steel production. More jobs are under threat at Scunthorpe steelworks, and at the Grangemouth petrochemical plant in Scotland too.
Energy profits
One of the key planks of Labour’s plan is to set up a new public energy company, Great British Energy, which will focus on clean energy generation. Created to invest in solar, wind and hydropower technology, Labour is promising an £8.3 billion investment over five years for the project. It will in fact be tiny (£1.66 billion a year) compared to the overall size of the industry.
UK Energy, the trade association for the UK energy industry, says £149 billion in economic activity annually is generated through the energy sector and supply chain. BP alone made £11 billion in profit in 2023. It made double that at the height of the energy crisis in 2022. Shell made £22.3 billion in 2023. Those profits and the oil giants’ huge capital largely untouched, GB Energy is definitely not nationalisation of the energy industry!
Narratives woven by both the then Tory government and the mainstream capitalist media blamed the energy crisis squarely on the Ukraine-Russia war which broke out in February 2022. While the conflict did see an extreme, short-term impact on energy bills with the closing of the Nord Stream pipelines, the cost of heating homes continues to rise two and a half years later, with energy price cap increases in October 2024 and expected in January 2025. At the same time, Labour is taking away heating allowance from pensioners, other than those on pension credit.
The truth is that blame for the long-term energy crisis does not fall totally at Putin’s feet. Both the Tory and now Labour governments are avoiding the blame for their reliance on the failing private sector for energy. A lack of regulation around the energy market has led to outrageous price gouging, which has seen a total lack of government intervention. Over 6 million households in the UK now live in fuel poverty, where workers and pensioners must make the devastating decision to ‘heat or eat’.
Great British Energy
Prior to the manifesto, Labour had promised a £28 billion investment into a “green prosperity plan”. They later reneged on this, apparently not wanting to look like they were somehow going on a spending spree. The promised amount of state funding into GB Energy is a fraction of the original pledge. Government spending restrictions are being prioritised over clean energy, better air quality and lower bills.
55% of Brits are in favour of energy renationalisation, according to a 2022 YouGov survey, only 10% are in favour of a private energy sector. With Jeremy Corbyn as leader, Labour had pledged to renationalise the big-six energy suppliers and the National Grid. Those policies were promptly ditched under Starmer to be replaced by “partnership between the public and private sectors” in the form of GB Energy, which will compete alongside private energy providers.
Labour will also create a new £7.3 billion ‘National Wealth Fund’, which will aim to encourage private investment in green projects. This was announced with the vague expectation that they will get £3 of private money for every £1 of state investment.
Chancellor Rachel Reeves is quoted as saying that the fund would act as a “concierge service for investors and businesses that want to invest in Britain”. This is meant to be directed to ports, gigafactories (industrial units using renewable electricity), steel and hydrogen.
There is in fact already a similar institution brought into existence by the Tories called the UK Infrastructure Bank that was meant to “tackle climate change and support regional and local economic growth”. Given the low levels of private investment that exist, lower than in any other G7 country as a percentage of GDP, how is that investment going to start flowing?
Labour has also added, to much fanfare, a pledged £21.7 billion planned investment in carbon capture and storage technology (CCS), something big fossil fuel companies have been lobbying for. This is still a modest sum in relation to the levels of investment in green energy needed, and even more modest when considered that this is spread over 20 years. The last Tory government had promised £20 billion in March 2023.
The planned CCS investment is really an acknowledgment that carbon generating electricity production will continue, only that the new, not very widely tested technology will pump CO2 emissions into empty oil and gas wells under the North Sea rather than the atmosphere.
Investment
In the run-up to the budget, there has been speculation that the government will rewrite the fiscal rules, which it enthusiastically adopted from the Tories. Not in terms of day-to-day spending on services, which they still plan to cut, but in terms of long-term capital investment. In the face of government debt now at 100% of GDP – the highest level since the 1960s – they may use accounting sleight of hand, such as moving the National Wealth Fund and GB Energy off the government books, or excluding the Bank of England’s losses over its reversal of quantitative easing. Either way, on the basis of the government’s approach, there still will not be sufficient investment to solve the environmental crisis.
The scale of investment needed to combat climate change is huge, with vast investment in solar, wind, geothermal and hydropower required. Not only is green energy cleaner, but also much cheaper, so companies have little incentive to invest in green energy for profit.
Only a socialist programme can provide a real transition to green energy that would slow the devastation of climate change. It would start with nationalisation of the entire energy industry under democratic workers’ control and should include the producers, suppliers and distribution, such as the National Grid. This nationalisation has to be without compensation to the main super-rich owners, but with compensation only on the basis of proven need to small shareholders.
The existing wealth the current super-rich industry owners have amassed over many years of price gouging could be used to both hold down prices and invest in a rapid transition to carbon-free energy that both safeguards and creates new jobs within the sector. But it would need to go further and take the key industries out of private hands to prioritise environmentally sound methods, and allow planning to be democratically controlled by the working class as a whole.
Transport and housing
Transport is also only vaguely alluded to in the energy section of the Labour manifesto despite being a huge factor in a green energy transition. Road travel accounts for 91% of all domestic transport emissions. Huge, centrally planned investment would be required to upgrade and build rail travel, alongside a real renationalisation of the railways.
Bus travel is also a key factor in public transport, and a massively expanded, free-to-use electric bus network is needed to help us rely less on cars for transport. Again, this requires the full renationalisation of public transport.
Not only is a huge house building programme needed, but construction must be done with sustainability in mind. The private construction sector is currently shockingly wasteful, generating 62% of total UK waste. This can be tackled by focusing on ‘deconstruction’ methods which salvage valuable materials from demolished builds, a focus on low-carbon building materials, and worker-led project planning that doesn’t focus on for-profit cost-cutting and creates high-quality social housing built to last, and to the maximum environmental and safety standards.
Green jobs
One key issue of contention, particularly with the trade unions, is that of jobs. For example, Labour has said that it would not issue new licences for exploration of more oil and gas reserves in the North Sea, although it will maintain existing licences.
Sharon Graham, general secretary of Unite the Union, compares what might happen in communities dependant on North Sea oil and gas jobs to what happened to mining communities after the mass closure of coal mines in the 1980s. She says: “You cannot offset people’s concerns with some vague reference to job creation”. Many workers will not trust the government’s promises of future green jobs. Unite calls for “no ban without a plan”.
What is needed is a cast-iron guarantee of alternative jobs for anyone whose job disappears because of the shift to renewable energy and a green economy, and jobs that are at least on the same terms and conditions as now. But that can only be guaranteed by public ownership. The parallel exists now with Tata Steel, which is shifting its steel production away from the UK using the guise of a ‘green transition’. The alternative proposals of Unite have been rejected by a company only interested in profit. That’s why the Socialist Party has called for nationalisation to preserve jobs while carrying out that transition.
Who pays?
Many workers fear that the cost of green policies in general will be billed to them, with some justification. For example, the various schemes to charge car users introduced in many areas, supposedly to discourage car use, but more as a fundraising exercise. At the same time, public transport is in crisis and faces cuts.
When energy prices are rising, everyone has been aware of vast profits being made by energy suppliers. While control of these things is in the hands of those big companies, it’s no wonder many don’t believe they wouldn’t end up shouldering the cost.
Unprepared to seriously challenge the oil and gas giants’ profits and domination over the energy industry, Labour will not be able to meet its climate pledges, themselves insufficient to stop and reverse catastrophic climate change.
In Britain, and on an international basis, capitalism is incapable of successfully dealing with the climate crisis, because competing companies and nation states will always put short-term profits ahead of the long-term needs of society and the climate. The fight to oppose climate change cannot be separated from the fight for socialist change.