Commons Sense

House of Commons · Westminster Hall

Public Ownership of Energy Companies

31 October 2022 · 10 other contributors · 14,502 words

Opened by Martyn Day SNP Linlithgow and East Falkirk

Responding minister: George Freeman

EconomyClimateEnergy

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Martyn Day raised concerns about public ownership of energy companies in Westminster Hall. A government minister responded.

Key points

  • UK is facing a significant energy crisis with inflation exceeding 10% in September.
  • Over 109,000 signatures were collected for a petition highlighting the need for renationalisation of strategic energy assets.
  • Government interventions like the energy bills support scheme and the energy price guarantee have not alleviated consumer concerns over rising energy costs.

Key requests to Government

The lead MP asks the Government to consider renationalising strategic energy assets to ensure a fairer outcome for consumers, arguing that this approach would provide better economic outcomes than current free market interventions. He requests clarity on whether the government believes the market is properly regulated and seeks immediate action to protect those most affected by the energy crisis. The government should consider replacing private UK energy providers with a single publicly owned company to freeze further price increases until at least 2024 and deliver better services for all at cheaper prices. Public ownership could also generate huge revenues for the state, ranging from £63 billion to £122 billion over the next two years.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Martyn Day SNP Linlithgow and East Falkirk

The UK is facing a significant energy crisis due to privatised energy companies, with inflation exceeding 10% in September. The petition received over 109,000 signatures and highlights the need for renationalisation of strategic energy assets as the free market has failed consumers. The situation worsened after Ofgem announced a substantial price cap increase from April and an additional rise from October. Despite government interventions like the energy bills support scheme and the energy price guarantee, these measures have not alleviated consumer concerns over rising costs and access to affordable energy. This winter, more than three quarters of UK households will face fuel poverty. The UK experiences mortality rates of about 32,000 additional deaths in each December to March period compared to the rest of the year, with around 9,700 directly attributable to living in cold homes. Local councils are forced to open warm banks due to extreme energy costs, and many constituents feel let down by the Government's lack of action. Record profits have been made by oil and gas giants while households struggle, leading to public outrage against profiteering.

Other contributors (10)
  • Alan Brown SNP Glasgow North East

    Mr Alan Brown highlighted the failures of the UK Government and the need for a 25-year strategic plan to address energy security. He raised concerns about fuel poverty, which causes approximately 10,000 deaths annually in the UK. He also questioned the ownership of Sizewell C by China General Nuclear and called for an end to prepayment meters. I emphasise the importance of energy resilience and long-duration storage provided by pumped-storage hydro, a technology that already has private investment in place. I urge the Government to negotiate a cap and floor price mechanism for electricity sales.

  • Alan Whitehead Lab Southampton, Test

    Mr. Whitehead congratulated petitioners for bringing forward a petition with over 100,000 signatures calling for public ownership of energy companies. He criticised the current state of high energy bills and profits made by energy companies. He mentioned that Bulb Energy was nationalised at a cost to taxpayers of £3.5 billion and later sold for much less. Mr. Whitehead also questioned the Government's support for making the future system operator public sector and asked when an energy Bill would return to Parliament. He suggested creating a publicly owned company for planning and managing the new energy system, citing examples from other European countries. I challenge the Minister's interpretation of Opposition statements, clarifying that the aim is not nationalisation but a different approach to attract private sector investment. I also express frustration with the Minister's responses.

  • David Anderson Con Blaby

    I am concerned that the government is not doing enough to support energy companies. I urge the government to provide more financial assistance to these organisations.

  • Alan Whitehead Lab Southampton Test

    I am concerned about the lack of investment in public ownership and the negative impact on energy security. The privatisation of energy companies has led to increased prices for consumers and a reduction in essential services.

  • Kerry McCarthy Lab Bristol East

    The public should be more involved in owning and managing energy companies, which could lead to better outcomes for consumers and a greener future. We must consider the role of public ownership.

  • Margaret Ferrier SNP Rutherglen and Hamilton West

    In August, the Financial Times estimated that if a buyer was not found for Bulb, the cost to the public purse could have reached £4 billion by spring next year. The hon. Member shares my concern that bailing out privately owned companies in this way could have a catastrophic impact on the public finances, whereas nationalising them could be much cheaper. In September, the then Minister said that nationalisation would not solve high global fossil fuel prices. The hon. Member questions how Ministers can speak with certainty without conducting a full impact assessment.

  • Margaret Greenwood Lab Blackley and Broughton

    Energy is a necessity, yet people are at the mercy of big businesses making profits while individuals face harsh choices. Profits from oil and gas companies have soared to £150 billion this year, but many cannot afford basic needs like heating. Labour proposed a windfall tax in January, which the Government later adopted with restrictions that allowed energy firms significant tax savings for reinvesting in fossil fuel extraction. I am concerned about the climate emergency and question the government's strategy that allows companies to shield 91% of their profits from a windfall tax, which could be invested in fossil fuels. I also highlight the need for investment alignment with net zero targets.

  • Richard Burgon Lab Leeds East

    The speaker highlighted the ideological opposition of the Government to public ownership, despite evidence and public opinion supporting it. He cited a petition signed by over 109,000 people advocating for energy nationalisation. The big six energy suppliers have paid out £47 billion in dividends since 2010, while other countries with publicly owned energy systems have managed to keep prices stable or low during the global crisis. Research indicates that prices are 20% to 30% lower in public ownership systems compared to privatised ones.

  • Sam Tarry Lab Ilford North

    I inquire about the government's willingness to engage with SSE and other operators regarding pumped-storage hydro schemes.

  • Steve Double Con St Austell and Newquay

    In response, I argue that private sector investment is crucial for the advancement of energy infrastructure. The UK's current reliance on public ownership hinders innovation and efficiency.

Government Response

George Freeman

It is a great pleasure to serve under your chairmanship, Mrs Murray. The Government welcomes the public's ability to trigger debates and will respond to their concerns about energy security and strategy. Over 100,000 signatures were collected for the petition. I agree that we need a coherent 25-year plan for UK energy but disagree with nationalisation as the solution. Successive Governments have taken cheap energy for granted without foreseeing the urgency of decarbonising our supply or the geopolitical risks of being dependent on overseas suppliers. I approach this issue with no ideology; I acknowledge past problems with nationalised industries and the lack of innovation. The Government's position is to harness the market through appropriate regulation, not an untrammelled free market. Since privatisation began in the 1980s, our energy sector has attracted around £20 billion a year of private capital investment into infrastructure. This has led to significant progress: electricity cost reduction by 17%, increased investment, improved energy efficiency, reliability, and customer service, reduced power cuts, and massive decarbonisation. The UK economy grew by 76% from 1990 to 2019 while cutting emissions by over 44%. We have led in clean energy expansion. The British energy security strategy aims to secure 480,000 jobs by the end of the 2030s and unlock £100 billion in private investment by 2030 with £30 billion of Government investment. This is a partnership between Government and the private sector. We are committed to diversifying our energy supply through wind, solar, nuclear, hydrogen production, and small modular reactors. We have a comprehensive plan for net zero emissions including support for home-grown energy sources and improving efficiency measures. Nationalisation would not solve these challenges as it would still require international market gas purchases. Regarding winter support, the Government's £37 billion package includes an energy price guarantee saving households about £700 this winter. Additional measures include a discount on wholesale gas and electricity prices for non-domestic consumers. The Government also introduced a 25% surcharge on oil and gas sector profits to raise around £5 billion over the next year. There has been no serious proposal from Labour or SNP about nationalisation's implementation details, costs, funding sources, or global investment impact. Instead of attacking businesses, we should focus on opportunities for Scotland in new renewables, small and large companies developing clean technologies, smart grid development, and digitalisation to create micro-markets.

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