Keir Starmer pledges to launch publicly owned energy company

Should Labour win the next election - as current polls suggest - the party will create a publicly owned energy company within its first year in office, Sir Keir Starmer has announced at the party’s annual conference in Liverpool.

The company would be named Great British Energy, and it would be modelled after France's EDF and other firms owned by foreign states operating in the UK, with the goal of taking "advantage of opportunities in clean British power", Starmer said. 

The role of GB Energy will be to provide additional capacity alongside the private sector, to establish the UK as a clean energy superpower and guarantee long-term energy security, the Labour leader said. It was “right for jobs, right for growth and right for energy independence from tyrants like Putin”, Sir Keir said, and promised a new state-owned energy firm to help build a “fairer, greener, more dynamic nation” 

Great British Energy would be set up with public money but would be independently operated and any profits would be reinvested, Labour sources say. The announcement builds on Labour's commitment to make the UK a clean energy superpower by 2030 and create a National Wealth Fund to invest in British industry.

The speech came after days of market uncertainty driven by Chancellor Kwasi Kwarteng's mini-budget, which unveiled the biggest tax cuts in 50 years and resulted in the value of the pound crashing to historic levels, something Sir Keir said the public should "not forgive and not forget".

"They used to lecture us about fixing the roof when the sun was shining," he said. "But take a look around Britain, they haven't just failed to fix the roof, they've ripped out the foundations, smashed through the windows, and now they've blown the doors off for good measure.

“I will never accept that the war is an excuse for how unprepared Britain was to tackle the fallout. The war didn’t ban onshore wind, the war didn’t scrap home insulation, the war didn’t stall British nuclear energy. The Tories did that.”

He added that the Tories had “lost control of the British economy… not for you, not for working people, for tax cuts for the richest 1 per cent in our society. Don’t forget. Don’t forgive. The only way to stop this is with a Labour government.”

According to the Labour Party, GB Energy would start out as a small-scale generator, and build up market share as it invests in new projects, the party says. Labour sources say they see no reason why the company could not eventually grow to establish itself as "a significant, credible generator in a competitive market".

"Labour will make sure that the public money we spend building up British industry spurs on private investment, stimulates growth … and the British people enjoy the returns," Starmer said.

The Labour leader told delegates that at the moment the largest onshore wind farm in Wales was owned by Sweden, energy bills in Swansea were paying for schools and hospitals in Stockholm, the Chinese Communist party had a stake in the UK’s nuclear industry and five million Britons paid their bills to a French-owned energy company.

The party said the announcement of GB Energy builds on its commitment to make the UK a clean energy superpower by 2030 and create a National Wealth Fund (NWF).

Ed Miliband, shadow secretary for climate and net zero, said: “Labour will deliver an energy system for people and planet. Foreign governments own large parts of our energy system, and reap the wealth that flows from it.

“As we implement our clean power plan, it’s time to have our own publicly-owned domestic champion in energy generation, creating wealth and jobs in Britain. Labour will build an energy system for the future, run for the British people.”

The proposal has been celebrated by campaigners and environmentalist organisations such as Greenpeace. 

 “Establishing a UK-owned energy generator has the potential to give homegrown renewables a big boost," said Rebecca Newsom, Greenpeace UK head of politics. “Under a publicly-owned Great British Energy, vital emerging technologies like floating offshore wind and green hydrogen electrolysers could be given the extra support needed as UK supply chains are grown and costs come down.

Cat Hobbs, director of public ownership campaigning group We Own It said, “We’re absolutely delighted about this fantastic announcement. Great British Energy, in public ownership, will invest in renewable energy, tackle climate crisis and bring down bills."

CBI president Brian McBride said: “There is widespread recognition that the energy market needs significant reform and industry will want to get to grips with the detail of Labour’s proposals.

“The UK is not short of renewable generators right now and investment is waiting in the wings, but where Great British Energy could add value is by channelling catalytic public investment to spur innovation and accelerating the delivery of renewable projects.”

Ripple Energy founder and CEO Sarah Merrick added: "The more minds that are focused on getting new wind farms and solar generation built, the better. The green revolution creates a real opportunity to do things differently, not just where we get our power from, but how it is owned.

"We're keen to learn more about how GB Energy's public model can complement consumer-owned models like Ripple's to deliver cleaner, cheaper power across the UK."

In the past, Starmer has resisted calls from trade unions and many on the left of his party to nationalise the energy industry to help keep soaring bills down, arguing instead for an extension of the windfall tax on their profits.

He has already announced plans to make the UK the first major economy to generate all of its electricity without fossil fuels, something he says can can be achieved by 2030 - five years earlier than the government's current target. 

"The road to net-zero is no longer one of stern, austere, self-denial," he said in his speech. "It's at the heart of modern, 21st-century aspiration. Technology has turned everything on its head. Green and growth don't just go together - they're inseparable.

"The future wealth of this country is in our air, in our seas, and in our skies. Britain should harness that wealth and share it with all."

The UK is already dealing with a deepening cost-of-living crisis, with inflation hitting historic levels and predicted to enter double-digit figures. The rising prices of energy bills are the main catalyst for this situation, which could leave as many as 40 per cent of British families facing fuel poverty in the winter.

New Prime Minister Liz Truss has recently announced a plan to address the critical situation.  Under the government’s proposed plans, energy bills will be frozen at £2,500 and businesses will be spared crippling increases until the next general election, scheduled to be held in two years’ time. The measure will replace the existing energy price cap set by regulator Ofgem, which was set to increase to £3,549 come October.