British households will each miss out on up to £4,400 over the next two years because the UK does not have a nationalised energy generation company, the Trades Union Congress has said.
The UK’s main trade union body is calling on the government to set up a “public energy champion” that could own low-carbon energy projects from wind and solar to tidal and nuclear power.
In a new analysis seen by the Guardian, the TUC estimates that the government could use excess profits made by this public company to cut bills and insulate homes, improving their energy efficiency.
The TUC argues that if the UK had a state-backed energy generation company akin to France’s EDF, EnBW in Germany or Sweden’s Vattenfall, it would receive between £63bn and £122bn in revenues over the next two years. That is equivalent to between £2,250 and £4,400 a household.
The government has attempted to retrospectively take a cut from the unexpected gains made by energy producers this year. In May the then chancellor, Rishi Sunak, introduced a windfall tax on North Sea oil and gas producers.
However, Liz Truss has resisted calls for a similar levy on low-carbon electricity generators, which have benefited from the surge in the price of gas. Instead, her government is attempting to negotiate new contracts with operators.
The TUC study argues that having a fully privatised energy generation market has left Britons with higher bills and created a dependence on foreign technology, investment and skills.
Its general secretary, Frances O’Grady, said: “Privatisation has led to higher bills and colder homes. We need a fairer, greener approach that stops energy companies using UK families like cash machines.
“French, Swedish and German families benefit from public ownership of electricity – why shouldn’t we? If we set up our own UK public energy champion, we can have lower bills, free home improvements to reduce our energy needs, and a safer climate for future generations.”
The TUC research argues that public ownership of generation firms has allowed European nations to keep down prices, reinvest in communities and deliver on industrial strategy. However, critics may point to the nearly €10bn sum the French government has had to pay to fully nationalise debt-laden EDF.
The study builds on a TUC proposal announced in July to nationalise five of the biggest energy companies to bring down bills. It estimated it would cost £2.85bn to nationalise the big five supply firms – British Gas, E.ON, EDF, Scottish Power and Ovo. Some forecasts estimate the government could spend more than £4bn bailing out Bulb, which collapsed last year.
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The TUC proposals were backed by the Green party. The party’s co-leader Adrian Ramsay said: “It’s important there’s more government ownership across all parts of the energy market so that we can ensure a rapid transition from fossil fuels to renewables and secure our energy needs for the future.
“We do also need to support a diverse range of ownership models for energy generators and suppliers including local community, cooperatives and municipal that are close to the people they serve and can innovate.”
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