U.K. Labour Says Legislation Is Ready to Nationalize Utilities

LONDON (Capital Markets in Africa) – The U.K.’s opposition Labour Party said it’s already drafted laws to nationalize water and energy utilities as the prospect of a general election looms.

Taking control of energy transmission and distribution networks as well as water companies will help bring down bills for consumers and allow the government to pursue a strategy to curb greenhouse gas emissions, Rebecca Long-Bailey, the party’s business spokeswoman, said on Sunday.

“We’ve got the legislation ready; we know how we’re going to set up these new bodies,” Long-Bailey said at a panel discussion on the fringes of the annual Labour Party conference in Brighton, southeast England.

The comments suggest Labour will be ready to drive the policy forward in the early days of any new administration it forms. While the party has said the policy won’t cost taxpayers any money, the Centre for Policy Studies, a right-wing think-tank, last year estimated the cost of buying National Grid Plc and other energy distribution networks at 55 billion pounds ($69 billion), with water utilities carrying a price tag as high as 100 billion pounds.

Labour’s finance spokesman, John McDonnell has said the party will compensate equity investors with bonds issued by the U.K. Treasury at a value decided by the Parliament.

A general election isn’t due until 2022, but Prime Minister Boris Johnson says he wants a vote as soon as possible. While Labour joined with other opposition parties to block an election earlier this month, the party says it will back one once it’s prevented Johnson from crashing Britain out of the European Union without a deal on Oct. 31.

Long-Bailey said Labour’s nationalization plans will include:

• The creation of a new National Energy Agency “on the existing institutional base of the National Grid”
• The formation of 14 new regional energy agencies “on the footprint of the existing distribution networks”
• Those new energy agencies will be tasked with ensuring the U.K. meets its carbon-reduction targets, including setting up charging points for electric vehicles
• There will also be the opportunity for local authorities to run energy networks, as well as for communities to run small street-scale programs
• Existing water companies will be acquired through a new act of Parliament that nationalizes the companies and creates regional water authorities

“We’re going to turn off the taps siphoning off billions of pounds into shareholders’ pockets and we’re going to take back control of these vital services,” Long-Bailey said.

Source: Bloomberg Business News