Labour on Nationalisation

As the Labour leadership face growing questions about the party’s stance on nationalisation, Jess Tait lays out how the party could navigate the issue. 

Back in February 2020, as more people in the UK started to complain of a raging flu that maybe had something to do with that illness from China, the Labour Party leadership election was underway. The contest succeeded Corbyn’s announcement that he would stand down as leader following the Party’s dismal defeat at the general election in December, and Labour focused its efforts on voting for someone who could accelerate the party away from its divided era. 

Among the candidates stood Keir Starmer. The favourite from the beginning, Starmer scooped up 56.2 percent of the vote and claimed leadership. His campaign clearly worked, underpinned by his socialist Ten Pledges; these included economic, social, and climate justice, strengthening workers’ rights and trade unions and, importantly, common ownership of rail, mail, energy and water. His slogan stood proudly as “another future is possible”.

Fast forward to today, past the chaos of Covid-19 and Russia’s invasion of Ukraine, the UK is in a cost-of-living and energy crisis. Food and fuel poverty has more than tripled in a year, households are increasingly concerned for the winter, and the cap on gas and electricity is set to increase again from £1,971 to £3,500. Not quite yet “another future”, but certainly a future.

To add insult to injury, energy companies are seeing immense success; Shell has just announced record profits of nearly £9.5 billion for its second quarter in a row, and BP has revealed tripling profits to almost £7 billion. No cut to energy prices for struggling consumers, but shareholders are no doubt happy. 

Against this backdrop, after a flurry of slightly confusing statements and clarifications, Labour have officially announced that they are no longer committed to nationalising neither water nor energy. This was first mentioned by Rachel Reeves during the Labour Party conference in September, who said that now is not the time for nationalisation. In the same month, when asked by Andrew Marr whether Labour would nationalise The Big Six, Keir Starmer responded with a no - followed by an attempt to describe how common ownership isn’t the same as nationalisation, despite that being the assumption under his Ten Pledges for which he was voted leader.

At the end of last month, confirmation of this policy manoeuvre arrived. During an interview for BBC Radio 4’s Today programme, the shadow chancellor stated that nationalisation policies do not align with Labour’s new fiscal rules on public spending. Starmer agreed, arguing that his stance on nationalisation has reset given the country’s “changing” (a rather more positive version of the otherwise-apt “worsening”) financial situation and debt. 

For Labour, the focus now is on having a clean slate and Starmer has said that the energy solution lies in market regulation, not public ownership. 

Of course, changing party policy owing to the situation of a country, particularly one which has seen so much occur since February 2020, is understandable. And it’s not new for policies to change. Reeves and Starmer have spoken on wanting to do what works, not what follows possibly outdated principles – pragmatism over ideology is the official party phrasing. But to ensure continued confidence, Labour must explain why this changed position is in fact pragmatic, and best for the country, given the rising fuel poverty and extortionate profits of energy companies. 

And, given the reaction to the divergence from common ownership commitments, it seems they are yet to do this. Andrew Fisher, Labour’s director of policy under Corbyn’s leadership, recently branded the Shadow Chancellor as economically illiterate for this move. Less aggressively, Labour MPs Diane Abbott and Richard Burgon have spoken on their support of nationalisation, and both Momentum and the TUC have come out in favour.

In fact, Momentum and the TUC both responded on the same day that Reeves and Starmer confirmed Labour’s stance at the end of last month. Momentum released a series of tweets, assembling against the “untimely retro-Blairite platform” of the Labour Party, showing recent IPSOS Mori figures of public support for nationalisation. They also threw a stab at the support the policy had from Ed Miliband, referencing reports from September which spoke of the Shadow Climate Change Secretary’s frustration after Keir Starmer shut down Labour’s support for energy nationalisation just moments before Miliband was to give a speech on net zero, who had previously expressed the need for public ownership to support a green energy transition.

The TUC framed their response around the need to assist the people of this country, arguing that putting energy companies in public ownership would ensure a reduction in bills for cash-strapped families, as well as a greater investment into energy efficiency. They also detailed how taking the Big Five energy firms into public ownership would cost £2.85 billion, just slightly more than the £2.7 billion the UK government has spent since June last year propping up collapsed private energy companies. 

Going forward, the Labour Party must clearly outline why nationalisation is not in the country’s best interests. They cannot back away from the topic, and they must be transparent. We have all read the headlines of rising fuel poverty and profits for energy companies, and Labour must show that they can provide a solution greater than nationalisation that serves the people of this country. In doing so, they may also find that their relationship with those organisations and trade unions that could prove to be the party’s strongest allies in future elections is far better off. 

Jess Tait is a Politics and Parliamentary Studies student at the University of Leeds, and previously worked as a Parliamentary Aide to a frontbench Labour MP. She also writes for The Gryphon newspaper, for which she is an incoming Features Editor, and is passionate about social mobility, sustainability, and health equality. She tweets at @jesstait01

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