Utility Week

UTILITY WEEK | 14TH - 20TH SEPTEMBER 2018 | 9 Interview M Ps returned to Westminster last week for a new parliamentary year. But while Brexit may con- tinue to dominate the wider political debate, Labour's public ownership plans are probably causing more headaches in the utility sector. What Labour thinks about energy matters. While the next general election could be another four years off, the uncertainty surrounding Brexit means another snap poll cannot be ruled out. And with Labour running neck and neck in the polls with the Conservatives (despite the furi- ous accusations and counter-accusations over anti-Sem- itism in the party), the opposition has a strong chance of forming the next government. So far, though, Labour has revealed few details about how its public ownership plans will work. In a bid to shed some light on the party's thinking on the UK's rap- idly changing energy system, Utility Week went to South- ampton to talk to the party's energy spokesman, shadow energy minister Alan Whitehead. The former politics professor is having a busy day when we meet in his constituency office in the city, where he has been an MP since 1997, with a visit to the local hospital next on the agenda. Last year's general election manifesto contained a pledge to restore public ownership across a wide swathe of the utilities sector. Alongside the water industry, the distribution networks and the National Grid would all be brought back into public ownership. The mild-mannered Whitehead makes an unlikely advocate for such a radical policy shi, which he insists is "not particularly revolutionary" . Critical analyses of Labour's public ownership plans published so far have itemised the cost of buying back the existing operators' shares. But, clutching a South- ampton FC coffee cup, Whitehead insists these sums have been drastically overestimated. He says the indus- try currently receives government money to smooth the transition to a low-carbon energy system and Labour would simply build up public assets by redeploying these subsidies. "You could argue that capacity payments are effec- tively providing subsidised assets for energy companies, and they will retain those assets," he says. "We are pro- viding private sector companies with basically free assets in order to make a [low-carbon] transition." As to why the matter of ownership is such an issue, Whitehead says: There are elements of particular local and regional distribution that are in the public interest. It is based on the assumption that you shouldn't make a private profit out of something that is essentially a public good. "It may look like a lot of money but it's actually money that would need to be spent anyway." For an example of how such arrangements work abroad, the 68-year-old points to Denmark. He vis- ited the Scandinavian country recently with former MP Alan Simpson, who is advising shadow chancellor John McDonnell on energy and environmental issues. Public ownership certainly doesn't mean a mass buy- back of existing energy generation kit, much of which Whitehead insists is reaching the end of its natural life. "Public ownership does not mean recreating the CEGB [Central Electricity Generation Board] with five large gen- erators. That would not only be a nonproductive way of going about it, it would be quite counterproductive. "You would have bought for the public a load of assets that are about to go out of commission anyway. That's off the agenda." Drilling down to a local level, he sees scope for the new breed of council-owned energy companies to widen their remit beyond energy supply to more vertically inte- grated arrangements, embracing distribution, transmis- sion and potentially even generation. Changing the time-limited nature of licensing

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