In France, where national provider EDF is currently 84% publicly owned, household energy bills rose by just 4% this year.
This is because the French government, as the main EDF shareholder, was able to instruct the firm to cut profits to keep prices down.
If energy retail was publicly owned here in the UK, government would be able to take a similar approach and stop energy bills spiralling to unaffordable levels.
It’s a clear win-win situation. Yet ministers are choosing to ignore it as a viable option.
Based on payments for shares in recent market transactions, nationalising the Big Five energy retail companies (British Gas, E.ON, EDF, Scottish Power and Ovo), would cost £2.85 billion.
By contrast, the government has already spent £2.7 billion over the past year bailing out failed private energy firms, including £2.2 billion for just one firm alone – Bulb.
Taking these five companies into public ownership would move more than 70% of households out of the failed private energy system.
And it would cost only around a quarter of what ministers will spend this year protecting families from the soaring prices charged by private energy retailers.
Even before the current energy price crisis, families were already paying the price of privatisation through higher bills to fund private profits.
Research by Common Wealth shows that UK energy retailers paid shareholders more than £23 billion in the last 10 years. And most of these dividends went overseas to large foreign shareholders.
But it’s not just about reducing todays’ bills, there are longer term implications too. Privatisation has held back energy efficiency home improvements. Energy companies are incentivised to sell more energy to make profits for shareholders – not to invest to cut energy use.
Publicly owned energy companies would give ministers the power to set energy prices, and the burden of paying shareholder dividends would no longer be carried by UK households. This would allow lower bills and more investment in energy efficiency. Ultimately making our homes cheaper to heat and power.
It is time to lift the burden of failed privatisation off families. No more shareholder pay-outs. No more fat cat bonuses. No more take-the money-and run-companies that collapse overnight. Just fair prices from an energy company owned by us all and run for our benefit.
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