Labour plans state-owned UK clean energy company

Sir Keir Starmer has announced that a Labour government would set up a publicly owned energy group with the ability to invest directly in renewable energy and nuclear projects within the first year of being in power.

In his speech to the party’s annual conference, the Labour leader announced that “Great British Energy” — modelled on European state-owned companies such as EDF of France — would help deliver energy independence for the UK.

“A new company that takes advantage of the opportunities in clean British power and because it’s right for jobs, because it’s right for growth, because it’s right for energy independence from tyrants like [President Vladimir] Putin,” Starmer said.

Starmer has sought to wrest Britain’s main opposition party, which has been out of office for 12 years, towards the centre ground since becoming leader in 2020. His speech, only the second in-person conference address he has given since becoming leader at the height of the pandemic, was well received by party members.

He won cheers from delegates as he promised a partnership with business, praised the Royal family and offered higher levels of home ownership, usually the terrain of the governing Conservative party.

He was also applauded when he insisted that the party is on the brink of power: “As in 1945, 1964, 1997, this is a Labour moment,” he said. “We need to be prepared, disciplined, focused. Spend each day working to earn the trust of the British people.”

Starmer, who chose “a fairer, greener future” as the conference slogan, promised that as prime minister he would allocate £8bn for co-investments in private sector energy projects in the UK. The seed funding for GB Energy would come from this fund.

The state-owned company would build or co-invest in low-carbon projects such as floating offshore wind, hydrogen, tidal or nuclear power. In the past 12 years Britain’s privately led nuclear programme has been hamstrung by delays, cost overruns and the withdrawal of several overseas companies.

Starmer used his speech to condemn the ruling Conservative administration, which has sent sterling crashing since it announced its tax-cutting “mini-Budget” on Friday, raising the threat of a jump in mortgage rates.

“They used to lecture us about fixing the roof when the sun was shining,” he said. “But take a look around Britain. They haven’t just failed to fix the roof. They’ve ripped out the foundations, smashed through the windows and now they’ve blown the doors off for good measure.”

The previous evening a YouGov opinion poll put Labour 17 points ahead of the Conservatives in the party’s biggest lead for two decades, prompting jubilation in the party.

But the sense of excitement was tempered by unease that the party has not yet sealed the deal with the electorate. Senior Labour MPs believe the poll lead could merely reflect public dissatisfaction with the Tories after a series of scandals, a change of leadership and the recent market turmoil.

“People aren’t saying that just because they’ve gone off the Tories they now love us,” said one shadow cabinet member. “It feels like we are winning back some of the voters who left us in 2019. It’s harder work persuading those who left in 2017, 2015 or 2010.”

MPs complain that Starmer struggled to get traction while the government grappled with the Covid-19 pandemic and the war in Ukraine. One senior party figure said the party leader had a “wooden and monochrome” personality.

Yet Starmer’s supporters argue that there is a path to electoral victory for uncharismatic political leaders if they have the right values, citing examples such as Anthony Albanese in Australia or Olaf Scholz in Germany.

For much of the past two years Starmer has been working on “detoxifying” the party after its four-year spell under hard-left leader Jeremy Corbyn. He has promised fiscal probity and tried to sound patriotic. On Sunday he led conference delegates in singing “God Save The King”, which was seen as a pivotal moment by the leadership.

On Tuesday the Labour leader was cheered when he used his speech to declare solidarity with Ukraine against Russian aggression. He also said support for Nato, the western military alliance, which had been opposed by Corbyn, was “non-negotiable”.

There was controversy on the fringes of the conference when Labour MP Rupa Huq was suspended from the parliamentary party pending an investigation after describing Kwasi Kwarteng, the chancellor as “superficially” black. She later described her comments as “ill-judged” and said she had “wholeheartedly” apologised.

Starmer’s next challenge is capturing the attention of the public.

A poll by Savanta ComRes on Tuesday found that while 48 per cent thought Labour had responded well to the rising cost of living, compared to 28 per cent for the Conservatives, only 35 per cent thought the opposition party had produced “clear policy ideas”, while 46 per cent thought it had not.

Starmer sees the pursuit by new prime minister Liz Truss of a rightwing agenda of deregulation and tax cuts for the wealthy as the start of a genuine ideological battle between the parties. “We feel like there is clear blue water between the two sides now,” said one of his aides.

For now Starmer and Truss are polling at similar levels of 37 per cent and 35 per cent, respectively, according to Savanta.

However, the party needs to seize over 120 seats to win a majority in the House of Commons at the next general election. Starmer warned the conference on Tuesday: “Let’s not kid ourselves, the next two years will be tough.”