Britain's opposition Labour Party is planning to bring the country's major energy suppliers into public ownership, targeting some of Europe's largest utilities and widening a previous proposal to nationalize energy network companies.
During the party's annual conference in Brighton on Sept. 24, delegates voted to extend Labour's nationalization plan to the so-called "Big Six" suppliers, which capture more than three-quarters of the U.K.'s retail gas and electricity market.
Four of the supply companies are owned by Centrica PLC, Iberdrola SA, Electricité de France SA and SSE PLC, and two of them are now owned by Germany's E.ON SE after the utility completed a complex asset swap with rival RWE AG. SSE earlier this month struck a deal to sell its British retail business to a smaller rival, Ovo Group Ltd, for £500 million.
As part of the motion, brought by grassroots campaign Labour for a Green New Deal, the party also adopted a goal to aim for net-zero emissions by 2030, which is significantly higher than a 2050 net-zero target adopted by the Conservative government in June.
The plan would be the most stringent environmental policy of any G20 economy, according to the Financial Times, which also reported that delegates fought off an attempt by trade unions to block the deal because of its potential economic impact. It said
Prime Minister Boris Johnson's Conservative government faced another blow on Sept. 24, when the U.K. Supreme Court declared his decision to suspend Parliament at the end of August as unlawful. The ruling dims the chances of a no-deal Brexit and amplified calls from the opposition for Johnson to step down.
In May, Labour already unveiled similar plans to nationalize National Grid PLC and other network operators, a plan fiercely opposed by the industry. The proposal, which raises risks for both equity and bond investors, could lead to legal challenges if it came to pass, according to lawyers and company executives.
At its party conference, Labour also announced a plan to build 37 new offshore wind farms by 2030 under majority public ownership, which would see the state take a 51% stake in the assets and funnel a fifth of the profits to coastal communities. Offshore wind farms in the U.K. are currently built by private operators vying for price support in competitive auctions.
