Nationalize energy companies? The proposal of a former British premier in the face of rising prices

With a “guardian” prime minister like Boris Johnson through September and the biggest cost-of-living crisis due to the Russian invasion of Ukraine and Russian oil blackmail, former British Labor Prime Minister Gordon Brown has become the voice of the experience in this deep shock in Britainwhen the energy bill hit £ 4,000 for British households.

Brown calls for “energy companies that cannot offer tariff cuts to foster homes to be nationalized” and asks the paralyzed conservative government to “act now.” For him, this crisis is not unlike the 2009 debacle, when banks were nationalized.

“Energy companies that cannot offer lower bills should temporarily become public property,” said Gordon Brown, in a tough challenge to conservative political leaderswho are fighting for the leadership to become prime minister.

It was the day Chancellor and candidate for premier, Liz Truss, had signaled “a reduction in aid to families”, after she had argued for weeks that taxes had to be lowered to fight the cost of living.

Her opponent, former finance minister and economist Rishi Sunak, accused her of being “unrealistic” and promised a billionaire aid package if she wins the September 5 challenge to be the next Conservative prime minister.

temporary nationalization

In a text for the newspaper GuardianBrown called for the energy price cap in Britain to be lifted and for the government to negotiate new lower prices with businesses, comparing the situation with the 2009 banking crisis in which some banks were temporarily nationalized to protect banks. consumers.

He warned that time was running out to act and that important decisions had to be made within a few days. “Time and the tide are waiting for no one. Not even crises. Holidays are not taken and are not gently turned off, certainly not to satisfy the comfort of a departing prime minister and the whims of two potential successors. “

The intervention of the former Prime Minister e chancellor finance came when Premiership nominee Liss Truss said she never ruled out direct help with energy bills. She would not make any further commitments until her September budget proposal, even though she hinted that she would be willing to cut VAT on invoices.

His leadership rival, Rishi Sunak, said the change showed that Truss made “a serious moral and political mistake about a policy that affects millions of people.”

Negotiating with companies

Writing the next day that annual bills were expected to exceed £ 4,200 in January, Brown said the government should “stop any further cap hikes” and therefore, negotiate separate corporate deals to keep prices downafter reviewing the available profit margins and social taxes.

He said the executive should consider incorporating publicly owned companies that could not meet that requirement, comparing it to what his government did, “as a last resort” in 2009, with banks.

Before taking this step, the government should offer secured loans and equity financing. But “if that fails, then, as a last resort, run your essential services from the public sector until the end of the crisis.”

“Families in 2022 are going to suffer more than in 2008-09. Only bold and decisive action this week will save people from hardship and bring our fractured country back together, “wrote the former head of government, a journalist for BBC Scotland.

“There are two lessons that I learned at the beginning of the great crisis of 2008: never stay behind the curve but anticipate events and get to the root of the problem. And it is not a tax cut now the most pressing priority, but addressing gas and food prices: the causes of current inflation, ”said Gordon Brown.

The developed plan goes far beyond what Labor has done on how to deal with the autumn crisis, even though the party is said to be working on a new political offer.

urgent decisions

Brown pointed out that there were “urgent decisions” that could not “wait until the end of the Conservative leadership race.”

Among them: the cancellation of the energy cap before the official announcement on August 26, the October payment agreement for vulnerable families. The urgent search for new gas supplies and storage, e voluntary power outages like the one in Germany to avoid blackouts.

He said the expense must be paid for by a new “unexpected tax” on oil and gas and a new tax on the high levels of municipal bonuses that he says are driving up wage inflation.

“These measures could raise £ 15 billion,” he said, “enough to give nearly 8 million low-income families just under £ 2,000 each,” he said.

Business Secretary Kwasi Kwarteng will meet with energy suppliers on Wednesday, between divisions on the future of a tax on unexpected profits that Sunak hinted could be extended.

Labor also gave its first hint on how to frame its cost-of-living offer, after attracting some outside criticism for being slow to come up with an alternative plan for the winter crisis while Keir Starmer is on vacation.

Rachel Reeves said Kwarteng should fill in the gaps in the energy gains tax where investment appropriations return more than 90% in tax relief to businesses.

The candidates for premier, at war

Brown’s surgery came when the war of words has intensified between Truss and Sunak over the energy crisis. In a softening of his position, Truss said he would do “whatever it takes to help families in need.”

A move that Sunak’s campaign claimed was a reversal of his earlier comments on the preference of tax cuts over “handouts.”

Truss took a strong stance against an unexpected tax hike. But early Wednesday he gave the first hint of a change of stance on direct subsidies. “That’s not what I said,” he insisted, when asked if he excluded any form of subsidy. “At this stage I will not announce the contents of a budget in the future,” he said during the campaign.

His team later released details on how plans already announced by Truss would help families, including the cancellation of the national insurance hike and a one-year moratorium on the green energy tax. A campaign source said Truss “had been consistently clear” that she would see what else she could do.

But the figures in Truss’s statement highlight how his offer is likely to be dwarfed by the magnitude of the hikes. The suspended tax would save households an average of £ 153 per year on energy bills, and cutting national insurance would save someone on the typical average full-time wage £ 240 per year. Families will also receive £ 400 under existing schemes.

Boris Johnson and the companies

At a meeting on Downing St, Prime Minister Boris Johnson took no further steps after crisis talks with the heads of energy companies. The premier said it was a problem for his successor in office to make “meaningful tax decisions”.

After the meeting, Boris assured that he will continue to urge the energy sector to ease financial pressure on households.

“But he reiterated that it is a decision that his conservative successor must make,” according to a spokesman for the Treasury.

Prime Minister Boris Johnson is under a enormous pressure to apply a package of measures now, which relieves the pressure of the cost of living. He was accused of leading “a zombie government” and “disappeared” on his honeymoon in the mountains of Slovenia when a recession was declared in Britain.

Paris, correspondent

CB