Two leading energy firms have quietly moved ownership of their UK operations overseas as part of a pre-emptive move to protect themselves from Labour’s planned nationalisation of the sector.
National Grid and SEE, which together own Britain’s entire gas and electricity transmission spine, have opened offshore holding companies in Hong Kong, Luxembourg, and Switzerland.
All three countries have “bilateral investment treaties” with the UK, ensuring investors are paid properly in the event of any state asset grab.
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The Sunday Times says the moves “are designed to build defences against Labour’s sweeping renationalisation plans” set out in its manifesto last week.
Energy, rail, mail, water and broadband would all be brought back under public ownership under a Labour government, a move the newspaper adds “would hammer investors, including pension, insurance and sovereign wealth funds, which have prized the utility giants for their dependable and inflation-linked returns”.
The BBC reports that a new energy industry lobby group has been established to combat Labour’s claims that nationalistion would be cost neutral, help decarbonise the economy and create jobs. The lobby group has by running ads on Facebook warning of the potential costs.
Earlier this month, SEE chief executive Alistair Phillips-Davies warned Labour’s plans would be hugely disruptive for the industry and could risk the UK’s position as a leader in offshore wind.
Reuters reports that “Britain is the world’s largest offshore wind market accounting for 40% of global capacity and plans to generate a third of its electricity from the technology by 2030 in a bid to achieve net zero carbon emissions by 2050”.
“The best people to achieve net zero are the private companies that are currently performing and delivering well,” Phillips-Davies said.
While the odds of Labour forming the next government remain low, it appears energy firms are taking the threat it poses seriously by moving operations offshore in what SEE called an “additional safeguard”.
Both National Grid and SEE, which collectively have a market value of around £45bn, have said this would not stop a government taking control of their operations, but that it would instead protect shareholders.
In response, Labour said in a statement that the “rip-off” move “illustrates just why we need the grid back in public hands”.
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