Labour plans to renationalise National Grid as part of 'green industrial revolution' to cut carbon emissions and energy bills

Party also says it would fund solar panels for 1.75 million homes which Jeremy Corbyn says will 'benefit working class people with cheaper energy bills, more rewarding well-paid jobs, and new industries'

Labour has vowed to take the UK’s electricity system into public ownership as part of new plans designed to cut the UK's carbon emissions and slash fuel bills.

Rebecca Long-Bailey, the shadow business secretary, said taking the National Grid out of the hands of private shareholders would help “decarbonise” the economy and end fuel poverty.

Under the proposals, heat and electricity would be treated as a basic human right, and control of the grid handed to new public agencies that would also be tasked with helping to tackle climate change.

The policy was criticised by business groups but Labour said the current system was mainly benefiting shareholders, with more than £13bn paid out in dividends in the last five years. 25 per cent of money paid in energy bills currently goes to network companies, it said.

As part of its plans for a “green industrial revolution”, the party also promised to fund solar panels for almost two million homes. It said it would provide panels for one million social homes, plus another 750,000 properties through a programme of interest-free government loans and grants.

It claimed the move would create 16,900 jobs and reduce CO2 emissions by 7.1 million tons – the equivalent of taking 4 million cars off the road – while cutting bills by an average of £117 a year.

Under the proposal to renationalise the National Grid, the responsibilities of the organisation would be handed to a new National Energy Agency, which would also be ordered to help cut the UK’s carbon emissions to zero by 2050 and ensure that 60 per cent of energy comes from renewable sources by 2030.

It would also oversee investment in energy infrastructure to allow solar, wind and tidal energy generated in more remote parts of the country to be transported across the UK.

Ms Long-Bailey, who will unveil the plans during a visit to Salford with Jeremy Corbyn on Thursday, said: “Climate change represents a risk to our future, but also an opportunity to gather our resources and transform it through a green industrial revolution. That means dramatic, public driven and coordinated action, without which we simply will not be able to tackle climate change.

“So our plans see climate justice and social justice as inseparable. It’s an insult and an injustice to our people and our planet for companies operating the grid to rip customers off, line the pockets of the rich and not invest properly in renewable energy.

“Only by taking the grid into public ownership can we decarbonise the economy at the pace needed to secure the planet for our children and grandchildren while ending the rip off, creating good jobs in local communities and making heating and electricity a human right. That’s why public and collective ownership is a fundamental part of Labour’s green industrial revolution.”

Under Labour's plan, the new National Energy Agency would work alongside 14 new regional energy agencies set up to replace the private companies that currently manage the distribution of electricity. These agencies would have a legal obligation to use less polluting fuels to produce energy and to reduce fuel poverty by ensuring that every household has access to affordable energy. They would also be charged with improving infrastructure for electric vehicles.

Local councils would be allowed to take control of energy distribution from the regional agencies if they wanted to speed up the move away from fossil fuels. Streets, housing estates and small villages would also be encouraged to generate their own energy through renewable sources such as solar panels.

Mr Corbyn said: “In this country, too often people are made to feel like the cost of saving the planet falls on them. Too many think of green measures as just another way for companies or the government to get money out of them, while the rich fly about in private jets and heat their empty mansions.

“Labour’s approach is different. Our green industrial revolution will benefit working class people with cheaper energy bills, more rewarding well-paid jobs, and new industries to revive the parts of our country that have been held back for far too long."

But the Confederation of British Industry (CBI) accused Labour of “revisiting mistakes of the past”. Matthew Fell, its chief UK policy director, said: "As drafted, these proposals amount to hanging a 'closed' sign above the UK, with renationalisation delivering a triple whammy neither citizens nor the country can afford."

He said the plans would cause concern among investors, discourage innovation and threaten improvements in the energy network.

He added: "No-one wants a return to the frequent power cuts that were a feature of nationalised industries of yesteryear. Against the uncertain backdrop of Brexit, the country needs policies focused on powering economic growth in the future, nor revisiting mistakes of the past."

A spokesperson for the National Grid said it was "one of the most reliable networks in the world" and was "at the hard of the decarbonisation agenda".

They said: "Only a few days ago we broke the record for the longest period of time the country has gone without coal generation. We deliver reliability, investment and innovation for just 3 per cent of the average energy bill.

"These proposals for state-ownership of the energy networks would only serve to delay the huge amount of progress and investment that is already helping to make this country a leader in the move to green energy.

"At a time when there is increased urgency to meet the challenges of climate change the last thing that is needed is the enormous distraction, cost and complexity contained in these plans."