Burnham to unveil public body to invest in electricity grid

Andy Burnham is expected to announce a new government body to invest in Britain's electricity grid in his first party conference speech as Labour leader on Tuesday.

The prime minister will tell party activists in Liverpool that the new publicly owned company, branded Great British Grid, will speed up connections to the grid by driving up competition for connection projects.

Burnham is expected to put the proposals at the heart of a new goal to bring UK energy costs in line with other nations in Europe within ten years.

He will promise to have an "honest conversation" with the public and take on the "difficult issues" that have been ignored for too long.

Burnham is expected to bill the creation of the GB Grid as the first significant move in his ambition to provide greater public control of utilities, which he put at the centre of his pitch for power over the summer.

He is expected to say that faster connections to the electricity grid could help fix a "cost crisis" in energy that has proved "crippling for businesses".

There are a number of reasons for the high energy prices in the UK, part of which comes from state subsidies given to private companies to modernise the grid to accommodate new wind and solar farms and transmit their power to homes and businesses - a cost which ends up being added to the bills of customers.

Full details of the new body are yet to be set out, but Labour said it would invest in and compete for transmission connection projects alongside the three private companies that currently own and manage the grid in Britain.

The party said it would also make it easier for firms waiting to be connected to the grid to finance connection infrastructure themselves, with GB Grid supporting and potentially co-investing in projects alongside them.

Labour has said that funding for the new body will be found within the existing budget of GB Energy, the public green investment company set up by Labour last year and which is now headquartered in Aberdeen.

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The transition of electricity generation from large fossil fuel stations to the more remote locations used for renewables, such as offshore windfarms, will require Britain's ageing transmission grid to undergo extensive rewiring in coming years.

Energy regulator Ofgem has estimated that £70bn of investment is required in the grid between 2025 and 2031, quadrupling the current rate of investment.

But in a report earlier this month, the National Audit Office warned that the number of projects waiting to connect to the grid had grown "significantly" whilst delays to projects were also increasing.

Speaking to BBC Radio 4's Today programme, Matthew Lawrence, founder of the think tank Common Wealth and former adviser to Burnham, said the UK is "unusual in that it has a wholly privatised grid", which had led to "decades of sluggishness development and chronic underinvestment".

He said Tuesday's announcement "seems to have fixed that by bringing in public investment into new parts of the grid".

In his speech on Tuesday afternoon, Burnham is expected to say that GB Grid will "work with the private sector and network companies" to "reform a broken energy market".

He will add: "It will increase competition to drive down costs and speed up delivery so businesses can connect faster and grow quicker.

"This is what more public control can do."

Dhara Vyas, chief executive of Energy UK, said the investment was welcome, but "the bulk of this will be private investment".

"In the next five years the transmission owners, the ones doing that highway of pylons, getting the electricity from source to homes to businesses, they are spending £90bn in the next five years"

Burnham will promise "bold and honest" leadership, saying he will outline policies and commitments that form a "serious prospectus" for Britain and offer people more control over their lives.

He is expected to say that he initially wanted to "give the usual tub-thumping conference speech" but that "the patriot in me tells me something very different is needed".

The prime minister has made "hope" the overall message of the four-day gathering.

It comes ahead of a tricky Budget at the end of next month, where room for manoeuvre has been narrowed by recent rises to the cost of UK borrowing.

Ahead of the speech, the prime minister has promised to reveal details of how he intends to fund his plans to provide free social care services to everyone in England.