What is GB Energy? Part 2

Following on from last week’s article, piecing together what our new Labour government’s publicly owned company GB Energy actually is, we’re following up with some further questions we have; leading with: will GB Energy require an increase in taxes? 

Will GB Energy require an increase in taxes?

The figures surrounding GB Energy are particularly interesting - Labour suggesting that funding for the publicly owned ‘investment vehicle’ will come from: 

1. Increasing windfall tax on gas & oil companies
2. ‘Responsible borrowing’

Where £1.2 billion of the £8.3 billion required will come from the windfall tax. 

However, last week, Labour’s Rachel Reeves confirmed that our new government will have to raise taxes in this coming October’s budget, after months of insisting they will not raise taxes for working people, which - understandably - has caused some backlash. 

Reeves has gone on to suggest that the reason for this lies in the failures of our previous, Conservative, government who left a £22 billion ‘hole’ in the economy. 

But, if the UK economy is in such dire straits already - £22 billion in debt, in fact - how is ‘responsibly borrowing’ another £6 billion + a good thing? 

Alongside this, the question of whether Labour would raise taxes has been on everyone’s lips for months now, and a question that Labour’s representatives have successfully dodged for a long time; leading to much speculation so, to have a pretty solid confirmation is - at least - a relief.

However, one of the selling points of GB Energy is that it will [aim to] reduce energy bills by £300 per year per household. 

As such, would raising taxes and borrowing more money not cancel out this proposed reduction and, in fact, risk raising the average household’s outgoings or reduce ‘take home’ income after tax? 

Would a raise in taxes be ‘worth it’ in the long run? 

Another side of this is the question of whether, in the long run, raising taxes will actually be ‘worth it’, and something that the public may - in fact - support in exchange for clean energy and a stronger economy in the future? 

Amid an ongoing cost of living crisis - leading to many households across the UK struggling to afford all ongoing bills every month - it's hard to say. But it is an interesting question to ponder; especially as, what happens to the economy and the renewable energy sector here in the UK right now has a direct impact on the wellbeing of the people, the nation and the planet for generations to come; short term sacrifice potentially leading to a lot of long term gain. 

But is it all likely to actually pay off? 

Realistically, however, is there actually enough time for GB Energy and Labour’s ambitious clean energy plans to come into fruition? 

Another question everyone is asking, Labour has just over 5 years to reach their 2030 goals and it’s, again, very hard to say if they will. 

They have a lot of big plans for renewables over the course of the next 5 years and raising taxes in order to support these goals and repair the economy, only to then possibly run out of time, would be extremely disappointing, not only for Labour themselves, but also for the general public who would be paying the price - quite literally - of Labour’s ambitions.

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In short, it’s still too early to say exactly what GB Energy will mean to the average UK taxpayer and what the autumn budget will bring to the table, but it is still important to ask these questions and ponder the possibilities that lie ahead, especially during the early days of this new government. 

It is, of course, great to see discussions around renewables really open up and Labour speak with passion about the milestones they wish to achieve for a zero-carbon Britain. With this, also, it’s encouraging to see Labour already making positive changes to the renewable sector, less than a month into their government. 

But… What’s the cost of a zero-carbon future and will it all be worth it for the average UK household?