Andy Burnham is to announce plans for a publicly owned Great British Grid, marking the first return of state ownership to the electricity networks since their privatisation under Margaret Thatcher 36 years ago.
The new body will be tasked with increasing competition, speeding up connections for businesses and major projects, and helping expand renewable energy across the UK.
Mr Burnham is expected to set out the proposal in his keynote speech at Labour’s conference in Liverpool on Tuesday. His address is also expected to include plans for greater state control of water and housing.
Great British Grid is expected to draw on part of the £4 billion already allocated to Great British Energy, the publicly owned company established under Keir Starmer.
The organisation will work alongside private firms and existing network companies, using public funding to support the construction of additional grid connections. Businesses will also be given the right to build their own connection infrastructure and invite Great British Grid to co-invest, reducing their reliance on network companies.
The plans come amid complaints over delays affecting new buildings and commercial projects seeking to connect to the electricity system. There are also concerns that the networks may struggle to meet rising demand from data centres required to support artificial intelligence.
Mr Burnham will tell Labour members that energy costs should be brought into line with those in other European countries within a decade.
“We have a cost crisis. We all know it. The price of energy is crippling for businesses, and British billpayers pay some of the highest energy costs in Europe,” he is expected to say.
He will add: “We have an energy system where prices are dictated in markets miles away, while families and businesses here shoulder the costs. Once again, the British public has lost control.”
Energy Secretary Miatta Fahnbulleh described the proposal as “another step towards mending the decades of Tory policies which ripped out public control from our energy systems”. She said lower bills for homes and businesses could be achieved through clean power “we can control”.
However, the plans have been criticised by the Conservatives and business campaigners. Andrew Bowie, the shadow energy secretary, said Great British Grid would become “Great British Gridlock” if Labour continued to impose green levies and taxes, which he claimed were holding back the energy system.
Mr Bowie accused Mr Burnham of wanting to nationalise the network to support more subsidised wind farms, saying families would “pay twice over”. He said the Conservatives would instead allow businesses to build gas power stations and grid connections, bid openly for capacity and reduce electricity costs through their proposed Cheap Power Plan.
Sam Richards, chief executive of the pro-growth campaign group Britain Remade, said the Government should focus on local pricing and further planning reform rather than establishing “yet another quango”.
“This is a sideshow. Britain needs more competition and fewer barriers to new energy projects, not more government bureaucracy with a grand name,” he said.
