Hung parliament leaves utilities in limbo

Crushing blow to Conservatives as majority government slips from grasp

Energy policy has been plunged into fresh uncertainty following a shock general election result which has delivered the UK’s second hung parliament in seven years.

The Conservatives lost the 17-seat majority the party enjoyed before the general election as the polls tightened during the last fortnight of the general election campaign.

Shortly after voting ended at 22.00 BST on Thursday evening, a joint exit poll conducted by the BBC, ITV and Sky News suggested the incumbent government would not regain enough seats to form a majority government.

Early on Friday morning this was confirmed to be the case.

By 6.00am BST Labour had increased its number of seats to 258 and was forecast to win 262 in total. The turnaround in the party’s fortunes defied near universal predictions that it would suffer an electoral bloodbath at the outset of the general election campaign.

At the same time, the Conservatives’ returned 309 seats, with a predicted 318 to be won overall. The result is a crushing blow to Theresa May’s leadership – she called the election with the intention of significantly increasing the party’s majority in the House of Commons.

Some have speculated that the prime minister will resign, or that the Conservative party will challenge her leadership.

The Scottish Nationalist Party (SNP) which became a powerbroker after its sweeping success in the 2015 election, now looks like a diminished power. It lost over 20 seats, reducing its parliamentary bloc to 34.

Taking it place as kingmaker, the Democratic Unionist Party (DUP) has been identified a a viable ally for a Conservative minority government.

Measures to curb energy bills remain on the cards following promises in both the Labour and Conservative manifestos to crack down on prices and Labour additionally commiting to take back public control of energy and water infrastructure.

The SNP also said that it would press for the “immediate” implementation of curbs on standard variable tariffs.

It is less clear what impact the hung parliament may have on other utility policy interests. However, with having lost her majority, the prime minister has failed to gain a strong mandate for a “hard” Brexit. This could have implications for energy interests such as membership of the internal energy market, the European emissions trading scheme and Euratom.

An alliance with the DUP may also increase the profile of challenges around progress for a single Irish energy market and interconnection for the island of Ireland, a senior industry spokesperson told Utility Week.