Industry must ‘expect the worst’ and act with ‘courage’

Former Conservative MP urges energy sector not to optimistically “overinterpret” manifesto wording

Energy industry participants must move away from “always expecting the best and getting the worst” and start “expecting the worst and hoping for the best” former Conservative MP Laura Sandys has told Utility Week.

Sandys, who acted as parliamentary private secretary to Greg Barker while he was energy minister, added that industry responses to the Conservative manifesto pledge to cap energy prices show leaders are “overinterpreting” its wording.

Following the publication of the manifesto, some industry commentators concluded that a commitment to “maintain the competitive element of the retail energy market” while extending price protections to vulnerable customers, might practically mean that the reach of a Tory price cap would be limited.

But Sandys observed: “If you look at all the facebook advertising they are doing, all the twitter advertising that government’s doing, they are banging on about this price cap. They will have to deliver on it and it can’t just be for a couple of people.”

She added that industry spokespeople who argue that intervention in the energy market is not required because the market is competitive need to think again.

“The sector think they are super competitive, but actually what they mean is, there are lots of competitors. They are talking a numbers game rather than a market game.”

Politically, Sandys – who now runs change and innovation consultancy Challenging Ideas – said this is an important distinction because “the manifesto, and certainly the prime minister, are not about competition being an end in itself. Competition is just a process that delivers a good outcome for consumers.”

Rather than dwell on arguments about the how competitive the current energy industry is, Sandys urged companies to “own” the industry’s future and stop “constantly feeling a victim of the politics”.

“Courage is what is needed,” she said. “The sector must break out of its “waiting to be told” what to do and really embrace new marketing led business models.”

Sandys brushed aside the possibility of a Labour victory in this Thursday’s general election. She did not, however, necessarily believe that Theresa May will return as prime minster with an enhanced majority. 

“If she has a smaller majority, she will have to be even more determined on delivering her manifesto promises,” stated Sandys. 

In this scenario, companies should “accept that the price cap is going to happen, but move the conversation on to the future of energy” and focus on “insipring politicians”.