Leader: the Tories mean business on infrastructure

Chancellor George Osborne means business. There was good news this week for mega-projects, with two aligned announcements. The first, a call for evidence from the National Infrastructure Commission (NIC); the second, the unveiling of the new Infrastructure and Projects Authority. Both bodies will report directly into the Treasury.

A look at the detail reveals Osborne’s priorities. The Treasury has its eye on electricity interconnection and storage, with Lord Adonis’s NIC due to report back on the topic before next year’s Budget. It has called for evidence on the right level of interconnection, barriers to electricity storage – and the small matter of whether the UK needs an independent system operator. The implications are potentially huge, and it looks as though the Treasury will be calling the shots.

While the NIC rules what infrastructure the UK needs, the Infrastructure and Projects Authority will deliver it. The new body, to be born out of the merger of Infrastructure UK and the Major Projects Authority, will bring together government expertise in the financing and delivery of “major economic projects”. Step forward the Thames Tideway Tunnel, and no doubt in due course Hinkley Point C.

Meanwhile, as Utility Week goes to press, energy secretary Amber Rudd is expected to announce a “reset” of the government’s energy policy. The clarity this promises cannot come a moment too soon. Since the Conservatives swept to power this spring, there has been widespread confusion over what their energy policy, and indeed their energy priorities, are. This has not been helped by the sudden withdrawal of various renewables subsidies, creating an atmosphere of anxiety and distrust among industry and investors.

There are also question marks over the role of the Department of Energy and Climate Change (Decc). You could argue that the Treasury is cherry-picking the key decisions for itself. Decc could be further hamstrung by the cull of 200 staff rumoured this week, as the Treasury’s cuts are felt.

The direction of travel on energy policy is clear. Security of supply is top of the trilemma and it seems that the Conservative government is putting affordability at second place, above the third objective of sustainability. This has been on the cards ever since former Labour leader Ed Miliband caught the public mood in 2013 with his pledge to freeze energy prices, if elected.

There’s nothing wrong with pragmatic energy policy – and of course, the sums must add up. But let’s hope that the Conservative government brings the same long-term vision to its energy policy-making as to its infrastructure ambitions.