As political leaders hone their barbs in preparation for the party conferences, Mathew Beech identifies the key policy positions of the three major parties, ahead of these annual agenda-setting events.

These are interesting times for the UK’s three main political parties – and all those observing what they will do next. The Conservatives are unleashed; Labour has been reborn; and the Scottish National Party (SNP) explosion sees us in a very different political landscape to the one we inhabited in May.

Following a brutal few months of cuts to renewables subsidies, a revolution in the Labour Party, and an SNP gearing up for Scottish Parliament elections, utilities are betwixt and between, because clear policy for their sector looks thin on the ground.

With calls for clarity growing from the industry, the conference season presents an opportunity for politicians to provide some answers, although the political gaming is just beginning.

Conservatives unleashed

Having shared power with the Liberal Democrats in the last parliament, the Tories are no longer hamstrung (or reined in, depending on your political viewpoint) by their former coalition partners.

With this new freedom, energy secretary Amber Rudd has wasted no time in getting renewable energy costs under control. She has swung the axe with gusto at the Department of Energy and Climate Change, leaving the solar, wind and biomass industries, in particular, nursing some substantial wounds as she “gets to grips” with the £1.5 billion Levy Control Framework overspend.

Operators in the renewables industry say this has hit investor confidence – and the EY attractiveness index appears to reflect this with the UK falling out of the top ten for the first time. Investors, developers and the industry at large are all calling for clarity and certainty to allow them to plan ahead knowing the rules of the game will not change.

Rudd says cost is key, and more specifically the cost to consumers, who she says are being put first by the government. Scaling back subsidies also plays well in Tory heartlands where onshore windfarms are anyway viewed by many with outright hostility.

The subsidy elephant – and many claim if it gets built it will be a white one as well – is new nuclear and Hinkley Point C. EDF has yet to make a final investment decision, but the path will have been considerably smoothed by the British government’s decision this week to guarantee £2 billion of the cost of the project to try and entice EDF’s Chinese partners to commit to the project.

On the water front, minister Rory Stewart has been noticeable only for his silence. All he has said is that opening up the water market in England is a priority. The water companies will be extremely interested in what he has to say, when he does speak out.

The utility agenda generally is likely to be a background conference issue for the Conservatives. Their focus will be on areas where they think they have the upper hand: the economy and national security. But despite being down the pecking order in Manchester, knowing where the party of government
sees policy going over the next five years remains.

Labour reborn

From the Milishambles that was election night through the divisive and fractured leadership contest, the Labour Party has undergone a difficult rebirth.

Veteran left-winger Jeremy Corbyn – although overwhelmingly backed by party members is a controversial figure.

Established and well-respected frontbenchers have stood down – former energy secretary Caroline Flint among them, saying she would be best able to serve the party from the back benches – and a new top team has been put in place.

Stepping in to replace Flint is Wigan MP Lisa Nandy, who was “carefully chosen” for the role, says Labour MP Barry Gardiner, despite minimal energy experience. Also joining a relatively inexperienced front bench is new shadow environment secretary Kerry McCarthy, who is now the best know vegan in parliament.

Both McCarthy and Nandy face a steep learning curve as they replace the political stalwarts of Flint and former shadow environment secretary, now shadow defence secretary, Maria Eagle.

The Corbyn revolution is still in its nascent stages, but the conference in Brighton will give us all a clearer idea of where the new Labour (not the Blairite New Labour) will be headed. He was elected on the back of an anti-austerity agenda, framed by his socialist background and helped along with headlines swirling around his “personal wish” to renationalise the six major energy companies and National Grid.

Corbyn’s policies in his leadership manifesto are more measured. Behind the renationalisation headlines – which he did nothing to stop – are plans to increase competition, modify regulation, boost community ownership and energy projects, and develop a smart power system. Nothing ground-breaking or too revolutionary there.

What is of interest now is how the new Labour leader and his shadow cabinet work together to put on a unified front and take forward these policies, and to what extent Corbyn will push for his personal agenda.

The SNP explosion

Things appear more settled for the SNP, but it is easy to forget they saw their number of MPs jump by more than 800 per cent in May.

One result of this has been the migration of the annual autumn conference away from their traditional home in Perth to Aberdeen – with a much bigger venue able to house the swelled ranks of the party, and the greater media coverage as well.

Another outcome of the SNP explosion is that new doors have been opened for the party, which have provided them with new platforms to score political points.

With limited previous Commons experience, the SNP’s Westminster veterans were pushed towards the top roles in the party, leaving space for Angus MacNeil, Callum McCaig and Calum Kerr to take on the top energy and water roles.

A settling-in period is taking place as MacNeil gets to grips with his role as chair of the Energy and Climate Change Committee while Kerr and McCaig have made fairly quiet starts as the environment and energy spokesmen, respectively, for the party.

But this is expected to change as the SNP pushes the party line on energy and water, with one eye on May’s Holyrood elections.

Top of the SNP agenda will be the issue of transmission charges, something the SNP has repeatedly claimed are “unfair” against Scottish generators, including SSE’s Longannet coal-fired power station. Indeed, SSE claimed Longannet’s forthcoming closure was partly a result of its £40 million transmission charge bill.

The impact of the much-wielded government axe on renewable subsidies is the other topic topping the SNP agenda, especially with the party still aiming for 100 per cent of Scotland’s electricity demand to be met by renewables.

The numerous cuts have hit investor confidence and campaigners north of the border claim they will see thousands of jobs lost as the industry begins to stall.

Party leader Nicola Sturgeon will be seeking to be seen to make a stand, not only to ensure Scottish energy security but also to protect green jobs.

Learning to be done

As the 2015 political world takes shape, there is a lot of learning to be done. The parties need to understand their new roles and responsibilities, and how to push on with their objectives.

For utilities, the learning process is not only about how the Conservative government will go about its business once the cost-­cutting axe has been put down, but also where Labour and the SNP stand. wThe first lessons take place in Brighton, Manchester and Aberdeen over the next month.

Utilities call for clarity of vision in briefing paper

In the midst of market reforms, technology-driven changes to infrastructure and customer expectation – and against the backdrop of a new government – there has never been a time when clear, focused utilities policy has been more needed by the sector. But as this edition of Utility Week Lobby highlights, this is far from what the industry is getting.

In a bid to put this right and to work with policymakers for greater certainty, Utility Week recently hosted a series of high-level policy workshops in association with Bain & Company designed to gain an understanding of the utility industry’s position on key issues and to create a basis for making recommendations for policy action.

The meetings were held with company chief executives and senior directors from the energy retail and generation sector, the networks sector and the water sector over the course of three days. In off-the record discussion, these leaders were vocal about the challenges facing their businesses – and the impact that past or current approaches to policy have had on their ability to meet them.

Across all of the sector groups represented at our policy workshops, there was a common desire to get to grips with recent transformations – in market structure, regulatory regimes and ways of operating – in a stable policy environment. There was a plea to policymakers to create a context of certainty so that companies can knuckle down to maintaining and rebuilding the trust of consumers. Specific ideas about what this would look like for each industry segment were detailed.

On the back of these insights, Utility Week has produced a pan-utility policy document which will be distributed at a series of party conference fringe events being hosted by Utility Week and the ENA. The document will also be sent to MPs and MSPs and made available to Utility Week readers.

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