Lobby: the party conference season kicks off

The big political parties are lining up for their conferences again this year, but the world is a very different place to 2016. By David Blackman.

This week has seen the beginning of the party conference season with the Liberal Democrats annual gathering in Bournemouth.
However, business has shown little interest in the Lib Dem deliberations, who even after an improved showing at June’s general election still only have 12 MPs.

The big focus for utilities will be on Labour and the Conservatives, who between them captured 83 per cent  of the vote in June, the biggest share won by the two biggest parties in a general election in nearly half a century.

And activists will assemble in dramatically different moods than they did this time last year when Theresa May was riding high following her effective coronation as prime minister.

Tories were brimming with confidence, while the mood at the Labour conference was borderline suicidal with the party still consumed by internal wrangling over Jeremy Corbyn’s leadership.

The positions are reversed this year. Corbyn is entrenched in the leadership of his party following Labour’s better than expected performance in June, while it is May who is watching her back for challengers.

May’s lack of authority was underlined last week when the Conservatives’ allies in the Democratic Unionist Party sided with the opposition in a parliamentary vote on public sector pay.

The government’s lack of parliamentary arithmetic makes it hard to push through controversial legislation. In addition the sheer volume of Brexit-related legislation means that there is limited time available for other measures.

Richard Black, director of the Energy and Climate Intelligence Unit, says feedback from MPs suggests it is difficult to predict what will be happening in parliament over the next couple of months. “The prime ministership is very fragile,” he says.

There’s little doubt which issue will be most on Tory activists’ minds when they assemble in Manchester next week. “The Tory party will be dominated by Brexit, I’m afraid,” says Tim Yeo, the Conservative former chairman of the energy and climate change select committee.

While Brexit may be crowding out other topics, the industry will be looking for Labour and the Tories to fill in some of the blanks in both parties’ energy policies.
Top of the list will be insights into the contents of the clean growth strategy, which climate change minister Claire Perry had promised to publish in September but had yet to appear when Utility Week went to press.

Even before last week’s dramatic capacity market auction results there had been a “marked change” in the debate on green energy, says Black.

Luke Clark, head of public affairs at Renewable UK, believes the consensus around the need to decarbonise the energy mix has strengthened over the past year. “Across the parties there is a very strong majority in favour of continued development of renewables. Very few fringe voices are questioning the direction of travel.”

He argues that the dramatic fall in the guaranteed prices paid to offshore wind developers will convince many erstwhile sceptical backbench Conservative MPs about the “cold business case” for supporting renewable energy.

“We need to invest in these new sources of generation and we are one of the cheapest options available,” he says.

The same is not necessarily true, though, of grassroots Conservative party members, whose hostility to unsightly turbines helped drive the government’s decision to withdraw subsidy and planning policy support for onshore wind in 2015.

Yeo, who is also chairman of New Nuclear Watch Europe, says that the upcoming Conservative party conference is a good opportunity for the BEIS (Business, Energy and Industrial Strategy) department’s team to win over the party faithful to low carbon.

“There is an educational role for ministers to explain the reality of energy prices to the grassroots,” he says, adding that prioritising value for money considerations could go down well with the party faithful.

And Renewable UK’s Clark hopes that ministers, emboldened by last week’s auction results, will signal an open mind about subsidies for onshore wind and solar generation. “If there was an auction now, onshore wind would be coming in as cheapest source of power,” says Clark.

The industry will also be lobbying at the party conference for energy’s role in the government’s industrial strategy, a final version of which is due in the autumn. “We want to be talking about the contribution that offshore and onshore wind can make to providing relatively low-cost electricity to UK business. You are not only getting cheap power but you are building up a UK base to service that industry,” says Clark.

And nuclear power will be under the spotlight at both Labour and Tory conferences, with environmentalists calling for a rethink of government support following the dramatic reduction in offshore wind prices thrown up by last week’s contracts for difference auction.

The nuclear lobby will be heartened that BEIS secretary Greg Clark’s biggest energy speaking slot on the Tory fringe will be an hour-long Q&A at a Nuclear Industry Association meeting. “There’s so much electricity capacity coming off in the next 10 to 15 years that we need to develop all of the low-carbon options available to us and that includes nuclear. There is a strong case for nuclear as part of that mix because it is on all the time,” says Peter Haslam, head of policy at the NIA.

Perhaps even more interest will surround Labour’s position, given Corbyn’s past scepticism about nuclear power. The leader’s supporters have been emboldened by the party’s better than anticipated general election vote share to push their agenda internally.
However, the GMB union, which is staunchly pro-nuclear and holds a lot of sway within Labour, is expected to block any moves to water down the party’s commitment to atomic power.

Haslam believes that Labour will stick with its pro-nuclear line. “The manifesto was quite pro nuclear: his [Corbyn’s] priorities are in other areas.”

The industry will also be looking for clarification on the opposition’s surprise commitment in its hastily put together manifesto to bring the national grid and water companies back under public ownership,. This will be one of the hot topics on the party’s conference fringe.  

Another will be energy bills. Ofgem has promised to publish its proposals for a safeguard tariff for vulnerable customers by the end of September.

May has been criticised for breaking her election promise to cut bills for all customers.

However, the timetabling of the party conference season means that the prime minister gets to have the last word.

She wants to use the party conference speech to relaunch her leadership. Announcing legislation to cut energy bills, just over four years after ex-leader of the opposition Ed Miliband unveiled his energy price freeze plan at Labour’s annual gathering, would be a savvy way of distracting attention from her party’s Brexit divisions.

Energy companies will feel cheesed off though if they once again end up being used as a political football.