May’s minority government: what next?

With the Conservatives are relying on the DUP to govern, David Blackman looks at what happens now.

It was the coalition of chaos ‘what won it’, to paraphrase the Sun’s famous headline after the 1992 election. Theresa May justified her decision not to show up to the BBC’s TV election debate because her opponents were squabbling amongst themselves.

In the event though, the prime minister’s taunts have come back to haunt her as last Thursday’s poll delivered the UK’s second hung Parliament in seven years.

The result left the Conservatives with 318 seats, four short of the 322 needed to command a majority in the Commons once the continued abstention of Sinn Fein’s seven MPs is taken into account.

While they lost the election, Labour’s dramatically improved performance means the opposition now has realistic hopes of winning the next election, which should give the bosses of the UK’s energy companies greater pause for thought than when they effectively ignored the party’s manifesto.

The Tories could not forge an agreement with the Scottish Nationalists, who have by far the third largest bloc of MPs despite significant losses last week, as the two parties are completely at odds on both Brexit and independence.

Ditto the Lib Dems, their former coalition partners. The lack of alternatives means that the Conservatives have been forced into the arms of the Democratic Unionist Party (DUP) in order to ensure a majority in the House of Commons.

However, May’s authority as prime minister is shattered. The PM’s credibility had been eroding ever since the mid-campaign U-turn on social care, which undermined overnight the Tories’ central pitch of delivering strong and stable government.

May’s position as PM looks secure in the short term but she is clearly on borrowed time. And she has lost her right-hand man and joint chief of staff Nick Timothy, about whom Tory ministers and backbenchers were spitting feathers due to his role in shaping the Conservatives’ botched manifesto.

Timothy’s departure matters for energy policy because his vision of a more interventionist economic policy underpinned the manifesto’s proposed cap on household bills. He had explicitly backed the idea of price caps in a blog written before he re-entered government with May last summer.

Tory fury over the manifesto will fuel the backlash against any policies, like the energy cap, which are associated with Timothy. Those on the free market wing of the Conservative party, who were always uncomfortable with the price cap, will be sharpening their knives with particular relish. And Philip Hammond, who was reportedly uncomfortable with the proposed intervention, will have more clout vis-à-vis the wounded PM.

Greg Clark remains in post at the top of business, energy and industrial strategy department, where plans are understood to be well advanced on energy and industrial strategy policy.

However, Timothy’s departure robs the industrial strategy, which was being consulted on just before May called the election, of an important advocate at the top level of government. And Sajid Javid, who undid a lot of work by his predecessor Vince Cable to shape an industrial policy during the coalition government, retains his role as communities and local government secretary. The survival of the ardent Thatcherite Javid, who had been widely tipped for the chop in the post-election reshuffle, illustrates the shifting power dynamics within May’s Cabinet.

The election result can also be interpreted as a rejection of the hard Brexit vision of Theresa May under which the UK looked set to withdraw from the internal energy market, the emissions trading scheme and Euratom. With the balance of the Commons tipping in favour of MPs, who either oppose Brexit or are keen on a softer exit from the EU, the prospects of a soft Brexit have increased which could have implications for the UK’s ongoing energy relationships with its European neighbours.

The absence of a clear result from the election will stymie decision-making. Even with the help of the DUP, the government will have a tiny majority in the Commons. Those with long memories recalls the shenanigans the 1974 Labour government, the last to possess such a wafer-thin majority, had to go through in order to get its business through Parliament, which even involved pushing sick MPs on hospital trolleys through the voting aisles.

The sheer difficulty of winning votes will give rebellious Tories the whip hand, a particularly problematic scenario given the huge amount of legislation needed to unpick the UK’s 40- year relationship with the EU. The Queen’s Speech, which is due to be published next week but could be delayed as negotiations with the DUP drag on, is expected to be much thinner than usual.

The difficulty of decision making is likely to be bad news for efforts to upgrade the UK’s energy infrastructure.

May took last autumn’s controversial decision to push ahead with the Hinkley C nuclear plant on the back of confidence generated by a runaway lead in the opinion polls. However, with such a thin majority even weaker position to make kind of tough calls about the UK’s long-term infrastructure needs.