Utility Week

6 | 12TH - 18TH OCTOBER 2018 | UTILITY WEEK News Inside story T he role of the state in the economy has returned to the centre of UK political debate. Aer decades when it seemed as if the question of public ownership had been settled, nationalisation is back on the agenda. And utilities are in the frontline of this political battle. The water industry has been lined up by John McDonnell, shadow chan- cellor, as the first sector that will be taken back into public ownership if Labour wins the next election. The party conference season, which has just ended saw the country's two main par- ties entrench their positions on this issue. Labour has begun to flesh out how it will reintroduce public ownership. Meanwhile, with their review of utility regulation, the Conservatives have begun to articulate a response to the challenge laid down by the opposition. While the Tories initially seemed nonplussed by Labour's reversion to pro- nationalisation type, this party conference showed that they plan to tackle the issue head on. So what did we learn about the two major parties' stances on the issues that count for utilities at this year's party conference season? Regulation The biggest bombshell to hit the utilities over the past fortnight has been the Treas- ury's announcement of a review of utility regulation. The review was unveiled with little fanfare, tucked away in a Treasury press announcement timed to coincide with chan- cellor of the exchequer Phillip Hammond's set piece party conference speech. But the ramifications could be wide- ranging. The National Infrastructure Com- mission, which has been charged with carrying out the exercise, said it would seek to strike a balance maintaining investment and innovation in the utilities while ensur- ing services remain affordable. The study's remit will include examining the key drivers of the changes that will affect regulated sectors over coming decades, and whether regulation encourages sufficient competition and innovation to support the efficient delivery of infrastructure. Robert Jenrick, who holds the junior min- isterial post of exchequer secretary at the Treasury, was clear at a Conservative party conference fringe meeting that the review is about "regaining and retaining" the ideo- logical initiative from Labour. He told the meeting the aim is to make the regulated industries more consumer focused and inject greater competition. Utility regulation should be "much more front-footed" in responding to changing pressures on consumers, said Jenrick, who expressed his scepticism about the price cap before entering government. He said that among the "radical options" the review might consider are creating a more "nimble and flexible" single watchdog covering the regulated industries. Fellow Conservative MP John Penrose called for the existing system of industry- specific regulators to be scrapped and replaced by a single watchdog for the utili- ties' network functions. Utilities prove key battleground The next election will be effectively fought between the Conservatives and Labour - and the world will look very different for utilities depending on who wins. David Blackman reports from their recent party conferences. "With figures like that, we can't afford not to take them back. But let's be clear, nationalisation will not be a return to the past. We don't want to take power away from faceless directors only to centralise it all in a Whitehall office, to swap one remote man- ager for another." John McDonnell, shadow chancellor "Labour will kick-start a green jobs revolution that will help tackle climate change, provide sustainable energy for the future and create skilled jobs in every nation and region of the UK." Jeremy Corbyn, leader of the opposition

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