Utility Week

UTILITY WEEK | 28TH JUNE - 4TH JULY 2019 | 11 Policy & Regulation Michael Gove Gove narrowly missed the final run-off with Johnson to become Conservative party leader. There will inevitably be question marks over whether Gove will win a place in a Johnson Cabi- net, given the animosity that has grown following the former's surprise decision to withdraw his support for his fellow Brexiteer during the 2016 Conservative leadership campaign. Johnson has said he has no hard feelings towards Gove, but even if he offers a government job, it is unlikely to be the Treasury that the latter covets, says one insider: "The Treasury would be too much of a rival power base." If he survives the cull, a‡er making a splash at Defra with his crusade on environmental issues and against the water companies, Gove is likely to be seeking pastures new. In an interview with The Sunday Times last weekend, Gove was talking up his plans to boost the rate of housing. Claire Perry The minister of state for energy and climate change has sat out of the current leadership campaign a‡er taking a leave of absence to care for a close relative. Perry has stated in the past that she is keen to retain the brief if the UK hosts next year's UN climate change talks, the odds on which shortened last week following the government's success in winning Italian support for its bid. Even though she backed Remain in the 2016 referendum, Perry has adopted a less public opposition to a Brexit no deal than her depart- mental boss Greg Clark, who would seem to have little chance of surviving Johnson's first reshuffle. Noting that Johnson would benefit from ensuring strong representation of female min- isters, one insider says: "She is quite well liked and respected but can be hard to work with and for. Despite that, people recognise her talent across the party. "He will be trying hard to keep people like her in the government." Zac Goldsmith A wild card for secretary of state for the environment under a Johnson prime ministership could be Richmond MP Zac Goldsmith. Before he entered Parliament in 2010, Goldsmith was editor in chief of The Ecologist magazine, and he has continued to champion environmental issues in the House of Commons. matter that much though if he pursues the same style of government that he did when he was mayor of London. There, the army of deputy mayors he appointed had considerable leeway in the policy areas they were responsible for. A Johnson Cabinet is likely to have more leeway than under the current regime, in which May has tended to keep a tight grip on decisions. One public affairs insider says: "He was good at delegating and bringing in experts and letting them get on with it. He has a short attention span and doesn't get into the detail. "Government appointments under him could become even more important than usual." And advisers will have a key role. "With Boris, Downing Street will be the absolute centre of power where decisions are made – advisers will probably be as influential as Cabinet ministers in terms of policy making," says Andy Sawford, managing partner of public affairs firm Connect, which runs the All Party Parliamentary Water Group. Industry hopes So what will the industry want to see from whoever enters government next month? Paul Spence, director of strategy and reg- ulation at EDF Energy, told the Utility Week Summit earlier this month (June) that he hopes climate and energy policy will be among the top priorities for the new prime minister. "We need to drive a fundamental shi" towards a decarbonised economy and that needs to be enabled by investment in low- carbon power." Energy offers "fantastic opportunities" for the next PM to make a splash, said Keith Anderson, chief executive of Scottish Power. "Given a clear framework and direction, there are billions of pounds waiting to be invested. The amount of money being invested in the network system shows the level of appe- No let-up at Defra In last week's televised political debate, Boris Johnson pledged to put the environment at the heart of government. So what would a Johnson premiership mean for the Department for Environment, Food and Rural Affairs (Defra) and its policy on water? The water companies shouldn't expect a let-up in pressure even if Michael Gove, the current secretary of state for the environment, moves on in the wider reshuffle that the new prime minister is expected to carry out, says Connect's Sawford: "Everything about Boris is political, he knows he needs to respond to Labour's agenda on utilities." While mayor of London, high water charges were on Johnson's radar, he says: "He knows that Labour proposals on nationalisation are popular, so needs to show that he stands on consumers' side with his own reform agenda." And Sawford doesn't rule out the idea that Defra itself could get a bigger remit, gaining sole control of climate change, which it currently has a partial remit over, as part of a wider re-organisation of government that could also see a break-up of the Department for Business, Energy and Industrial Strategy (BEIS). tite to invest in the energy sector in the UK," he said, adding that the sector could demonstrate a "great track record" in attracting investment. "If you get the framework and mechanics right, we will create a huge number of jobs. If someone comes in with the right attitude, there are easy wins in terms of expanding the number of projects." Michael Lewis, chief executive of Eon UK, identified the need for incentives and targets to encourage energy conservation, reduce the use of gas for heating and foster uptake of heat pumps and district heating systems. Referring to the recent Budget announce- ment that homes should no longer be fitted with gas heating from the middle of the next decade, he said: "2025 is great start but we need a lot more ambition." Slade agreed there is "tons more" that can be done on energy efficiency, which should become a national infrastructure priority, and encouraging renewable generation. "Let's be prepared to look at the funding mechanism so we can bring different technologies to market. "Let's get some serious and long-term understanding about where CfDs [contracts for difference] are going," he said, adding that there should be a fresh look at the 6GW limit on new auctions. However Brexit will continue to dog the next PM, just as it has blighted May's time in Downing Street. Lewis told the Summit that ruling out no deal is essential, branding it a "clearly insane" move. But Slade urged the next PM not to allow concerns about Brexit to swamp the longer- term issues surrounding climate change. "Let's remember that climate change is much bigger than Brexit and get climate policy, because if we get the policy frame- work this industry has proved it can deliver. "It's wonderful to have this rhetoric but no value unless we follow up with policies: let's get this competition done." Who could be in – or out

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