Utility Week

14 | 10TH - 16TH JANUARY 2020 | UTILITY WEEK Policy & Regulation 14 | 10TH - 16TH JANUARY 2020 | UTILITY WEEK Policy & Regulation Analysis O n the surface, it may have looked as if nothing had changed for utilities in their relationship with the govern- ment in the wake of last month's election. As the dust settled on the Conservatives' landslide victory, the energy and water sec- tors soon discovered they were dealing with the same ministers they had been when the general election was called. Ordinarily, a general election will result in a widespread changing of the guard in government. This time was di• erent. Even though he had been returned to Downing Street with a majority, prime minister Boris Johnson largely kept existing ministerial teams in place. While everything may appear to be calm on the surface, plans are being hatched in the bowels of No 10 for a far-reaching shake- up of how the government operates. The centrepiece of this revamp looks set to be an overhaul of the Department for Busi- ness, Energy and Industrial Strategy (BEIS). According to post-election brieˆ ngs, BEIS will be expanded to incorporate regional development. As part of this shake-up, energy and climate change would once again be hived o• into its own separate department. This would e• ectively see the rebirth of the Department of Energy and Climate Change (DECC), barely three-and-a-half years since it was killed o• as part of Theresa May's ˆ rst ministry shuŠ e in July 2016. Freer hand Any such governmental reshaping is prob- ably bad news for business secretary Andrea Leadsom, whose political stock can be expected to decline for Johnson at the end of this month. The PM remains under pressure to keep Brexit hardliners such as Leadsom and envi- ronment secretary Theresa Villiers on side until he has secured his deal for the UK's withdrawal from the EU. But once this goal is achieved, he will have a freer hand in terms of hiring and decisions. Rishi Sunak, the Tory rising star who Johnson brought into the Cabinet as chief secretary to the Treasury in his ˆ rst reshuŠ e last year, has been tipped to take the top job at the new business department. However Kwasi Kwarteng may ˆ nd him- self rewarded with a promotion to the head of the new-look DECC. The minister of state for energy and climate change, who already has the right to attend Cabinet, was a staunch supporter of Johnson long before the latter became PM. The re-creation of a dedicated energy and climate change department is likely to win the government kudos with voters, whose concern about global warming can only have been heightened by the apocalyptic scenes of the Australian bush ˆ res. "It looked bad scrapping something with climate change in its name," says a Utility Week source. The argument for keeping existing arrangements in place is that it would enable energy to remain part of a department with greater clout across Whitehall. One of the problems with DECC is that it never had "su™ cient ˆ repower", says Richard Howard, head of research at consultancy Aurora Energy. BEIS permanent secretary Alex Chisholm refuted the suggestion when being cross- examined during a recent House of Com- mons select committee hearing, that the shake-up meant less ministerial focus on energy issues. He told the MPs that three of BEIS's min- isters are involved in shaping energy policy, which had become "mainstreamed" into the department's wider work on industrial strategy. Josh Burke, a fellow at the London School of Economics' Grantham Research Insti- tute on Climate Change and the Environ- ment, says he warmed to the argument for BEIS following the publication of the clean growth strategy in late 2017, which explicitly linked industrial strategy and policies to cut emissions. "It made it clear that climate change and economic growth weren't mutually exclusive but were actually a vehicle for growth," he says. And rearranging Whitehall's deck chairs creates a risk of upheaval just at a time when energy policy needs to step up a gear to help deliver a more demanding 2050 net zero emissions target. Many teams could be liŸ ed and shiŸ ed into a new department. But the dividing lines are less clear for those more central- ised teams that have been integrated, says Howard. Crunch time Richard Black, chief executive of the Energy and Climate Intelligence Unit, says: "The ˆ rst half of [this] year is crunch time. The UK New year, new cabinet? Once Boris Johnson has secured the UK's withdrawal from theEU, No 10 is planning to shake up how the government operates. DavidBlackman predicts what – and who – will be involved. Tory rising star Rishi Sunak has been tipped to take the top job at the new business department Week source. Week source. Week

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