Utility Week

UTILITY WEEK | 24TH - 30TH JANUARY 20120| 13 New Deal for Utilities Jones on: Regional sustainability On the issue of 'levelling up' the North – and despite most debate so far having been largely transport- oriented – surely such a huge economic rebalancing pro- ject would ultimately put a greater call on the operations of critical regional utility giants, such as Northern Pow- ergrid, I ask. "That's a sustainability issue, and rightly so," says Jones. "It's a net zero issue - and you'd have that whether or not you cared about regional disparity. Even if all the regions were neck and neck in terms of GDP per head, you'd still have all the same conversations to go through, such as 'What kind of energy do we need?' And, 'What kind of smart city do we need?'." "But if that [sustainability issue] is seen as a poten- tial to stimulate the other [regional growth], then fair enough. If the idea is that we have got to create some economic activity of a sensible good nature, then here is where you could see a tilt towards energy infrastruc- ture… in the regional growth context. I think we can be a vehicle for that." Regional fairness A proud Yorkshireman, Jones has long been putting for- ward the case for regional growth, though he's quick to point out that he has not been the only one. "There's lots of us. I think it's for anyone who believes in our region. Everyone who loves the region ought to see the same thing – whether they are in my game or not. And you've just seen a Conservative government get swept to power in areas that it never dreamt it would have MPs, on exactly this point. "The election has now revealed it as an issue: the challenge of what you do in a post-industrial western economy. It's a challenge all over the world. And we've had it facing us as a huge domestic policy, I think, for a number of years." Regional collaboration Jones is a strong voice within the northern business com- munity, as a member of Business North – an independent leaders' network focused on issues of economic growth. He has also been active in the Northern Powerhouse debate, although Northern Powergrid is not a subscrib- ing member of the Northern Powerhouse Partnership. (That body was set up to represent business and civic leaders across the North, and is chaired by former chan- cellor George Osborne, a key proponent of the power- house vision which he first outlined in 2014.) Yet Jones shares his input with the high-profile forum because he believes it important regional issues are "addressed in concert". "It's a piece of very complicated orchestration that's needed," he says, including for example working together on education and skills, along with local trans- port to allow people access to within an hour of a labour market. If you can get more people who can continue to live normal lives and get to and from work, you create a concentration, and you have a much greater chance of a virtuous circle of skills, wages rising and productivity increasing. "That is where infrastructure plays its part. And I would highlight from an energy point of view that there is not a deficit today relative to other parts of the country. But there is a deficit relative to the long-term ambition." This ambition, explains Jones, might take the form of agreeing to focus on one area of local skills and produc- tion, such as making batteries for EVs. "There might be loads of investment there, we might be excellent at it. We already are as good as anyone. So, you might think, why not make that one of the areas that we concentrate on?" But does the network boss fear the huge level of coop- eration needed to tie up the many moving parts involved in such large regional visions could prove an obstacle? "Yes, it could. As I say, it will need a lot of orches- tration. But at the end of the day you've got to decide whether you believe in markets and free enterprise, or whether you think you can centrally plan something. And I'm not in the central planning club." Regional investment Regarding these long-term ambitions, will utilities require more support, I ask, to help their regions realise them? And what precisely would they need? "Well you need a regulatory deal that encourages it, that incentiv- ises it," says Jones. "The usual story." But surely regional growth could be grist to your mill on this? "To a point. But without sounding like we're banging the same old drum, there comes a point where they've got to be willing to make the investment attractive. In all forms, both in terms of the returns and the level of confi- dence that investors can have. "And I bang the drum again because I don't think we can just ignore it. And the past three or four years have not been our proudest as an economy and a nation for attracting long-term investment. "But we've taken a massive step in the right direction I think, on that subject [renationalisation] by a very big public vote in favour of saying, 'look, we're not doing all that stuff '." Regional moment My phone call with Jones is almost over, but I can't end without asking if the current collapse of the nationali- sation debate feels like the perfect opportunity for net- works – and utilities in general – to shout more about their credentials as true champions of their regions. "It's one of the [country's] best kept secrets. Energy networks are outstanding operating companies with investors that have proved over a 20 to 30-year period that they are prepared to step up and make significant investments, and hugely improve service levels and reliability. "I think that in every region there's a great energy network company. And there are some excellent com- panies that need to come together - across local govern- ment, devolved government, and the business sector. "Networks are well placed to be part of this wider coalition that needs to emerge in each of the regions." Suzanne Heneghan, editor, Utility Week • Phil Jones will be talking at Utility Week Investor Summit 2020 in London on 5 March. For more details, visit: https:// event.utilityweek. co.uk/investor/ We need local heroes ☛

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