Utility Week

14 | 12th - 18th MAY 2017 | UtILItY WEEK Policy & Regulation Westminster voting intention If there were a general election tomorrow, which party would you vote for? Source: YouGov 2-3 May 2017 (change on 27-28 April) Lobby Policy / Budget / Brexit Policy & Regulation Gearing up for 8 June The energy sector is preparing for a rearguard action during a general election campaign that will take the attack to the retailers. David Blackman investigates. N ext week the general election cam- paign begins in earnest as the major political parties wheel out their mani- festos. They will have their work cut out fol- lowing Theresa May's decision to call a snap poll. Illustrating how much Labour was caught on the hop by the prime minister, the party's members received an email just over a fortnight ago asking what they would like to be included in its manifesto. Industry bod- ies seeking to help shape the parties' policy process have been caught equally off guard. So how is the energy sector's policy plat- form shaping up, and does its list of key asks match up with Westminster's agenda? The election campaign looks set to be dominated by the UK's withdrawal from the EU. A continuation of the efficient trading arrangements delivered by the EU's internal energy market must be a "priority outcome" from the upcoming Brexit negotiations, says Energy UK's policy paper, published a fort- night ago. But for utilities, domestic issues will matter most in the upcoming election. The bad news is that further regulation of energy prices looks like an even better bet than the thumping Conservative majority being predicted by the opinion polls. May has pledged to take tough action to rein in energy prices. The Conservative mani- festo itself is being drawn up by the joint chief of staff Nick Timothy, who is focused on bread-and-butter issues like energy bills, which matter to the lower middle class voters the party is seeking to detach from Labour. In its election manifestoes, the sector mounts a rearguard action against price-capping. Energy UK argues strongly that competi- tion remains the most "appropriate way to drive down prices" as well as a better spur for innovation. SSE backs up the trade body by arguing that competition should be "at the heart of" the government's plans for the energy retail market. Further price regulation would create "huge uncertainty around future government intentions, putting at risk billions in investment and jobs", adds Energy UK. Phil Grant, partner at consultancy Bar- inga, agrees: "I'm not sure how many more politically motivated interventions the sec- tor can withstand." Investors have yet to be deterred from the UK energy market, he says. But more regulatory meddling in the energy market could put off those seeking low-risk returns, like pension funds, which would drive up the cost of capital for the sec- tor with knock-on consequences for bills, Grant warns: "Every intervention increases "A vote for me and my team is a vote to secure strong and stable leadership through Brexit and beyond." Theresa May, Conservative leader and prime minister "Labour is standing for… a fully funded NHS and schools, training and skills, an end to rip-off privatisation, fair taxation and a fairer, more equal country." Jeremy Corbyn, Labour leader "The Brexit squeeze is already being felt in the world of business, through higher import prices and reduced investment." Nick Clegg, former leader, LibDems 48% (+4) 29% (-2) Conservative Labour LibDem UKIP Other 10% (-1) 5% (-1) 8% (0)

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