Utility Week

Utility Week 16th June 2017

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10 | 16TH - 22ND JUNE 2017 | UTILITY WEEK Policy & Regulation Lobby Policy / Budget / Brexit Policy & Regulation So much for stability A weakened Theresa May now presides over a minority government, leaving utilities guessing as to what the long-term future holds. I t was the coalition of chaos "what won it", to paraphrase the Sun's famous head- line aer the 1992 election. Theresa May justified her decision not to show up to the BBC's TV election debate because her oppo- nents were squabbling among themselves. In the event, the prime minister's taunts have come back to haunt her because last Thursday's poll delivered the UK's second hung parliament in seven years. The result le the Conservatives with 318 seats, four short of the 322 needed to com- mand a majority in the Commons (once the continued abstention of Sinn Fein's seven MPs is taken into account). While they lost the election, Labour's dra- matically improved performance means the opposition now has realistic hopes of win- ning the next election, which should give the bosses of the UK's energy companies greater pause for thought than when they effectively ignored the party's manifesto. The Tories could not forge an agreement with the Scottish nationalists, who have by far the third largest bloc of MPs despite sig- nificant losses last week, because the two parties are completely at odds on both Brexit and independence. Ditto the Lib Dems, their former coali- tion partners. The lack of alternatives means the Conservatives have been forced into the arms of the Democratic Unionist Party (DUP) in order to ensure a majority in the House of Commons. However, May's authority as prime min- ister is shattered. The PM's credibility had been eroding ever since the mid-campaign U-turn on social care, which undermined overnight the Tories' central pitch of deliver- ing strong and stable government. May's position as PM looks secure in the short term, but she is clearly on borrowed time. And she has lost her right-hand man and joint chief of staff Nick Timothy, about whom Tory ministers and backbenchers were spitting feathers due to his role in shap- ing the Conservatives' botched manifesto. Timothy's departure matters for energy policy because his vision of a more inter- ventionist economic policy underpinned the manifesto's proposed cap on household bills. He had explicitly backed the idea of price caps in a blog written before he re-entered government with May last summer. Tory fury over the manifesto will fuel the backlash against any policies, such as the energy cap, associated with Timothy. Those on the free market wing of the Conservative party, who were always uncomfortable with the price cap, will be sharpening their knives with particular relish. And Philip Hammond, who was reportedly uncomfortable with the proposed intervention, will have more clout vis-à-vis the wounded PM. "We will get Ofgem to set an absolute cap." Business and energy secretary Greg Clark "In uncertain times, one thing all the main parties agree on is meeting our carbon budgets, the need for jobs, and cheaper bills." Nina Skorupska, chief executive, Renewable Energy Association

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