Brexit: further industry reaction

By Tom Grimwood

The country voted for Brexit by a margin of around 52 per cent to 48 per cent. Prime minister David Cameron has announced he is to step down from his post but said he will stay temporarily to “steady the ship” in the wake of the referendum.

On the stock markets shares have plummeted, with the FTSE 100 index dropping by just under 5 per cent on yesterday’s close. In London Centrica shares are down by almost 6 per cent at the time of writing and SSE shares by more than 7 per cent.

Shares in water companies United Utilities, Severn Trent and Pennon Group are all down, but by smaller percentages. National Grid has bucked the trend, with its shares trading broadly level with yesterday’s close.

Elsewhere in Europe, EDF, Eon and RWE shares have all fallen by more than 8 per cent.

After trading at almost $1.50 yesterday evening, the pound collapsed to around $1.32 this morning, its lowest level in three decades. It has since regained some ground and is currently selling for around $1.37.

Read the initial reaction from the utilities sector here. There’s more below:

Angus MacNeil MP, chair of the Energy and Climate Change Committee

“What it means for the UK in energy – it’s a very open question because the people who have no idea are the leave campaign. If they’ve got any skeletons planned there’s certainly no flesh on those bones…

“There will be a premium for investment. We’ve seen… the pound plummet. All we can hope is things settle in a week. The people looking like taking over the helm – Johnson and Farage – do not encourage much confidence at all.

“The biggest thing is these companies are international companies and rely on people from many other countries, and the UK looks small minded and distrustful of others. Do you want to go to a country with that attitude? … So you can imagine a higher cost of energy as we continue along that path.”

Jean-Bernard Lévy, chief executive, EDF

“As of today, we believe that this vote has no impact on our strategy, and the strategy… for our UK subsidiary has not changed.

“Our business strategy is not linked to Great Britain’s political affiliation with the European Union, so we have no reason to change it.

“I would just point out that in the last few days, spokespeople on energy issues for the Brexit camp – notably energy minister Andrea Leadsom – have on numerous occasions and again in recent days come out in favour of maintaining the decarbonisation policy, of maintaining the nuclear option, and of maintaining the Hinkley Point project.

“Therefore there are no consequences from this vote today.”

John Scott, director, Chiltern Power

“For those who supported remain there’s no luxury of sulking. I think it’s really imperative that we start to rebuild trust and start to forge new relationships with our political neighbours and our economic trading partners because so much depends on getting the right relationship.

“A lot will depend on the form of out model that we have and because of all the engineering and technology links and dependencies with our European neighbours it would seem to me a priority that we try and keep close to the economic zone.”

Hugh McNeal, chief executive, RenewableUK

 “As a trade association, RenewableUK has a wide range of member companies with differing views on the result of the EU referendum. The British people have made their judgement, and of course we respect that.

“Our focus will continue to be on delivering power to the UK at the lowest cost. Our future is bright; the European and global opportunities remain immense for the industries I’m proud to represent”.

Matthew Spencer, director, Green Alliance

“The nation is divided, and our environment is one of the few things left which we have in common. Britain will now have to create new national laws and stronger public institutions to fill the gaping holes that will be left as we jettison strong EU environmental agreements.

“The public did not vote for a race to the bottom, they will expect standards of environmental protection to be at least as strong in the UK as they are in France and Germany. We now need a plan from government to achieve that.”

Richard Black, director, Energy and Climate Intelligence Unit

“Leaving the EU is likely to put an upwards pressure on energy bills, partly due to the direct financial costs of Brexit and also the impact of reduced investor confidence. So an immediate challenge for the government following this vote will be to prevent bills rising.

“Affordability and security of supply have been enhanced by our increasing gas and electricity connections with the EU. A choice for the government now is whether it wants to continue expanding those connections and hence the benefits to hard-working British families, or to shut up shop.

“On climate change there has been speculation that an independent UK would scrap measures to tackle the problem. These measures are mostly enshrined in British law, however, and it seems likely that the strong cross-party majority in favour of reducing emissions in both houses of parliament would seek to defend them.”

Julie Hirigoyen, chief executive, UK Green Building Council

“Brexit is already sending shockwaves through the construction and property sector, the scale of which won’t be clear for some time. It will be a tough trading climate that will impact companies both large and small.

“Both economic and political uncertainty will have some people asking whether the green agenda needs to be deprioritised while business goes into firefighting mode. This must not and need not happen.”

Tim Emrich, chief executive, UK Power Reserve

“UK Power Reserve’s role is to keep the lights on no matter the political landscape.  What we need most in energy is a continuation of government’s commitment to security of supply and to encouraging independent gas-fired generation to join renewables in powering the UK’s future, which is now clearly outside of EU.”

Martin Baxter, chief policy advisor, Institute of Environmental Management and Assessment

“Environment and sustainability professionals will now look to the future with some sense of uncertainty. It is therefore essential that the government gives a commitment that, in negotiating the terms of the UK’s exit from the EU, an equivalent or enhanced level of environmental protection and climate policy will be implemented here in the UK… 

“An immediate test of the government’s commitment to environment and sustainability lies in the adoption of the UK’s fifth carbon budget.  We urge the government to adopt the independent Committee on Climate Change recommendation for a 57% emissions reduction, giving a clear and positive signal of its long-term environmental commitment.”

Alison Baker, oil and gas leader for the UK and EMEA, PwC
 
“The oil and gas industry is a global business and as a result should be less impacted by today’s EU referendum result…

“However, there will be some hurdles on the road ahead. Any further downturn in the economy or volatility in the oil price could cause further distress in the sector and in particular further project sanction deferrals might have significant consequence for the service sector who also rely on mobility of employees around the world.

“It will be vital for government, OGA and industry to accelerate the level of collaboration over the coming weeks and months to ensure that together we can work through this additional layer of uncertainty.”