The party manifestos published ahead of June’s general election largely read like a horror story for utilities. Promises of re-nationalisation for the regulated monopolies and price caps for energy retailers litter the party documents. At every turn there are cries for social justice, and the suppliers of essential services are framed as a tyrannical, self-serving oligarchy.
That said, although the Conservative manifesto delivered the price regulation promise industry had been nervously anticipating, its wording offers hope that suppliers will escape the worst-case scenarios they feared might hit the market.
The commitment to extend the protection offered by the prepayment meter cap to other vulnerable customer groups, and a nod towards maintaining competition in other parts of the market, will have soothed executive and investor fears. They broadly fall in line with the position adopted by both Citizens Advice and Energy UK, that government should prevent detriment to the needy without inhibiting the benefits competition can offer engaged consumers.
The industry is not out of the woods yet though. A manifesto aside that commits the Tories to a consultation on extending energy price caps to micro-business customers was unexpected and could prove costly for suppliers.
Also, the prime minister’s pledge to deliver the lowest energy prices in Europe for the UK raises challenging questions for her Brexit negotiations – in which energy trading arrangements are not currently a top priority – and developers of new plant. The limbo bar for acceptable energy technology costs is likely to drop to a new low.
With the Tories still the outright favourites to win this election, companies should now be gearing up for lobbying activity and considering how they can best exert influence on the process of legislative change that many of their manifesto commitments will require.
One way will be to ensure that lobbying language aligns with the ruling party’s promises to the electorate, offering to help deliver a sector that works for everyone, rather than raising endless objections to suggested methodologies.
Another strategy will be to target the House of Lords. If the Conservatives win a significant majority, bills will pass quickly through the Commons and will only meet real scrutiny in the upper house. Clear communications with key peers on business critical issues should serve utilities well.