The last fortnight has seen the government descend into a level of backbiting and sniping that has left seasoned Westminster watchers stunned. And this post-election chaos can only be bad news for power utilities, says former energy and climate change secretary Ed Davey.
He believes that the combination of Brexit-related uncertainty and divisions inside government is toxic for the industry, given the very long investment horizons energy projects work on. “This looks like one of the most incompetent governments of the modern era. The industry needs clear leadership to set out a clear direction of travel.”
Alan Whitehead, the Labour party’s energy spokesman, agrees: “You have an extremely weak and divided government which is struggling to get hold of the levers of government, and the danger of general inertia setting in.”
The four months which have elapsed since the last parliamentary recess begin back in March have seen virtually no progress across a string of energy policy areas.
The most notable delay surrounds the clean growth plan, the publication has been put back again until after parliament reconvenes in September.
“The indications were that it would be out in the spring and that it was pretty much wrapped up,” says Whitehead, who points out that it is already more than a year since the publication of the fifth carbon budget, for which the plan is meant to provide a road map.
Connected to the plan is the revamp of the levy control framework, which is also yet to see the light of day. Those nuclear companies which submitted entries for the BEIS small modular reactor competition are still waiting to find out who the winner is.
The only tangible movement has been on bills, the big energy cause celebre over the last few months. Even here though the mooted clampdown on standard variable tariff energy bills, which featured so prominently in the Conservative general election campaign, emerged in a much more watered-down form.
Policy delays
Perhaps the most glaring illustration of the drift within government, for Whitehead, is the relatively low-profile revamp of the renewable heat incentive subsidy scheme.
A statutory instrument – Westminster terminology for a piece of legislation that doesn’t require a full-blown debate and vote in Parliament – had been tabled in March. The secondary legislation was subsequently withdrawn as the government cleared the decks for June’s snap generation but has not yet resurfaced, leaving Whitehead scratching his head.
“Nothing’s happening in the House so you would have thought it could have come back again reasonably promptly: this is the sort of stuff that is just gumming up the works now.”
It takes time for new ministers to get their heads around their briefs, he acknowledges.
However, this particular post-electoral malaise appears to run deeper, believes Davey. The recently re-elected Lib Dem MP blames the consequences of Brexit. “With the amount of ministerial and official time having to be poured into Brexit negotiations, we simply can’t do what we were doing before,” he says.
‘Team Clark’
However, while the government as a whole may be at sixes and sevens, business and energy secretary Greg Clark was putting on a brave face at a reception last Thursday night held to showcase the government’s commitment to its industrial strategy, publication of which, like the clean growth plan, has been put back to the autumn.
The new ministerial team assembled by Clark has garnered good notices. The secretary of state himself wins praise from his former Cabinet colleague Davey.
“Greg Clark fully understands the issues and approaches it in a rational, evidence-based way. The people there now are capable of designing policies that address the priorities. I hope they will be given the chance to do so,” he says.
One big advantage is that they will no longer have to deal with Theresa May’s once all-powerful joint chief of staff Nick Timothy, who displayed his colours as a climate change policy sceptic in blogs written before entering government.
According to several Utility Week sources, Timothy crossed out uses of the term “clean growth” from the Tory manifesto.
“The loss of Nick Timothy from No 10 is a good thing because he was an obstacle to action on climate change,” says Davey.
Tim Yeo, the Tory former chairman of the now defunct energy and climate change select committee, argues that the climate change agenda is one area that May’s beleaguered government can make progress on because it is relatively uncontroversial within Parliament. “When you don’t have an overall majority, you need things to do so that you can show you are in charge and not run into extremely political controversy.”
He argues that climate change and energy policy gives May an opportunity to reach out to her opponents as she has said that she wants to. But to do so May will have to be prepared to show the kind of leadership on the issue, which Yeo believes was lacking when Donald Trump announced the US’s withdrawal from the Paris climate change agreement, in contrast to French president Macron’s strong stance.
Climate change minister Perry is enthused by her brief. And “team Clark” is clearly determined not to allow what it sees as Ofgem foot-dragging get in the way of its objective to secure lower bills for customers.
The industry will be hoping that amidst the wider post-Brexit turmoil across Whitehall, Clark is creating a little island of calm at BEIS.