The party conference season is nearly over, and as we mull over what policies and promises were set out with just eight months to go to an election, it’s worth reflecting what this could mean for business energy users.
Flashback to September 2013. Domestic energy prices were on the up again, and businesses were becoming increasingly vocal about the impact of policy on their ability to compete on a global market.
Amid this climate of discontent, Ed Milliband took to the stage of the Labour conference and announced a proposed price freeze should his party be elected in 2015. The surprise (and some might say bizarre) statement sent shivers down the spines of those who fear that it would send prices rocketing as suppliers look to lock out volume ahead of an election, and create an illiquid market for the duration of the freeze. The coalition retaliation was a lowering of the “green taxes” causing confusion and disarray in the insulation industry but relief for energy suppliers.
Energy was clearly marked as a political battleground, each party committing to do all they could to keep prices down and tackle the “profiteering” energy suppliers.
Since then, we’ve seen the Energy Bill cemented into law, paving the way for the Electricity Market Reform to transform our energy infrastructure, although the cost if it is already beginning to be felt by businesses.
So let’s fast forward to 2014. With this background, you could be forgiven for wondering why energy was so far down the agenda during the party conferences. Of course the economy took centre stage, but after the furore of 2013, why was energy relegated to the fringe events?
Labour repeated its intention to freeze prices until 2017 but offered no further detail on how this might be delivered, despite growing criticism by some energy commentators that the policy would be unworkable. A nod to the importance of domestic energy efficiency by both Labour and the Lib Dems might have pleased some in the industry, but what about the importance of energy to British businesses?
UKIP made their usual noises about green energy, and the Tories reiterated their commitment to “unlock the shale wealth beneath our feet” whilst ensuring that renewables are the best value for both bill payers and tax payers – but offered no further detail that I could see, or no further mention of energy.
We’re less than eight months until a General Election, which could deliver a result that has huge implications for the UK energy market. So why isn’t it higher up the priority list of our politicians?
Of course, energy isn’t just a question of rising bills. Energy fuels British industry, its costs have a major impact on the corner shop as well as the factory, and of course the cost of the bill that lands on our doorstep at home can affect how much change we have in our pocket at the end of the month. The billions of pounds needed to deliver clean and secure energy supplies in the future is one of the biggest infrastructure challenges facing our country.
Yet the lack of focus on energy concerns me. If there’s one thing investors, businesses and industry alike all call for, it’s long term certainty and the promise of stability – the very thing in question.
It seems to me as though energy is like a game of playground football. When in play, it’s kicked around, used as a plaything to call out the other team and score goals against one another. And much like a football kicked into the grass, once the kids turn their attention to something else, it lies discarded until the next game.
Over the coming months, as policies are finalised and the need to float vote-winning messages over formulating long term strategy becomes ever stronger, I very much hope we see energy return to the forefront, with all parties recognising the importance of a long term plan for this industry, not just to the energy market, but to UK plc.
Dave Cockshott, Director at Inenco Group