How cost of living and energy security are changing the policy landscape.
The biggest challenge to political ambition is often political reality. And that is certainly in the energy policy field. COP26 was only 6 months ago, and yet its lofty ambitions and the imperative to make decarbonisation the key public policy priority seems like a different lifetime.
Net zero is no longer the only game in town, and what was often seen as a universally accepted norm, and one which enjoyed cross-party support, is now being challenged from all sides.
Indeed, since COP26 (and some would say even before that, since the start of the COVID-19 pandemic) we have slowly seen the energy policy debate reframing and reshaping in front of our very eyes.
Compare Ministers’ speeches of now to those in the run-up to COP and it is apparent the language, tone, and content of these speeches on energy policy have changed dramatically. Recent opinion polls show a shift in voters’ priorities – jobs, cost of living, public services now trump reaching net-zero. And the cosy political consensus has been broken, as we have seen the establishment of net-zero sceptic groupings in Parliament, campaigns to slow our net-zero goals, and even calls for a referendum on net-zero.
Fuel poverty is rising up the domestic political agenda, as headlines warn of thousands more households having to make tough decisions between ‘heating and eating’. Ofgem’s recent announcement of a 56% increase in the energy price-cap and record prices at petrol pumps are putting pressures on policy-makers.
Cost of living and fuel poverty are now key concerns for policy-makers, consumers and industry alike. The recent fuel duty cut and £150 credit from local councils highlights the recognition that Government is finally affording these concerns.
There is recognition that cost of living will be a key political battle moving forwards, and if the Conservatives are to hold onto their ‘red-wall’ seats, they need to address this issue.
Russia’s invasion of Ukraine risks pushing these energy challenges into a full-blown energy crisis. Government’s announcement that it will end imports of Russian oil and gas by the end of the year has piled further pressure on an already fragile ecosystem.
Not only has the war further highlighted the extent to which the UK is subject to global pressures, but it has also brought back into focus the UK’s domestic energy industry and our increasing reliance on foreign imports or funding. And so, energy security is now front and centre, as we saw with this month’s publication of the British Energy Security Strategy.
Net-zero is no longer seen as enough of a virtue in its own right. It is now to be viewed through the prism of securing the UK’s energy supplies, reducing volatility in prices and cutting costs to consumers.
“This is no longer about tackling climate change or reaching Net Zero targets. Ensuring the UK’s clean energy independence is a matter of national security. Putin can set the price of gas, but he can’t directly control the price of renewables and nuclear we generate in the UK” - Kwasi Kwarteng, Secretary of State for Business, Energy & Industrial Strategy.
For those in the sector, there is a need to recognise this shift, both in thinking and narrative. Engagement with policy-makers needs to reflect new political realities, and messaging with consumers needs to acknowledge changing priorities. As ever, change brings both risk and opportunity. It’s how businesses recognise this and respond to it that will dictate success in the changing landscape.
To discuss how these changes will affect you and how best to respond, do get in touch with Cavendish Advocacy’s Head of Energy & Green Growth, Tom Bradley.
