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Businesses pile pressure on BEIS with calls for policy

Some businesses believe energy policy will be closer aligned with their interests following the formation of BEIS, however most have recognised the need for long term policy and certainty.

Some businesses believe energy policy will be closer aligned with their interests following the formation of BEIS, however most have recognised the need for long term policy and certainty.

Large energy users have called on the Department of Business, Energy and Industrial Strategy (BEIS) to prioritise the creation of a long term policy framework while questions remain over the future importance of energy and climate change policy at the new Whitehall office.

According to a survey of 50 major energy users across a range of intensive industries carried out by energy consultants Inenco, two thirds of those businesses asked believe BEIS’ top priority should be a suite of new policies.

Respondents claimed that investors and the market in general needed “confidence in the security of their investments and a clear indication of the future direction / vision. I.e. what the future looks like”.

In light of the Brexit vote and the unexpected closure of the Department for Energy and Climate Change to make way for BEIS, many have pointed to increased uncertainty in the energy sector. This has been reflected in the survey, with almost a third (30%) of businesses claiming energy will suffer without a dedicated department.

This result echoes the words of James Heappey MP, who recently referred to the new department as “BIS [former Department of Business, Skills and Innovation] with energy as an afterthought”.

However, a higher proportion of respondents (44%) were more optimistic, suggesting that energy could move higher up policy agenda when linked to business and industrial strategy. Those who believed that energy would become more important to the government generally thought that combining energy with business would give the department more weighting.

One respondent commented: “Energy and business will be better placed to talk to each other and influence policy, so probably a quite good thing for large energy.”

However, Inenco claims many respondents said that the focus on energy is likely to be diluted as “without a single point of focus, this already confused policy area is likely to suffer further from under investment and under skilling”.

"Without a single point of focus, this already confused policy area is likely to suffer further from under investment and under skilling”.

While the future of energy policy remains unclear, there was a much clearer consensus on the future of climate change following its removal from the list of named government departments. Despite naming Nick Hurd to the post of minister of state for climate change and industry, there has been little word on how the issue will be treated at BEIS.

This uncertainty has already been picked up by industry with over half of businesses (56%) claiming that climate change is at risk of being deprioritised at the new department. Multiple respondents claimed the issue was already not taken seriously enough by government and that the UK’s exit from the EU would only add to this.

One respondent claimed: “Without the binding commitments to the EU treaty government will seek to retreat as a cost saving measure.”

Only a quarter (26%) thought that climate change would remain a priority, with several stating that as the government has already committed to the Paris climate change agreement they will have to enact change to deliver on it.

However, the COP21 agreements have yet to be ratified by the UK despite claims from government that climate change not been “downgraded as a threat”.

Some also claimed that climate change would become “embedded into business strategy”, but outlining an approach to tackling climate change was seen as highly important by 46%. One user stated that the BEIS’ strategy “must include a developed approach to climate change and decarbonisation”.

Building a path to decarbonisation and confirming business energy efficiency grants or tax incentives were also seen as important priorities for BEIS.

With Parliament currently on its summer recess, policy announcements have remained thin on the ground at the new department, which was only formed days before the break began. The growing to-do list for BEIS is likely to continue to stack up before ministers return to their posts in September before conference season, with industry waiting for news of business energy tax reforms and planned changes to business rates of solar installations.