Energy industry ‘requires new policy framework’

The energy industry requires a new policy framework based on clear objectives and a simpler structure. That’s according to EY’s Chief Economist, Mark Gregory, who suggested this is necessary after […]

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By Jonny Bairstow

The energy industry requires a new policy framework based on clear objectives and a simpler structure.

That’s according to EY’s Chief Economist, Mark Gregory, who suggested this is necessary after the slowing economy, the EU Referendum and a shift in public mood have reduced business confidence, scared investors and seen the value of the pound plummet.

He claimed these effects have stopped the UK from building back the momentum it had before the financial crisis.

Mr Gregory said he expects these economic conditions to persist for the next 12 to 18 months and possibly longer.

He suggested regulation in the energy sector has often been deployed where competition was either deemed as unviable or insufficient to deliver desired outcomes.

The economist said this approach is now under intense pressure, with both of the UK’s largest political parties increasingly turning to policies based around greater intervention in the energy sector.

Mr Gregory said: “Resources are squeezed and policymakers will be looking at ways to ease the burden on consumers, especially at the lower end of the income spectrum.

“The moves to regulate tariffs recently announced are likely to be the tip of the iceberg. Ownership and financing are likely to be areas that politicians identify as requiring attention.”

He added he thinks the Helm Review correctly identifies many of the challenges, especially the complex policy and structural environment now facing the sector.