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Labour landslide: Anticipating change in the Energy & Utilities sectors

What changes can businesses within the Energy & Utilities sectors anticipate following the results of the 2024 UK General Election?

Rachel Reeves, the new Chancellor, has said that her central mission is to restore growth. One of the ways that she is looking to do that is restore confidence in public-private type partnerships. There has been mention of the creation of a national wealth fund to back large infrastructure and green energy projects.

Alongside Rachel, Ed Milliband has returned to Government as Energy Security and Net Zero Secretary.

He has responsibility for finding the £8.3bn promised for clean power associated with a green prosperity plan to deliver 650,000 jobs. Labour have pledged to deliver the clean power policy by 2030, and their vehicle of choice for delivering this is the proposed Energy Independence Act. We should start to see the detail of the Act filtering through in the coming weeks and months.

One particular interest will be how Labour deals with the challenges in the water sector. Under previous leadership Labour were calling for nationalisation, but that has fallen away as a policy.

It looks likely that Labour will await the outcome of the ongoing Ofwat price determination process and the wider investigation into alleged unlawful practices by water companies before making any major moves. We could in the future see a reallocation/alignment of water regulatory powers – watch this space.

It is also likely we will see some of the funding for infrastructure projects mentioned above drop into the water sector through relatively new funding mechanisms such as direct procurement for customers model – that is with the aim of filling the suggested funding gap of £50bn in the water sector to address the issues around future supply and the management of waste water.

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