After witnessing a political storm around the general election, it is time to start looking at what the Conservatives will be doing to our country over the next five years. This is the first majority Conservative government since 1992 when John Major lead the party.
So far the energy giants are happy with the Conservatives winning the majority. As the election was announced energy shares have soared because of their majority share throughout the election. This is mainly due to labour’s defeat, along with no expectations of a price freeze or strong regulations looming over the energy giant’s shoulders.
“This election result is extremely positive for UK Utilities as the Labour base position of a price freeze could, in extremis, have caused financial distress for UK retail companies.”(Source: Financial Times)
This only confirms that the price freeze had a strong potential to harm, making the industry less competitive. The Conservatives will not let the energy companies walk over the industry. There is currently an ongoing probe in the industry about competitive fairness. The Tories have always been supportive of free trading, less regulation and more competition and we should expect to see this over all markets. There are other plans as well like the smart metering roll out in 2020 and they are looking into forcing the energy groups to accept one day switching.
Now that we know the sort of things to come in the next five years under Tory legislative instruction, we can assume for the beginning of their reign from a political point of view, the energy industry looks to be stable. However, what we do know one thing about energy, it is always unpredictable and anything can happen, like the oil slump in January 2015, which is only just recovering now.
It would be fair to say to expect more competition within the industry, especially with the possibility of one day switching, which should also decrease process time for quotes for both domestic and commercial businesses. In regards to the energy industry, be wary of price hikes and spikes due to its volatile nature, now that the price freeze is a dwindling memory.
Even though the conservatives should bring stability and increased competitiveness to the market, there are always unforeseen circumstances that can easily affect the industry; you never know the Conservatives might surprise us all.