Rudd puts her energy into EU referendum

Energy policy is at the forefront of the EU referendum debate today. Amber Rudd is leveraging her role as Energy Secretary to make the issue another strand of ‘Project Fear’ by claiming that energy bills will go up and the UK could be susceptible to Russian gas diplomacy. During her tenure at DECC, consumer energy bills have been a constant concern and have fuelled the desire for “lowest cost to consumer”. Rudd and the Remain camp are hoping that the public’s only real engagement with energy policy can become another string to the Remain camp’s bow. Whether it will or not is questionable. Similar arguments were made early on during the Scottish Independence referendum, only for them to quickly disappear into the ether. Rudd’s attempts to paint a picture that the UK could become subject to Putin’s gas diplomacy has definitely required some artistic licence, with the UK importing less than 1% of gas from Russia. At the moment the majority of the UK’s gas comes from Norway and Brexit should have little to no impact upon this.

Rudd has based her arguments on independent research carried out for National Grid. The report itself admits “the impact of Brexit is difficult to predict”. The reports’ claims that exclusion from the single energy market will hinder interconnector investment and will impact gas security; these assertsions are entirely credible but maybe somewhat overstated. Given the integration of the UK-EU energy market and the multinational nature of the companies involved, we can be sure that energy policy would be an important point of discussion during Brexit negotiations. The UK’s position as a gas hub, offshore wind strength and its unconventional gas reserves could help lower EU dependency on Russian gas and also help meet emission targets. Meanwhile greater interconnection and EU Smart Grid are still great economic incentives for Belgium, France and Norway. The economic shockwaves of Brexit may focus minds around the negotiation tables even further. 

The research company involved, may never have envisioned that their analysis would be the cornerstone of the Remain’s camp’s views on energy policy. But during political campaigning, anything is fair game.  The report may paint a negative picture but this may have more to do with the difficulties involved in scenario planning as a whole - as is often is the case, the truth probably lies somewhere between the best and worst of assumptions.

Douglas McIlroy

Hill & Knowlton Strategies Search