Energy has been one of the flagship policy areas for Labour since the party swept to power in 2024, with its Clean Energy Superpower Mission and Clean Power 2030 pledge providing one of the clearest departmental agendas across the entire government.

Yet, with Ed Miliband, who has driven the programme, moving to Foreign Secretary, and Miatta Fahnbulleh coming in as Secretary of State for Energy Security and Net Zero, businesses are asking what the new regime means, and whether this represents a break from the past two years.

Clarity, costs and pragmatism

Following the muddled communications of the Starmer premiership – the Burnham comms operation is already clearer. In recent speeches Burnham has focused on a small number of core issues and delivered associated key messaging repeatedly. Reducing the cost of living, especially for the less well off, has been at the forefront of this.

As such, it is telling that his first policy announcement has been cutting the cost of electricity by removing the 5% VAT levy from bills. Whilst this is not a huge saving per household (around £45 annually, and half that in practice as it only applies for an initial six months from October), it is a quick and easy intervention – and a signal of intent.

The extent to which that intent can be delivered on moving forward is the core challenge the new government will face. There is significant merit to moving further policy costs away from electricity bills and into general taxation – but this comes with a price tag to the exchequer, now controlled by John Healey, who must also find significant additional defence spending given his prior resignation over this topic. On that basis, overall DESNZ budgets could be in line for a haircut – with nearly £500m already having been ‘reprioritised’ to fund a cap on bus fares – so high capex projects will have to state their case more convincingly than ever.

Part of this will be making clear how investments will benefit not just UK plc but regional growth – and pass the “Makerfield test”. Expect such considerations to take higher priority than environmental concerns or explicit ‘net zero’ projects – even whilst in many cases these will be one and the same. The Jackdaw and Rosebank fields will be an early test of this pragmatism, and many expect their approval to be confirmed, even whilst wider exploration remains banned within this parliament.

Nationalisation and regulation

Another Burnham key message has been that wrong turns were taken in the 1980s to privatise “the essentials of life”. So, a renationalisation agenda, at least in part, can be expected to follow – with water (and particularly Thames Water) likely to be the immediate focus. Some degree of public ownership – or at the very least increased regulation – may be considered for the energy industry, but this is likely to be restricted to the network operators rather than to generation. Notably, in her prior role as CEO of the New Economics Foundation, Miatta Fahnbulleh was herself involved in developing proposals for greater public ownership of critical infrastructure, whilst her background in the co-operative movement suggests that models for delivering this could include municipal, mutual, worker and community ownership as well as conventional state ownership.

Continuity is king

In spite of all of the above, and of Burnham’s promise that his premiership will be a ‘circuit-breaker’ with what has come before, it is also true that his mandate is derived from the 2024 manifesto, and he has promised to stick by its core pledges.

Furthermore, whilst he may have moved from Energy Secretary, as a long-time Burnham ally, Ed Miliband’s overall influence in the government has increased. Expect him to block any moves to junk an agenda which is personal for him and part of his political legacy.

However, in the end, such moves are unlikely.  The net zero push is consistent with Burnham’s ambitions for regional growth and reindustrialisation – and, ultimately, reducing household bills. The return to the Department of Fahnbulleh – and the retention of Michael Shanks and Katie White – signifies this consistency. The comms may be different, and we may see more ‘pragmatism’ on oil and gas, but the push to decarbonise and electrify our economy will continue apace.