Business Outlook: Keep politicians' hands off lottery

The shambles of Oflot and its director-general, Peter Davis, is inevitably prompting renewed calls for industry regulators to be made more accountable to the Government and Parliament. But let's not be too hasty here. The Government is hoping to publish its review of utility regulation some time this spring and few would argue with the need for reform.

Removing the cult of personality from these regulators and placing power in the hands of suitably qualified panels of experts is one obvious avenue of change. But it would also be highly dangerous to interfere with the underlying principle of this form of industry regulation - that it is entirely independent of Government.

Furthermore, anything resembling this would run counter to what Labour has done with the Bank of England. Few dispute the success of that initiative; for the first time in recent history policy is seen to be free of political interference. Credibility is enhanced and long term interest rates are falling accordingly.

Independence is as vital to utility regulation as it is to the conduct of monetary policy. Indeed to have it managed by politicians would be to fall into the very same trap of crony capitalism that has bedevilled the Far East. Just imagine it. Prices would be set for the purpose of getting reelected and investment would follow the pet projects and desires of the likes of John Prescott.

Our privatised utilities would lose the confidence of the capital markets, investment would fall or become more costly, and our infrastructre would be damaged accordingly.

By all means make utility regulation more accountable, transparent and open to challenge, but for heaven's sake don't give it back to the politicians.