Commons committee chief urges reform of regulators

THE CHAIRMAN of the Commons industry select committee yesterday backed a report that called for a fundamental reform of the way utilities are regulated.

Richard Caborn MP said the system of watchdogs for the gas, electricity and water industries was in danger of being discredited. He believed regulators had created personality cults, adding: 'I am not alone in feeling that there is an aloofness about Offer, Ofgas, Ofwat and Oftel.'

The report, by the Institute of Public Policy Research, called for watchdogs such as Ofwat to be abolished and replaced by regulatory commissions. These would regulate sectors - for instance, by combining the energy watchdogs Ofgas and Offer - rather than individual businesses, to provide a more coherent industrial policy.

Regulators should be more accountable to Parliament, with objectives clearly defined so that performance could be measured.

The report said: 'In effect regulation has become industrial policy by default, determined not by government but by individual public servants exercising an exceptional degree of personal discretion.'

Mr Caborn said he understood complaints that recent price reviews for the water and electricity industries had been tilted in favour of companies. The introduction of some suggestions in the IPPR report would help to balance the interests of the consumer against business.

He said his committee had no plans to investigate the water and electricity reviews, but was more interested in supporting reform of the whole regulatory system.

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