Regulators are not easy people to fire

Click to follow
Regulators are not easy people to fire

As Virginia Bottomley discovered in the case of Peter Davis, director- general of Oflot, regulators are not easy people to fire. The legislation usually only allows it where there is gross incompetence. This may sometimes seem inappropriate, but the fact is that the rules were deliberately set up in this way to ensure that utility regulators remain free from political interference and are seen to be impartial and independent. The analogy is with the Governor of the Bank of England. Ministers can advice the Queen not to renew his contract, but they cannot fire him.

It will be interesting to see, therefore, whether an incoming Labour administration is able quickly to dislodge the regulators its leaders believe have so poorly served the interests of the public, and install those more sympathetic to the idea of crunching these privatised monopolies and their shareholders. First for the chop must surely be Professor Stephen Littlechild, the electricity regulator. Even the present Government would like to fire him. Clare Spottiswoode at gas probably doesn't stand much chance of survival either and as for John Swift the rail regulator, well, the position itself is unlikely to exist under Labour.

After that, however, the list of firings rapidly comes to a halt. Don Cruickshank at Oftel believes Labour will want him to stay and he could be right. Given the already close and unhealthy relationship that exists between Tony Blair and British Telecom, it might actually suit Labour to keep the Cruickshank wolf at BT's door.

Then there is Ian Byatt at Ofwat. Clever PR and intelligent regulation means that he generally comes up smelling of roses whatever he does. If Labour keeps any of the present generation of regulators, it is going to be him.

All of which suggests that Wessex Water may have mis-timed its bid for South West. The regulatory implications of this takeover attempt are going to come to a head just in time for an Autumn general election. Already in no mood for compromise, Mr Byatt will want to extract a heavy price on behalf of customers - less onerous price increases as well as the maintainance of a seperate share quote for both companies. It may well turn out to be too high a price for Wessex to bear.