Utility watchdogs savaged for their aloofness

RICHARD CABORN, Labour chairman of the House of Commons trade and industry committee, launched a savage attack on the regulation of utilities and called for an independent scrutiny of the watchdogs under a Royal Commission, writes Mary Fagan.

He said regulators were aloof and beyond reach of Parliament and the public and added that regulation was in crisis, with the protection of consumers only a secondary duty. Shareholders in the gas, water, electricity and telecommunications companies reaped rewards at the expense of customers, he said.

Mr Caborn told an energy conference in London: 'To say that the regulatory system is in crisis and that the blame lies with the way in which the regulators have used their powers of discretion and created their own personality cults is only part of the story.'

He said that regulation had become a substitute for government policy-making and had left crucial decisions with individuals who were neither elected nor accountable. 'It suits the Government to heap the blame on the regulator. The real crisis is political.'

Mr Caborn criticised as 'untenable' a system which, he said, was a mixture of ad hoc intervention, price regulation and lopsided competition rules. He said one lesson learned by the trade and industry select committee was that energy policy could not be left solely to the marketplace and that this was on the minds of the Labour Party's energy policy review team.

His attack follows a row earlier this week over the relationship between the Government and Clare Spottiswoode, head of Ofgas, the gas watchdog. She was questioned by MPs over her independence from civil servants and British Gas. She said that it was her style to be open with the organisations with which she had to deal.

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