“The UK competition regime is independent of political parties”

Last week the prime minister announced two measures in response to the latest increases in energy prices. He promised an annual review of competition in the market and to “roll back some of the green regulations and charges that are pushing up bills”. An inquiry by competition authorities should be welcomed, but the proposed measures raise some serious concerns.
The good news is that at last someone is suggesting that the competition authorities with expertise in such inquiries should decide whether there are competition issues in the energy market, or whether the rising prices are, as the companies say, a result of rising energy costs.
The bad news is that it is highly unusual and a matter of some concern that the government is deciding which markets should be referred for such an inquiry. It is very dangerous if governments decide which markets should be investigated.
One of the great benefits and strengths of the UK competition regime is that it is independent of political parties that, as we have seen, have tended to provide short-term solutions that often cause more problems than they solve.
One reason this is important is that the companies have security against government interference so they can raise capital with lower risk and cost to consumers. If lenders expect companies to be subject to repeated government intervention it is consumers who will pay in the long run.
Professor Catherine Waddams, Centre for Competition Policy, University of East Anglia