The upcoming review of utility regulation needs to be “brave and bold”, according to the MP who led the charge on the energy price cap.
The Treasury announced earlier this week that the National Infrastructure Commission (NIC) has been charged with examining the regulation of the UK’s energy, telecoms and water industries.
John Penrose, the Conservative MP who led the backbench parliamentary campaign to introduce the energy price cap, told Utility Week at the Conservative party conference that he welcomed the review but said it had to be “radical” to meet head on Labour’s push to bring the utilities back into public ownership.
He said: “The question is whether the review will be big and brave enough.
“They need to be thinking big: we need as a party to be radical. This is one of the things that needs to be fixed urgently, otherwise the left will drag us back to the 1970s and you cannot allow them to be the only game in town.”
Penrose, who heavily criticised Ofgem in the run up to the price cap legislation, said: “We have to put across an attractive alternative: that is why this review is both welcome and needs to be bold.”
The NIC said today (3 October) that the regulatory review will seek to strike a balance maintaining investment and innovation in the utilities while ensuring services remain affordable.
It said the study is expected to examine:
- the key drivers of the change which will affect the regulated sectors over coming decades.
- whether the regulatory model encourages sufficient competition and innovation to support the efficient delivery of infrastructure.
- how regulators can collaborate on cross-cutting challenges and significant infrastructure projects.
- how the government can effectively deliver its objectives in these regulated sectors, while continuing to safeguard the independence of the regulators.
The regulation study will pay particular attention to the need to keep bills affordable and to ensure vulnerable customers are protected.
Sir John Armitt, chairman of the NIC, said: “The regulators are vital in ensuring we as consumers are treated fairly. But if the UK is to be a world leader in the latest technologies, we need a system of regulation that allows companies to be innovative, without being penalised for it.
“Our new study will examine how to strike the right balance and how companies and regulators alike can be ready to adapt to changes in future, while at the same time keeping bills affordable and protecting vulnerable customers.”
Sir John Armitt will be speaking at Utility Week’s Congress on 10 October in Birmingham. His talk will focus on meeting the UK’s infrastructure needs.
For more information about the event and to book a place click here.