The inquiry will inevitably raise questions about the performance of Ofgem itself. Indeed, the regulator could find it is on trial as much as the companies are. After all, the very act of referring the market to the CMA is an admission of defeat when your job is to police the market. The likelihood of Ofgem surviving 2015 intact is looking ever slimmer: if and when recommending a replacement, the CMA should have an eye to the networks. It would be a shame if the competent management of the network sector were thrown out alongside the less adept handling of retail.
The government’s U-turn on letting incumbents exit the non-domestic water market once it opens up to competition in 2017 received virtually no attention compared with the blanket coverage of the energy referral. Yet in its own way, letting companies decide whether they want to stay in the market or not is a landmark decision and a victory for common sense. It is rare that companies are united with politicians, the regulator and prospective market entrants in their support of a measure, but the retail exit was that rare moment. It was illogical of the government to refuse to amend the Water Bill in the face of such united opposition (some of which came from within its own party), and increasingly difficult for ministers to defend. Water minister Dan Rogerson should be commended for listening, and if this is the first result of his influence at Defra, it bodes well. Karma Ockenden’s expert view is on p7 and our full analysis on p19.