A better deal for consumers and an attractive environment for investors: The regulators' perspective on the development and use of regulatory and competition powers

This paper provides a perspective from two economic regulators on the way in which economic regulation in the UK has developed over time. Regulation has delivered great benefits, but its development has been at odds with expectations at the time of privatisation. In particular, effective competition has not caused regulation to 'wither on the vine', and be replaced with 'normal markets', subject to ex post interventions through competition law. This is not because of the (in)action of 'lazy old regulators' or because of any regulatory capture, but instead reflects the complexities of regulated sectors, their underlying economics, market structure, conduct and technology, as well as in the legislative and policy framework. Regulators can and do use competition law tools and we recognise that it is important for the health of the regime as a whole that we do. But where markets are being opened to competition the ex ante regulatory tool kit is important. And even where competition exists it may still be the case that ex ante regulatory tools provide surer, quicker benefits for consumers, and an important mechanism for securing much needed new investment. That said, it is important that we continue to make the case for economic regulation, and it is important that the regime should continue to adapt and evolve. We conclude by setting out how the formation of the UK Regulators' Network will help in doing this.