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Legislative and Regulatory Reform Bill

My words shall follow closely and appropriately from what the noble Lord, Lord Borrie, has said. He singled out the word ““wishes””. I give a case in point. What is popularly known as Ofgem is rightly referred to here as the Office of Gas and Electricity Markets. When electricity prices went down to the point where a number of generators were going bust—including, of course, British Energy—I raised with the then chairman of Ofgem, Callum—laterSir Callum—McCarthy whether he was paying enough attention to an amendment in the Utilities Act 2000, which I proposed in this House and was carried with a majority of two, to impose on that body an obligation to have regard to the long-term stability of the industry. I asked him how he could justify what he was doing, forcing the prices down to the point where firms were going bust and not paying attention to what was in that Act. I have quoted his answer in the House before, and he has never denied it. It was at a semi-public occasion at the Institute of Economic Affairs. He said, ““I recognised that Ministers did not want that clause, and I have therefore not paid too much attention to it””. I regarded that as a shocking thing for a regulator to say. But it illustrates the point of my noble friends and the noble Lord, Lord Borrie, that there is always a temptation, either on the part of Ministers to let it be known what their wishes are, or on the part of regulators who try to divine what the Minister’s wishes might be. I yield to no one in my determination that regulators should be wholly independent of both influences. The relevance of the Bill is that Ministers should not be able to influence the regulator by the order-making procedure under the Bill. In case the Minister is going to argue that this fear is unreal because nobody would do that, I quote the example of Sir Callum McCarthy. Of course, the Government opposed the clause. The noble Lord, Lord McIntosh of Haringey, argued fiercely against it, but he lost the argument in the House, and it is in the Act. It is very important that we should take whatever steps we can in this Bill to strengthen and reinforce the independence of regulators.