Policy paper

Economic regulation policy

This policy paper sets out the government’s vision for modernising the economic regulation of the utilities sectors.

From:
Department for Business and Trade and Department for Business, Energy & Industrial Strategy
Published
31 January 2022
Last updated
221 NovemberJune 2023 — See all updates

Documents

Economic regulation policy paper (PDF)

PDF, 384 KB, 26 pages

Economic regulation policy paper (accessible webpage - HTML)

HTML

Details

Update: 2217 NovemberJanuary 2023

WeThe havereview nowof launchedeconomic ourregulation consultationannounced –in Smarterthe RegulationJanuary Strengthening2022 policy paper is under way.

As the original paper set out, the review will look into the economic regulation of the energy, water and telecoms sectors, including:

  • regulators’ duties
  • how regulators can enhance competition and innovation
  • how respective regulatory appeals processes work

In addition, it will now also consider:

We aswill regulatedengage bywith Ofgem,government Ofwatdepartments, regulators, academics, businesses and Ofcomother interested parties over the coming months to help inform policy proposals. If you would like to be involved in the review, please email economicregulation@beis.gov.uk.



Update: 1 June 2023

The consultationSmarter willRegulation closeto Grow the Economy policy paper, published on  1710 JanuaryMay 2024. 2023, set out the importance of economic growth. We welcomewill responsesconsider fromhow allOfcom, individualsOfgem orand organisationsOfwat withcan anpromote interesteconomic ingrowth when we publish a consultation paper on the review of economic regulation in the energy,coming watermonths.

This and/orpaper is about the future of economic regulation of the water, energy, and telecoms sectors.sectors Youin canthe respondUK. toIt follows a commitment in the consultationgovernment’s via: National Infrastructure Strategy to produce an overarching policy paper in this area.

Online:The Qualtricsgovernment agreed with the National Infrastructure Commission’s recommendation that, though the UK’s regulatory framework has delivered significant benefits, it needs updating and strengthening as it is increasingly facing emerging and long-term challenges that it was not designed to address.

Email:The economicregulation@businessandtrade.gov.uk paper covers the following areas:

Write

  • how to:the Economicgovernment Regulation, Departmentintends to ensure that the regulators’ duties will allow them to meet these systemic challenges, conducting a review of duties
  • how the government will provide strategic clarity on our long-term aims for Businessthese sectors, publishing a letter of strategic guidance to the CEOs of Ofwat, Ofgem and Trade, Ofcom 2nd
  • how Floor, Oldcompetition Admiraltyfor Building,strategic investment opportunities can be enhanced for the long-term benefit of consumers and investors
  • how transparency and consistency in key processes can be improved, in particular seeking greater consistency, and working towards a common methodology, where appropriate, for the weighted average cost of capital when setting price controls
    • London, SW1A

The 2AYpaper is the first step to updating our model of economic regulation. We will launch a consultation setting out more detail on a package of measures to ensure the UK model of economic regulation fits the needs of the modern age.

Related content

Open letter of strategic guidance to the utilities regulators.