Principles for Economic Regulation
Following announcements in the Budget and the Plan for Growth, the Government has published an overarching set of Principles for Economic Regulation.
Principles for Economic Regulation (PDF, 111 Kb)
The purpose of these Principles is to:
- reaffirm the importance of, and the Government's commitment to, stable and predictable regulatory frameworks to facilitate efficient investment and sustainable growth;
- set the framework for delivering greater clarity about the respective roles of Government regulators and producers, and greater coherence in an increasingly complex and interlinked policy context; and
- set out the characteristics of a successful framework for economic regulation to guide policy makers in assessing future developments.
In addition, the Government is setting out a series of high level commitments to ensure these Principles are enshrined in Government's policy-making on economic regulation.
Stakeholders have confirmed the need for Government to set out a clearer policy and strategic context in which independent economic regulators, consumers and investors can take informed decisions, and for Government to exercise restraint when making changes to this context.
The Principles of Economic Regulation and the commitments are therefore focused on Government's actions. Their aim is to guide the high-level institutional design of the regulatory frameworks by the Government.
The Principles are not intended to replace the existing five principles of good regulation initially defined by the Better Regulation Task Force in 1997 and which state that any regulation should be transparent, accountable, proportionate, consistent and targeted. These continue to be relevant to how regulatory obligations are designed and enforced by regulators and Government and have a statutory basis in the duties of certain regulators.
The Principles for Economic Regulation are instead intended to articulate the factors that are key to the high level design of the frameworks for economic regulation, not to guide detailed application of regulators' judgment in carrying out their functions.
The scope of these Principles is the economic regulation of infrastructure sectors overseen by Office of Communications (Ofcom), the Postal Services Commission (Postcomm), the Office of Gas and Electricity Markets (Ofgem), Water Services Regulatory Authority (Ofwat), the Civil Aviation Authority (CAA) and the Office of Rail Regulation (ORR).