Hunt regulator meeting: Fear of “stitch up” over revolving door between regulators and firms

27 Jun 2023

EMBARGO: 22:30 Tuesday 27th June

Liberal Democrats urge the Chancellor to tell regulators to “get their own house in order before investigation profiteering”.
Investigation by the party found links between senior directors at water firms and Ofwat
Liberal Democrats call for an investigation to be carried out by the Advisory Committee on Business Appointments

Ahead of the Chancellor’s meeting with Ofgem, Ofwat and the CMA tomorrow, the Liberal Democrats have raised fears of a “revolving door” between the regulators and profiteering firms. The party has warned of a “stitch up” amid fears of a “cosy club” in energy and water industries.

Recent investigations by the Liberal Democrats have revealed at least one of these regulators has a “revolving door” with water firms. Freedom of Information Requests and Parliamentary Questions submitted by the Liberal Democrats found Ofwat keeps no records of employees who previously worked for water firms.

Research by the Liberal Democrats has found the Director for Regulatory Strategy at the country’ largest water firm, Thames Water, was previously an Ofwat employee. Meanwhile, a senior Principal at Ofwat, moved directly from Thames Water where they worked on market development. The party has also found links between Ofwat and Southern Water, Northumbrian Water and South West Water, including directors who work on regulation.

There have also been fears raised around Ofgem. OpenDemocracy reported last year that Ofgem’s Director responsible for the price cap had worked with British Gas owner Centrica when they sued the regulator for £70 million. The court case was about the firm being penalised by the price cap rules.

The Liberal Democrats are calling on the Advisory Committee on Business Appointments to investigate a possible “revolving door” and if that could have an impact on prices.

Liberal Democrat Cabinet Office spokesperson Christine Jardine MP said:

“It would be a scandal if the public are being ripped off by profiteering firms because the regulators aren’t fit for purpose.

“I fear we may now have a revolving door between companies, the regulator and even Government agencies. We can’t have a cosy club in these industries when the public is facing record prices.

“We could have a situation where regulators treat their former employers favourably. Or profiteering firms hire ex-regulators to avoid new rulings. Both of these situations would hurt the consumer.

“The Chancellor should tell them to get their own house in order before investigating profiteering. We can’t have a stitch up which allows these firms to get away with ripping off the public.”

ENDS

NOTES TO EDITORS

Fears ex-BP and British Gas bosses could ‘sway’ government energy policy - OpenDemocracy

Parliamentary Question tabled by Tim Farron
https://questions-statements.parliament.uk/written-questions/detail/2023-05-23/186396/

Freedom of Information response from Ofwat

Freedom of Information Act (FOIA) 2000 - Request for Information

Reference: FOI 202303042

Dear [REDACTED]

Thank you for your request for the following information.

The number of staff at Ofwat who have previously worked for a water company? E.g Thames Water, United Utilities ect

We can confirm that we do not hold this information.

We trust this information is helpful to you. Please see the Annex for additional information on

our FOI/EIR processes and your right of review.

Yours sincerely,