The Coal Question (Routledge Revivals) by Fine Ben;

Author:Fine, Ben;
Language: eng
Format: epub
ISBN: 1181126
Publisher: Taylor & Francis Group

This, then, is the ideological background of the economist who was to be appointed to the Monopolies and Mergers Commission and, in May 1989, it was announced in Parliament that he had been chosen to be the future Director General or Regulator of the privatized Electricity Supply Industry — at an undisclosed salary and after a reputed world-wide search. He had previously advised the Government on electricity privatization (payment forming part of a? million bill, as disclosed by the Energy Select Committee (1987–88b)) and had written Government policy papers on the privatization of British Telecom and the Water Authorities (Littlechild 1983 and 1986 respectively). For the former, it was argued that regulation would be temporary until such time as the industry became competitive. The presumption, without justification, is that public enterprise is less efficient than the rest of private industry which it will come to match after privatization through the passage of time (p. 28). Consequently, on all criteria of performance other than temporary monopoly profits until competition comes along, no regulation is judged to be the preferred policy. In the meantime, regulation, over and beyond security of supply as guaranteed by legislation, is restricted to loose price control (p. 7):

Competition is indisputably the most effective means — perhaps ultimately the only effective means of protecting consumers against monopoly power. Regulation is essentially a means of preventing the worst excesses of monopoly; it is not a substitute for competition. It is a means of ‘holding the fort’ until competition arrives.

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