Realities of regulation

Wednesday 30th December 2009, 2:30PM GMT.

AN ATTEMPT by a member of the Policy Council to force a States debate on the extent to which Guernsey Post should face competition is an indication of how this matter is close to becoming a Christmas pantomime.

The justification for the minister’s intervention is that the Office of Utility Regulation had the ‘arrogance’ to ignore a letter from the Policy Council inviting it to hold off diluting the postal monopoly.

What that approach overlooks, however, is the fact that the regulator has a statutory obligation to act in these areas and that obligation was imposed by the States at the same time as it acknowledged that GPL would be opened up to competition.

And what if this does get to the floor of the Assembly? Ultimately, its decision is secondary to any judgement from the Royal Court should GPL seek to have the OUR’s final decision overturned or amended.

Beyond that, the consultation process that has already been carried out reveals that Commerce and Employment is profoundly unhappy with the performance of GPL and its relationship with some of its key customers.

Treasury and Resources, in contrast, is worried more about GPL remaining profitable than it is about anything else.

Whether the OUR has adequately balanced frequently conflicting interests is ultimately a matter for the courts but the reaction to regulation and competition has implications for the future.

The States decided in July to create a Competition and Consumer Authority with its own director-general based on a restructuring of the Office of Utility Regulation and costing an extra £400,000 because of the benefits that would bring.

Yet when independent focus, free from political interference, is brought to bear, ministers and other members start getting anxious.

The reality is that politicians – or islanders, come to that – cannot have it both ways. Either competition and regulation issues are delegated to expert and impartial bodies, or they are not. There is no halfway house.

And for those concerned that Guernsey Post will be damaged by too much competition, there is another reality.

Regulators who get it that badly wrong do not survive – and the OUR knows that.

1
Dave Jones

December 30, 2009 at 5:43 pm

Looking at this comment online it is remarkable for its ignorance of what is actually taking place. In the first instance I had questioned the wisdom of what the OUR was doing as regards GP several months ago, not as you imply simply because they ignored the letter from the Policy Council, although I have to say that has not helped. The justification for my intervention is the same now as it was then, the putting at risk the financial stability of a much loved local utility and I have to say I am in good company as T&R hold many of the same concerns. Not to mention possible job losses of local men and women who do a first class job for this community and who helped build this company.
It is true that the Regulator does have a statutory obligation to act as far as the regulated utilities are concerned. What the regulator does not have the right to do, is to jeopardise the viability as whole of a company owned by the people of Guernsey.
The point of bringing this issue to the assembly is for the States quite legitimately to give their view on the matter, there is no higher legislative body than the States and if members believe that the OUR are putting this company at risk with the ultimate possibility that the States Treasury will have to bail it out, then it is most properly a matter for us.
As for your comment that “when independent focus, free from political interference, is brought to bear, ministers and other members start getting anxious” I say this to you. The regulator draws his legitimacy from powers conferred upon him by the States of Deliberation: they can be withdrawn, extended or amended by the Assembly at any time. The States has ultimate control of the OUR and Guernsey Post if we choose to become involved, the Reserved Area will be whatever we say it is!
Just to take this a little further I also don’t think having the Requete debated, would constitute retrospective action either, so far the regulator has only announced his decision; as I understand it, it does not take effect until 1st April, 2010 (an apt date for foolish decisions). Any amendment of the new terms of GP’s licence can occur before 1st April without it being retrospective action. As an example, a prayer for the Requete which proposed that the reserved area should remain unchanged pending a comprehensive States debate on the future of utility regulation would I believe be perfectly acceptable. You say that islanders and politicians can’t have it both ways and to use a pantomime chant Oh! Yes we can, we can have profitable and well run efficient utilities together with light touch regulation, which is what the States thought they signed up to in the first place. The OUR is a relatively young organisation and the supreme legislative power of the States can tweak it anytime it chooses that’s how democracy works you never surrender the power of the people through their elected representative’s to anyone however impartial or expert they may be. We are elected to protect and safeguard what is owned by the people of Guernsey not put these things in our charge at risk by doing nothing.

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2
Roy Bisson

December 31, 2009 at 5:39 pm

Before being elected one might have expected Dave Jones to have a slightly different attitude towards the reports produced by the OUR:
“Why has Guernsey Electricity been allowed to charge islanders too much in order to build a vast (£16m) cash chest? Give it back!”
“Who let Guernsey Post waste over £1m going down a ‘banking’ blind alley – MD and T&R resign!”
Oh well, no doubt the steam will blow away quite soon as it has done in the past, and some new folly will take centre stage.

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3
Dave Jones

January 2, 2010 at 8:53 am

First of all Roy I never wanted the OUR in the first place or the “commercialisation” of any of our utilities so my views have never changed either before the election or after it. I said at the time that there was absolutely nothing in it for the people of Guernsey and far from saving Guernsey people millions it has led only to higher prices and reduced services.

My very first manifesto in 2000 said this, “I will ask the questions that you want the answers to and I will challenge any policy that I do not believe has the best interests of local people at heart. What we need now are deputies who will speak on behalf of the ordinary Guernsey people who in my opinion have not always had their views listened to or represented in the past”

In 2004 my manifesto said this.” The commercialisation of our Electricity and Postal services together with the sale of Guernsey Telecom’s in my opinion has been a disaster for the people of Guernsey, resulting in worse services and higher prices, the very thing we were assured would not happen. I would support any move to bring the Islands vital utilities back under States control, returning accountability of their management back to the people of Guernsey, through their elected representatives.

My views did not change in 2008 and I continue to defend those views on behalf of our people. If I have got it wrong then the people of Guernsey will decide that too ,just as it should be but I will at least have spoken up for those who think the OUR have got it badly wrong. It is our job as the islands government to safeguard these utilities on behalf of the people who own them, the Guernsey public. Not sit idly by while decisions are made that put the financial viability of something we own put at risk. As I say if I have got it wrong then the States will throw out the Requete but at the very least we have a right to discuss it.

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