The government has given just four weeks to respond to a consultation by the Department for Business and Trade that would place a new ‘economic growth’ duty on energy regulator Ofgem, as well as on water regulator Ofwat and telecoms regulator Ofcom.
The industry is being asked to respond before a further consultation that will revise statutory strategic and operational guidance for the ‘growth duty’, within which regulators will operate. The new guidance will include “the proper consideration that must be made before allocating resources, setting enforcement policies, and making sanctioning decisions.”
Following the ‘ Smarter Regulation to Grow the Economy’ policy paper, which was published in May 2023, DBT said it also intends to consult on reforms to the three economic regulators. It will ‘revisit’ their duties and may rationalise them to ensure activity is focussed on key priorities.
DBT said the government was “committed to boosting growth and easing the cost of living” and that over 40 regulators are already subject to the duty.
The growth duty establishes that any person exercising a regulatory function must have regard to the desirability of promoting economic growth in carrying out that function. They must “consider the importance for the promotion of economic growth of exercising the regulatory function”, take action “only when it is needed” and make sure action taken is “proportionate”.
The consultation comes as the current Energy Bill is set to place a Net Zero duty on Ofgem. DBT wants growth to have the same weight as Net Zero when it is factored into decision-making.
The department noted that it is also consulting on a new Strategic Position Statement for energy policy, which “has a strong growth focus. For example, it requires Ofgem to have regard to ‘addressing undue barriers to entry, growth and innovation’” and ensuring networks are built “at scale and pace, ahead of need”.
Responses to the consultation are required by 17 August.
Read the full consultation here