The Politics of Regulation: Privatized Utilities in Britain

184 Pages·2001·0.635 MB·English

by  Alison Young (auth.)

The Politics of Regulation
Also by Alison Young
THE FIXERS: Crisis Management in British Politics (with Trevor Smith)
The Politics of Regulation
Privatized Utilities in Britain
Alison Young
Research Fellow
Centre for Management under Regulation
Warwick Business School
Warwick University
© Alison Young 2001
Softcover reprint of the hardcover 1st edition 2001 978-0-333-92750-2
All rights reserved.No reproduction,copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced,copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright,Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency,90 Tottenham Court
Road,London W1P 0LP.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
The author has asserted her right to be identified
as the author of this work in accordance with the
Copyright,Designs and Patents Act 1988.
First published 2001 by
PALGRAVE
Houndmills,Basingstoke,Hampshire RG21 6XS and
175 Fifth Avenue,New York,N.Y.10010
Companies and representatives throughout the world
PALGRAVEis the new global academic imprint of
St.Martin’s Press LLC Scholarly and Reference Division and
Palgrave Publishers Ltd (formerly Macmillan Press Ltd).
ISBN 978-1-349-42536-5 ISBN 978-0-333-97812-2 (eBook)
DOI 10.1057/9780333978122
This book is printed on paper suitable for recycling and
made from fully managed and sustained forest sources.
A catalogue record for this book is available
from the British Library.
Library of Congress Cataloging-in-Publication Data
Young,Alison.
The politics of regulation :privatized utilities in Britain /
Alison Young.
p.cm.
Includes bibliographical references and index.
1.Public utilities—Deregulation—Great Britain.
2.Privatization—Great Britain.I.Title.
HD2768.G74 Y68 2001
363.6'0941—dc21
00–053045
10 9 8 7 6 5 4 3 2 1
10 09 08 07 06 05 04 03 02 01
For my mother
This page intentionally left blank
Contents
Preface viii
List of Abbreviations x
1 From Nationalization to Privatization 1
2 Regulators at Work 25
3 A Fair Deal for Consumers? 53
4 Monopoly and Competition 80
5 The Regulators and Parliament 107
6 The Impact of Environmental Policies 130
7 ‘Governments in Miniature’? 149
Notes 157
References 161
Index 169
vii
Preface
The privatization of utilities was a major innovation in British politics
and both the principles and the implementation have been the subject
of vigorous debate since 1984 when BT became the first state-owned
utility to be sold off. The passing of a new Utilities Act in 2000 marked
the end of a preliminary phase that has witnessed much public criti-
cism but ultimately seen a measure of acceptance.
This book attempts to analyze the rationale for returning the nation-
alized industries to private ownership, the activities of the regulators
who were appointed to oversee them and the mechanisms put in place
to ensure accountability. The emphasis is on the politics of regulation
and a narrative is presented of the main events that illuminate this
process over the period since privatization. Greater stress on consumer
issues developed gradually, but there were several episodes in which
consumers were dramatically failed by the privatized companies. The
MMC, now the Competition Commission, played an important role in
establishing the RPI(cid:2)X formula, introducing competition and the
establishing the accounting disciplines which underlay economic regu-
lation. Parliamentary select committees tried, though without notable
success, to improve accountability. The problems of integrating envi-
ronmental policy came increasingly to the fore. Some areas receive
briefer treatment – telecoms for instance, where both the regulator and
the industry have for several years asserted that their business was not
a utility. The rail industry, presenting a very different range of prob-
lems, is excluded altogether. Similarly, no coverage is given of the
European input to regulation or the influence of financial institutions.
Though the emphasis is on politics, those who seek a more economics-
based approach will find plenty of sources in the references.
I have been fortunate over the last three years to be a Research
Fellow at the Centre for Management under Regulation at Warwick
Business School. During the writing of this book the encouragement
and support of the centre’s Director, Professor Catherine Waddams, has
been invaluable. I would also like to thank all my colleagues at the cen-
tre, especially Lin Fitzgerald, Catherine Mitchell and Diane Sharratt, for
their advice and help.
viii
Preface ix
I would also like to thank Morten Hviid, Patrick Law, Michael Doble,
Graham McKie and Alex Young all of whom commented on var-
ious chapters. I am grateful to all of them, but especially to my
husband, Charles Young, for his help and forbearance over so many
months.