Select Committee on Constitution Minutes of Evidence

Examination of Witnesses (Questions 898 - 899)




  898.  Sir Derek, welcome. We are very grateful to you for being with us this afternoon. I am sorry we are running a little late because of our taking evidence from Sir Howard Davies. Before we get under way, for the record would you like to introduce yourselves?

  (Sir Derek Morris) Thank you, my Lord Chairman. On my left is Brian McHenry, who is the Chief Legal Adviser to the Competition Commission. On my right is Robert Foster, who is the Chief Executive of the Commission. I am Derek Morris, the Chairman.

  899.  Is there anything you would like to say by way of introduction?
  (Sir Derek Morris) If you will permit me, there is perhaps one point that I would like to make at the beginning. The area in which you are interested is one that has been examined in some depth by a number of bodies, not necessarily to any great effect, and I welcome the fact that your Committee is looking into this. These investigations, and I believe your own, do focus on processes and accountability in relationship with different institutions in the regulatory field, and that is, of course, extremely important. The point I want to float to you is that in my view at least part of this debate is also about substance, about the actual impact and effectiveness of regulation. Regulation in its broadest sense has a real purpose and in the areas which most impact on the Competition Commission that is about avoiding exploitation of positions of market power that cannot be dealt with by the usual forces of competition. It is natural that the companies who are regulated as a result of that will find that unpleasant; they will tend to resist it, and that is perfectly understandable and there is a healthy tension there, but I do sense sometimes that that leads to often reiterated complaints that regulators are unaccountable, that they are arbitrary, that the only way to deal with such and such a problem is "a nuclear option", one of the issues we will come to later; "What we really want is fast track", and so on. All those are very understandable. My worry is that if you put them all together, each individually reasonable, you can very rapidly degrade the effectiveness of the regulatory regime and in my view—and this is not in any sense a criticism—at least part of the agenda is not purely about accountability, etc. It is about trying to lighten regulation and therefore to some extent to oppose the purposes of regulation, and I hope that in your deliberations you might want to bear that thought, if you find it persuasive, in mind.

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