New regulatory framework proposed

Feb 28 2013

A new streamlined system of regulating various industries has been proposed for an independent Scotland.

A paper from the Scottish Government sets out how one or two bodies could be set up to oversee energy and telecommunications, postal services, water and rail. Such a set-up could benefit both businesses and consumers, as well as saving money for the public purse, ministers say.

Finance Secretary John Swinney unveiled a discussion paper on the issue at a meeting with business leaders in Stirling. He said: "Instead of simply replicating UK organisations, with independence we can make sure we have systems that are the right size and offer the right services for Scotland.

"The benefits of our proposed approach will extend across all sectors. Industry will have fewer regulatory bodies to deal with, consumers could have a single port of call for their concerns and there will be greater stability and consistency in regulatory decisions.

"A combined regulatory body will use resources more effectively and flexibly, creating savings for the public purse. It will provide a single and stronger voice on competition and economic regulation and raise Scotland's profile on these issues on the international stage."

A separate paper on regulating financial services will be published later this year, with another paper planned for the oil and gas industry. The water industry is already controlled in Scotland, while regulation of other industries is done on a UK-wide basis.

The Scottish Government paper highlights lower water bills in Scotland, with people paying on average £50 a year less for water and sewerage services in 2012-13 than in England and Wales.

The "proven track record in this sector demonstrates that we can deliver an effective, innovative and world-leading regulatory framework that better meets the needs of the Scottish people".

One option is to set up a body to take on the roles of the Office of Fair Trading (OFT), the Competition Commission and the economic regulatory functions for energy, telecommunications, postal services and the water and rail sectors. Alternatively there could be a combined utility regulator, responsible for energy, telecommunications, water and rail, with a separate competition authority taking on the responsibilities of the OFT and the Competition Commission.

Having a combined regulatory body could see annual savings of £10 million, as such a system would be between 10% and 20% cheaper than having several different bodies, according to the Scottish Government paper.