Memorandum by John Swift QC, Rail Regulator
My evidence to the Select Committee follows
the sequence of the Questions set out in the Call for Evidence.
As requested I have included a short summary of the main submission,
which follows this Introduction. Annex A contains a brief CV and
summary of the activities of the office of the Rail Regulator
between 1993 and 1998. as a result of my taking on that task I
have retained a particular interest in the transport sector and
the responsibilities of the Government, the Strategic Rail Authority
and the Regulator but my evidence is directed to the issues more
It may assist the Select Committee to know where
I stand on the broad issue of the accountability of the Regulators
to Citizens and Parliament. I believe that the citizens of this
country, whether or not they choose to participate actively in
the democratic process, benefit directly and substantially from
the statutory duties placed on regulators to promote or protect
their interests. Just as the purpose of the new competition laws
is to drive out anti-competitive and exploitative conduct to the
benefit of competition and of consumers so the earlier structure
based on direct enforcement of licences to promote the public
interest has aimed at a similar objective.
Secondly, I believe that the constitutional
innovation of the mid 1980's, to separate the regulator from the
Whitehall machine and to devolve decision making powers on a person
not subject to Ministerial control and not directly accountable
to Parliament, needs to be rethought: not in the sense of subordinating
the regulator to the Secretary of State, for that would imperil
independence, but to recreate a more direct relationship between
Parliament, to whom the regulator owes his existence and his statutory
powers, and the regulator.
The obligation to make an Annual Report to the
Secretary of State, to give evidence to a Select Committee on
some matter of concern to that Committee, to conduct the business
of the Office according to the highest standards of public administration
and to be subject to judicial review for all decisions affecting
the rights of individuals and corporations are essential aspects
of accountability. But there is no clearly stated constitutional
status for a regulator, unlike the judiciary, and unlike the duty
of a Minister to account to Parliament for his own conduct or
that of his department. Yet the regulators are part of Government.
In 1882 the great constitutional historian F
W Maitland said that "we are becoming a much governed nation".
Regulation is part of the process of government, not simply because
Government has transferred powers which had in the past and would
otherwise have been exercised by Ministers but because any form
of regulation which takes effect other than through the application
of general legislation is based for its legitimacy on some form
of contract between undertaking and Government. The licence to
engage in conduct otherwise prohibited is such a contract and
so long as the Government controls entry into a sector of the
economy by the grant of licences regulation in one form or another
will be part of Government.
Power in few hands is a danger to the democratic
process and the political economy. And regulators with much power
and little accountability can do grievous harm to the body politic
and to the industries they are regulating. The motive of consumer
protection is excellent in any organisation; but its pursuit as
a single minded goal can unless handled with considerable care
upset the applecart and deprive the regulated bodies of the kind
of protection which they themselves need when they shoulder the
burden of securing the investment in necessary goods and services.
These concerns are not new. They surfaced in the early 1990's.
but they will not go awayprecisely because the position
of the Regulator is one that demands continuing scrutiny.
I therefore welcome the opportunity of giving
evidence to the Select Committee. I believe that there is scope
for improving accountability without adverse effect on the efficiency
with which regulators carry out their statutory functions.
The independent regulator was an
innovation in the mid 1980's brought in to play a part in the
control of performance of the privatised utilities when there
was serious concern as to whether the State had made a grievous
error in transferring responsibility for the performance of vital
parts of United Kingdom industry into private hands.
Since the mid 1980's three developments
stand out. First, the concept of independent regulation is accepted
as an important part of the legal system and the economy: the
regulator's duty to pursue the public interest rather than merely
to arbitrate as between conflicting private interests is an important
constitutional safeguard in the control of market power. No one
seriously wants to return to the grey area of Whitehall regulation,
fudge and incompetence.
Second, Government disengagement
from the day to day business of controlling and supervising the
utilities has proceeded in parallel with Government enthusiasm
for new legislation designed to bring the disciplines of the market
economy into industries formerly characterised by massive monopoly.
Third, and connected with the second,
the liberalisation of most sectors of the economy, in which the
State no longer prohibits entry, and the enactment of far reaching
competition laws calls in question the traditional role of the
regulator as first established, as the guardian and enforcer of
the licence granted by the State as a permit to enter.
The issue of regulatory accountability
has been a constant theme and a source of continuing concernnot
so much to the constitutional theorist but to those genuinely
concerned as to the substantial power and discretion conferred
upon the "unelected" individual and to his ability,
if he gets things wrong, to do serious damage to the interest
of consumers and those he regulates.
The fact that as a result of the
sweeping changes to industrial structures and to competition law
the areas of real monopoly power in single hands are relatively
few takes some of the edge of this concernbut the emergence
of the mighty OFCOM and the critically important role of OFGEM
in the energy markets do not suggest any dwindling of resources
in this area of Government. OFWAT remains as the regulator of
the monopolies in water and waste disposal. The Office of the
Rail Regulator shares aspects of regulation with the Strategic
Rail Authority but is still active in its tenth year. And the
Civil Aviation Authority exercises its statutory powers under
the Airports Act 1986.
It cannot therefore be denied that
accountability of regulators continues to be a live issue from
the point of view of constitutional legitimacy and economic power.
And the principal reason is that
the independence of the regulator, which is a necessary defence
against usurpation of powers by the Executive, is itself a privilege.
A regulator cannot claim at the same time independence and immunity
from accountability. Otherwise we have a "democratic deficit"
which is not remedied by conduct however, much the regulator improves
in the areas of competent administration, good judgement in decision
making, and due process, including transparency.
Nor can accountability within a democracy
be defined as limited to a duty to give reasons and explain. The
essence of accountability is answerability.
Thus accountability to the public
through a greater degree of participation by Parliament in reviewing
the objectives, budgets and performances of the regulators in
the promotion of the public interest may be seen as a necessary
step in the direction of justification of independence without
1. What are the legal bases for regulators:
what are the nature of their powers and how do they exercise them;
how could their powers be revoked; from where do they obtain their
financial and administrative support?
Regulators are creatures of statute. Their powers
and duties are set out in the relevant statute by which their
office is established. Thus the startling innovation which conferred
powers on an elected individual with no accountability to the
Minister who appointed himto
regulate the affairs of a former nationalised industry was fully
debated in Parliament and approved; and not just for the telecommunications
industry where it was introduced in 1984; but also in the other
statutes which were enacted at the time of the privatisation of
the gas, electricity and water industries and, in 1933, in the
The schema of each of the statutes is similar.
A set of objectives is listed which may be broadly defined as
the "public interest". The regulator must exercise his
powers in the way in which he thinks is best calculated to promote
the public interest. He can influence the outcome by enforcing
the terms of the licence granted to the "privatised"
undertaking or through taking action to get the licence modified.
And he has the power to grant new licences.
Under this schema the role of the Secretary
of state is distinctly subordinate to that of the regulator. While
the objectives are largely common to the Government and the Regulator
the powers are generally limited to their exercise by the regulator,
at least after the Government has determined what the appropriate
post privatisation structure is going to be.
This separation of powers as between Government
and regulator has been critical to the way in which the "monopoly"
has been controlled: in terms of the application of the price
control formula and enforcement of prohibitions against discrimination.
But in the critically important area of liberalisation of markets
the relationship is more shared, obviously so where primary legislation
is required to change the post privatisation structure. Nevertheless
regulators have in general been in the forefront of promoting
sustainable competition and elevating it as a public interest
objective and a key priority for the regulators. The retail energy
market, for instance, has been totally transformed since the first
post privatisation compact between Government and the then licensees.
Primary legislation is required for any revocation
or diminution of powers. It would be a serious breach of the independence
of the regulator were any such revocation or diminution to be
sought through delegated legislation. More generally Ministers
baulk at the idea of introducing even through primary legislation
a duty to act in accordance with the requirements of the Ministerthe
wording appropriate to an executive agency but not to a regulator.
Indeed in the Railways Act 1993 the regulator
was placed under a duty for a period of three years from the commencement
of the Act to take into account any guidance from the Government
in respect of the exercise of his powersthe guidance was
indeed issued, and in a highly prescriptive form, but the governing
verb was no more and no less than "to take into account"which
I did, no more and no less. The Government, or at the very least
its civil servants, were concerned that once appointed the Regulator
could exercise his powers to frustrate the whole of the privatisation
process despite the fact that that was the purpose of the statute
under which the regulator had been established. I mention the
matter if only to demonstrate the acute concern felt by many in
Whitehall as to the transfer of power from Ministers to regulators
on issues affecting the running of the economy and in areas of
deep concern to consumers. I am sure the feelings have not gone
away. But in my experience Ministers were scrupulous in respecting
the independence of the regulator.
Subject to obtaining through Parliament his
"Vote" the Regulator has complete discretion as to whom
he employs. Ordinarily a Regulator's Office consists of employees
of the office, and thus civil servants since the Office is one
held under the Crown, other civil servants on secondment and outside
advisers. Although the Treasury takes responsibility for approving
or rejecting the regulator's budget, all expenses are covered
from levies on the licensees.
The regulator is the "accounting officer"
for the Office and subject to the scrutiny of the national Audit
Office and the Public Accounts Committee for the stewardship and
use of the funds deployed.
I know of no concern that the Treasury has deliberately
withheld funds so as to render the functions of any of the regulators
less effective. There is obviously a concern as to "value
for money" as with any regulatory function but, so far as
I am aware, no systematic means of measuring it.
2. By whom and how is the continuing need
for regulators measured: how is their role changed or ended?
I can answer the second part of the question
more easily than the first. On the first I would say only that
so long as the Government retains control over entry to utility
markets through the grant of licences, the Government must retain
the means of ensuring the accountability of the licensee to deliver
what the State is expecting. That is an obvious role for a regulatorto
bring the functions back within Whitehall would be to risk again
"command and control" by the executive with all the
attendant problems which led to the failure of the Morrisonian
corporation. But it remains an issue for Government.
On the second issue their role is being profoundly
changed through the legislative changes being brought about by
the Competition Act 1998 and the Enterprise Act 2003.
The Competition Act provides for concurrent
exercise of powers of the OFT and the utility regulators. The
convention is that in the relevant utility sector the Regulator,
and not the OFT, will exercise the powers conferred by that Act
to investigate cases of anti competitive agreements and abuse
of dominant position. The issue is this: what are the criteria,
which the regulator will apply in determining whether to exercise
Competition Act or licence enforcement powers? If the perceived
need for independent regulation in the mid 1980's stemmed from
the absence of sufficient powers under the Competition legislation
is must surely be the case that regulation in the old sense now
has to be reserved to those cases where the provisions of the
Competition Act are plainly unsuitable. The issue of price control
to remedy actual or potential excess prices is a particularly
sensitive issue. Despite the fact that EU law prohibits an abuse
of a dominant position and that such abuse may consist of unfairly
high prices regulators appear reluctant to go the Competition
Act route and prefer the more conventional route of licence enforcement
or amendment. One effect is that the licensee has no right of
appeal on the merits in the case of an adverse finding.
There will undoubtedly be "public interest"
issues arising from the conduct of a regulated firm which fall
outside the prohibitions of the Competition Act but the constitutional
question is whether those issues are so worthy of attention as
to require a full apparatus of regulatory control in each of the
A final point on the second issue relates to
the growing influence of EU law on the status of the domestic
regulators. To take telecommunications as an example the incoming
EU directives, in force in the United Kingdom since March 2002
and taking full effect in July 2003, prospectively repeal the
entire group of sections of the Telecommunications Act dealing
with licence enforcement and modification. What has stood since
1984 is now subsumed within the EU directives and the position
of OFTEL is transformed into that of a National Regulatory Authority
acting within the scope of the incoming directives.
In summary, roles are changing and ending, as
a result of major shifts in legislative direction over the form
of control over dominant firms and the importance of encouraging
greater liberalisation throughout the EU in the former state owned
3. Who are the members of regulatory bodies;
how are they appointed; are they adequately represented; do Nolan
These questions are directed to the situation
as it operates today and are, essentially, for Ministers and the
current regulators to answer.
The position that prevailed up to and including
my appointment as Rail Regulator was that the Secretary of State,
in my case Transport, advertised the job; there was a competition;
a panel of civil servants and advisors interviewed applicants
and came to a short list of two; that was followed by an interview
with the Secretary of State, Mr John McGregor, and the Minister
of State, Mr Roger Freeman.
At that time the individual was the regulatorthere
was no question of the appointment of a Board to exercise collective
responsibility. The buck really did stop with us as individuals,
no matter what form of delegation or internal processes of consultation
we used. From the outset I thought that we should establish a
group which would be responsible for de facto decision
makingin part to encourage my new colleagues, who were
the employees of my Office, to move from their traditional civil
servant advisory role to decision making roles but also to bring
in some outside experience on transport, economics, consumer affairs
and general expertise.
Thus Sir Wilfred Newton (former Chairman of
London Transport), Professor Stephen Glaister (now of Imperial
College, London) Ann Foster (formerly Director of the Scottish
Consumer Council) and General Sir Thomas Boyd-Carpenter came,
at my request, on to a new "Council of the Office of the
Rail Regulator" which served until I left office as the main
decision making unit within the Office of the Rail Regulator,
though its members were all anxious to remind me that the Council
was advisory only and that the Rail regulator himself was the
decision maker (and any other person to whom decision making was
properly delegated). I never regretted that decision. I found
their advice and constructive criticism invaluable.
4. What are regulators set up to achieve;
to what extent do regulators achieve their purposes without adverse
consequences; how is their effectiveness assessed?
Regulators should exercise their powers within
the four corners of the statute to achieve, in so far as they
can, the public interest objectives set out therein. Subject to
that broad objective I believe that "economic regulators"
called on to monitor and where appropriate impose controls on
the behaviour of licensees must act in order to promote economically
Inevitably a large amount of the time of the
economic regulators has been spent on the periodic price reviews
of the utilities. In this area I believe that sound and consistent
economic principles have been appliedand the Competition
Commission has not only been broadly supportive of the economic
analyses of the regulators but has provided a most authoritative
frame within which the regulators can act.
Looking at regulation in the round over the
almost 20 years since its introduction I would say that little
adverse effect can be identifiedeither in terms of consumer
welfare or licensee failure. The promotion of competition has
gone ahead without debilitating effect on the financial position
of the incumbents. In terms of sophistication of economic analysis
and the use of financial tools of measurement of cost capital
there will always be a risk that the economic theory of today
is abandoned tomorrow. The Competition Commission has a critically
important role to apply in that area; indeed the disciplines which
it has applied to the regulation of the utilities are now being
transferred to other parts of the economy where there is a perception
that high profits may damage the interest of dependent users.
The assessment of the effectiveness of regulators
has to be objective and conducted by reference to the statutory
objectives. In brief is there a casual link between the advancement
of the public interest and action taken by the regulator? Whether
the public interest is measured by the introduction of sustainable
competition in place of monopoly, by price controls which enable
the undertaking to increase profitability but only through major
improvements in efficiency, by improving the quality of service
standards the regulator must be in the thick of things to ensure
he makes his contribution but not so dominant in the process that
he assumes the mantle of the Executive, paralysing innovation
and creating a climate of expectancy or, worse, fear of hostile
action if the industry fails to deliver the regulator's goals.
In regulation the question is alwayshow do we get the right
results through the right way? Effectiveness is as much to do
with the second as the firstbecause ultimately the industry
must deliver the results for the benefit of the users and the
economy in general.
5. To what extent are regulators both prosecutors
and juries on an issue; what rights of appeal are there against
decisions made by regulators?
A regulator is in no different position from
a competition authority such as OFT. The regulator has to carry
out an investigation into whether there is a possible breach of
a licence, or a need for licence amendment, and then make a decision.
The OFT, or the regulator wearing his Competition Act cap, has
to carry out an investigation into whether there is a breach of
the Chapter I or Chapter II prohibitions of the Competition Act
and make a decision. Each may act on his own initiative or following
a complaint. The EC Commission is in a similar position.
The differences lie in the nature of the appeal.
Appeals from regulators are by way of judicial review: in other
words a process of review by the High Court on the normal grounds
for a challenge to a decision taking effect in public law. Appeals
from the OFT, or the regulator exercising Competition Act powers,
go in the first instance to the Competition Commission Appeals
tribunal and are in the nature of a rehearing: appeals then lie
to the High Court on a point of law.
6. How are regulators held to account by
Parliament; what other accountability do regulators have to auditors,
Government departments or other public bodies?
Parliament has conferred a special status on
the regulators, at least under the privatisation statutes by giving
them security of tenure during the period of their appointment.
Once appointed they can be dismissed only on the grounds of serious
misconduct or incapacityan immunity from Government discretionary
action if not from Government pressure.
A regulator who acts outside the four corners
of the statute or acts irrationally or without due process is,
of course, accountable to the courts. Indeed the "judge at
your shoulder" acts as an important discipline on the decision
However, judicial review is limited in its scope
and does not extend to an appeal on the merits. A regulator whose
decisions cannot be overturned on the grounds of irrationally
is in a better position than that afforded to the OFT under the
A regulator is accountable to Parliament in
the sense that he must answer a request from either House to appear
before one of its Committees and give evidence. He derives his
authority from statute and in my opinion cannot lawfully resist
such an invitation or summons. That is accountability in the sense
of explaining the reasons for a decision, whether or not the call
comes from the Public Accounts Committee following a report from
the NAO or from the Transport Committee or indeed from this Committee.
It is not accountability in the sense of being answerable to Parliament
for the discharge of functions since there is no constitutional
convention whereby Parliament sets the rules by reference to which
the regulator should be judged.
Indeed, absent charges of incapacity or serious
misconduct or misleading either House it seems to me that Parliament
should also allow a substantial measure of discretion to the regulator
on how he discharges his statutory duties while making it clear
if it thinks fit that criticism is appropriate.
Where I believe that there is scope for greater
accountability in the sense of being answerable to Parliament
is in respect of the Vote and the assumptions underlying the expenditure
of funds. A critical appraisal of the budget in terms of the regulator's
objectives followed by an assessment of performance by reference
to those objectives would seem to me to fill a gap in the present
7. How are regulators accountable to those
whom they regulate; what is the impact of regulation on the economy;
how transparent are their methods of working?
Again I split accountability into aspects of
answerability and a duty to explain. A regulator is not answerable
to the licensee otherwise than through legal process and on grounds
recognised by the common law; essentially errors of law in the
application of the statute, irrationally, lack of procedural fairness
and lack of proportionality.
But there is plainly a duty to explain to the
regulated firm what are the objectives of the regulator, how they
relate to the business of the regulated firm and what the regulated
firm is expected to do. In a sense this is pre-decision good practice
and goes to the issue of transparency.
Regulators differ in the distance they keep
between themselves and the regulated firm. But they must abide
by minimum standards of clarity of communication so that the regulated
firm can know where it stands and to what if anything it can object
and make representations. The licence, of course, representing
the contract between the State and the regulated firm provides
the licensee with the basic right of conducting its business without
further regulation. If the regulator proposes a licence amendment
with which the regulated firm disagrees the matter has to go to
the Competition Commission for separate review and report back
to the regulator.
The perceived lack of transparency was a serious
issue in the early 1990's prompting a full inquiry by the NAO
into the working of the four utility regulators. There had been
a "Whitehall" type reluctance among some regulators
to disclose what they had in mind in case it might be thought
to be fettering their discretion. This laudable attempt to keep
within the bounds of administrative law had unfortunate results
in bringing in unpredictability and thus a high degree of regulatory
risk. The concern was such that in 1993 an additional duty was
placed by Parliament on the Rail Regulator to enable the regulated
firm to plan for the future with a reasonable degree of assurance.
I believe that transparency in the process of
consultation and in the giving reasons for decisions is now regarded
by regulators as a necessary feature of good administration and
does not require legislative change to require or enforce it.
Question 7 also raises questions as to the impact
of regulation on the economy. I believe that taking the utilities
together the effect of regulation has been to improve productive
efficiency at the level of scale monopoly and in a shared and
relentless drive to liberalise markets bring the benefits of competition
in innovation, price competition and choice. The macro economic
effect in taking the burden of financing from the state and transferring
it to the private sector, including the US, and European corporations
and institutions, also appears to have been positive, when combined
with regulation to ensure that users pay no more than the appropriate
cost of capital and that capital spend is audited by the regulator.
In brief I believe that generally this has been a substantial
UK exportable success.
8. How are regulators accountable to the
public otherwise than through Parliament; what opportunities do
the public have to express particular concerns to regulators;
how do regulatory bodies relate to their associated consumer watch
Regulators are not and in my view should not
be accountable in the sense of answerable to the public at large
or to individual citizens save to the extent that there is some
cause which an individual or class of individuals wishes the regulator
to take up on their behalf and he refuses: in those circumstances
the citizen has the right to apply to bring proceedings for judicial
review or to bring proceedings before the Competition Commission
Appeals tribunal requiring him to take action, assuming he has
the appropriate legal interest.
However, in the less legal sense of accountability,
including the duty to explain, I believe that good regulation
requires full disclosure to the public of matters of regulatory
concern. Regulators have to draw up priorities but I believe that
"visibility" is a priority so that the regulator is
seen to be on as it were the right side of the fence in the control
of monopoly power. At the same time the regulator is not proxy
for the Consumers Association or other body set up for the prime
purpose of representing the interests of consumers: the regulator
has to balance various statutory objectives and arrive at what
he believes to be the right decision even if that proves unpopular
with the public at large or with particular individuals.
From my own postbag I know that the public valued
the opportunity of registering with the regulator their concerns
over railway matters generally and their own experiences in particular.
They formed a valuable source of intelligence and all letters
were responded to within a tight timetable which we set for ourselves.
Between 1993-98 I had the responsibility for
appointing members of the various rail consultative bodies throughout
Great Britain. This was an important part of the statutory responsibilities
for the users committees had to achieve credibility within their
own areas. We maintained close relations with them, financed them
but left them complete autonomy in what they said and to whom.
After 1998 the Secretary of State, Mr John Prescott, decided that
they should form part of the responsibilities not of the Rail
Regulator but of the Strategic Rail Authority, the executive agency
which took over the functions of the Franchising Director, where
they now reside. That change was made through the Transport Act
2000. I have no knowledge of how well they fare or how they now
relate to the Rail Regulator.
9. How effective is public consultation by
regulators; what opportunities do the public have to contribute;
to what extent do the public make use of these opportunities?
These are questions which the current regulators
are better able to answer, but from my experience my Office brought
the consultation papers to a wide cross section of the public.
The internet will have made a huge difference in the speed of
communication to and from the regulator. Plainly the degree and
liveliness of the response depended substantially on the issue
in question; the more direct concern to the public the greater
the interest. And railways always tended to have everyone's interest.
10. To what extent do the needs or concerns
of the public guide the work of regulators; are regulators instruments
of Government or representatives of the public?
The answer to the second part of the question
informs the first. Regulators are instruments not of the Executive
but of the State. That is why they are office holders under the
Crown. But they are involved in the business of government in
the sense that they and not the executive are responsible for
ensuring that those licensed to supply essential facilities to
consumers and business do so efficiently and at the appropriate
cost to users, and where necessary taxpayers.
Nor are they representatives of the public or
tribunes of the people: certainly they must put consumer welfare
at the top of the agenda in their priorities but they must balance
their various statutory objectives and implement the purpose of
the legislation. To be the representative of one group rather
than another defeats the concept of independence: as I said before
to that extent the regulator is not answerable to the public at
large but he must take their interests into account and look for
consumer advantage in every decision which he takes.
Moreover, the concerns of the public as they
are revealed through the post bag, email and at public meetings,
even in TV programmes, inevitably and rightly influence the regulator.
The events of the day are important and often reveal the inadequacies
of the knowledge of the regulated companies about the quality
of service they are offering to the public. Good administration
should be responsive to those concerns and act upon them.
11. How independent are regulators of Government?
What factors do or might compromise their independence?
Independence of the regulator survives so long
as and only so long as the actions of the regulator do not produce
results which are at odds with what a democratic system expects.
A regulator espousing the cause of independence but behaving in
a manner which rattles markets, including capital markets reduces
investment, raises regulatory risk and produces nothing for consumers
and effectively abuses the system. One person's conduct can threaten
the structure of independent regulation which thrives on causing
industry to perform better than it otherwise would to the benefit
of users and consumers and indeed to the State.
Independence is therefore a privilege to be
used with the greatest care, precisely because substantial power
to control has been transferred by the State from the Executive,
which, I think, remains somewhat jealous of the loss of its legacy
and will look for ways of regaining it.
Therefore a regulator who takes no account of
Government wishes or concerns as to the future of "his"
industry is acting irresponsibility. Regulatory independence is
not tainted by discussion or consultation with Government: rather
it is enhanced through greater knowledge of the concerns of those
elected to represent the public.
Concluding I would add that throughout my five
years in office I can recall no instance of the Government seeking
to put pressure on me to take one decision rather than another.
Almost 20 years on from the innovation of its new entry into government,
independent regulation has settled down to be part of the democratic
structurebut with room for further improvement in performance
1 A concept which the delegation from the Ministry
of Transport of the People's Republic of China to the Office of
the Rail Regulator found difficult to comprehend (witness's recollection). Back
The Courts are reluctant to disturb the findings of regulators
or the Competition Commission on substantive economic issues.
This is in accordance with well established legal principles that
so long as the regulator applies the law correctly in the sense
of understanding the meaning and purpose of the statute the weight
that the regulator gives to the evidence and his findings on the
facts are matters for him to determine, absent some glaring error
of reasoning which goes to the substance of the decision. Thus
there has been no successful appeal on the substance against the
findings of the Competition Commission (formerly the Monopolies
and Mergers Commission). OFFER and the NI Electricity Regulator
have both been judicially reviewed successfully but essentially
on matters of the proper construction of the relevant statutes.
Regulated companies aggrieved by proposed licence amendments,
usually in connection with new price controls, continue to exercise
their rights to have the matter determined afresh by the Competition
Commission: recent references have been made in water and in mobile
phones (price controls) and in electricity generation (a proposal
for a good behaviour licence). The Competition Commission Appeals
Tribunal, which operates under procedures derived from the Court
of First Instance at Luxembourg and is not confined to "judicial
review", effectively rehears the case on the merits as a
full appellate body. Back