Pulse.Assent

• Professor Cave recommended price cap in landmark independent report into competition in the energy market
• the government has also confirmed appointment of 2 non-executive directors on the Ofgem board with track record of championing consumer protection

Professor Martin Cave, former Deputy Chair of the Competition Commission and Deputy Panel Chair of the Competition and Markets Authority, is the preferred candidate to be the new Chair of the energy regulator, Ofgem.

This comes just days after Andrew Tyrie, the former chair of the Treasury select committee, took up his role as chair of the Competition and Markets Authority as the government moves to ensure robust regulators place consumers at their heart of their work.

In addition to his distinguished regulatory career, Professor Cave is an eminent economist who has undertaken several roles in government including as economic adviser to Ofcom between 2003 and 2006. He has led a number of high profile reviews within government and has a deep understanding of the energy sector. As part of the CMA’s 2016 review of the energy market Professor Cave wrote the dissenting opinion, saying that the report’s proposed reforms did not go far enough and that a temporary price cap was needed to protect consumers from unfair energy price rises.

Business and Energy Secretary Greg Clark said:

We are determined to see active regulators who put consumers interest at the heart of their work, the appointment of Professor Cave to lead Ofgem will ensure that.

Professor Cave has an impressive track record and is well respected for his work regulating the utility markets. I have no doubt he will use his wealth of expertise to protect consumers and help create an energy market that works for everyone.

Professor Cave said:

It is a real honour to be recommended for one of the most important roles in the energy sector. The work that Ofgem has done with government over the last 12 months has helped consumers get a better deal for their energy. Seismic change is afoot in this sector and I will work to ensure that the regulator continues to protect consumers while working with government and those across the sector to build an energy system fit for the future.

Ofgem’s role is to protect the interests of existing and future electricity and gas consumers. It does this in a number of ways including promoting value for money; promoting security of supply and sustainability for domestic and industrial users; and the regulation and the delivery of government schemes.

The post of Ofgem Chair is subject to a pre-appointment hearing by the Business, Energy and Industrial Strategy Select Committee. This will take place on 3 July 2018.

The current Ofgem Chair, David Gray, will end his term on 1 October 2018.

Non-Executive Directors

Lynne Embleton and Ann Robinson have also been confirmed as the new Non-Executive Directors of the Office of Gas and Electricity Markets (Ofgem).

Greg Clark continued:

I am also delighted to appoint Lynne Embleton and Ann Robinson to the Ofgem board – both have a strong reputation for improving the service consumers receive and effectively advocating for rights on their behalf.

Lynne Embleton is currently the CEO of IAG Cargo where she is leading transformation based on infrastructure investment, customer focus, culture and digital technology. She has previously served on the board of British Airways as the Managing Director at Gatwick and as Strategy Director.

Ann Robinson is a noted consumer champion with significant experience in energy and consumer policy. Ann worked in the Civil Service before becoming Chief Executive of Scope. She then spent a period as Director General of the British Retail Consortium and she is the former Executive Chair of Energy Watch. Over the last few years Ann has been a consultant advising a number of organisations on consumer issues including uSwitch. The Gas Safe Register and charities such as Scope.

Notes to editors

The Chair of Ofgem has responsibility for:

• addressing the significant consumer detriment in the retail market
• responding to rapid technological change in the electricity market, allowing the emergence of smart, decentralised technologies, implementing plans for a more independent electricity transmission system operator and more active system management at a distribution level
• improving value for money from the next round of price controls for gas and electricity networks under the RIIO (Revenue=Incentives+ Innovation+Outputs) framework, due by 2022, and reforming charging systems so that they provide the right investment signals while minimising consumer costs
• supporting continued security of supply and efficiency
• operational performance of eServe, which delivers a number of government programmes

Martin Cave

Martin Cave has worked as Deputy Chair of the Competition Commission and Deputy Panel Chair of the Competition and Markets Authority from January 2012 to January 2018.

He has also conducted a number of independent reviews for the UK government. These include:

• appointed by the Chancellor of the Exchequer and the Secretary of State for Trade and Industry to conduct an independent review of radio spectrum Management 2001 to 2002
• appointed by the Chancellor of Exchequer to conduct an independent audit of major spectrum holdings, 2004 to 2005
• appointed by Secretary of State for Communities and Local Government to undertake an independent review of the regulation of social housing, 2006 to 2007
• appointed by the Chancellor of the Exchequer and the Secretary of State for Defra to conduct a review of competition and innovation in the water sector, 2009 to 2010
• appointed by the Secretary of State for Transport to chair an expert panel on airport regulation, 2008 to 2009

He is also an eminent economist who has undertaken a number of roles in government including as economic adviser to Ofcom between 2003 and 2006.

A new law requiring horse owners to microchip their animals has been introduced today to prevent abuse and improve welfare.

Earlier this year RSCPA released figures that showed that they rescued around 1,000 horses in 2017, to highlight the issue of horses being fly-tipped or dumped, often in horrific conditions.

From October 2020 it will be mandatory for all owners to microchip their horses, ponies and donkeys. The new Central Equine Database will then allow local authorities and police to track down the owners of dumped horses and make sure they are punished and the animals are given the care they deserve. It will also mean lost or stolen horses will be reunited with their owners more easily.

Lord Gardiner, Animal Welfare Minister, said:

The government shares the British public’s high regard for animal welfare and it is completely unacceptable that hundreds of horses and ponies are left abandoned every year by irresponsible owners.

That is why we have today laid new regulations in Parliament requiring horses to be microchipped. This will bolster the ability of local authorities and police to identify abandoned animals, ensuring these beautiful creatures receive the care they deserve and that those who mistreat them will face the consequences.

The Central Equine Database logs all domesticated horses, including those required to be microchipped by October 2020. This will offer a practical solution to the pressing animal welfare issues which arise when horses are abandoned, making it easier to rehome the animals more quickly and effectively and has been welcomed by charities such as the RSPCA.

We are working closely with vets and the British Horse Council to highlight the change in regulations, explaining that horse owners have until October 2020 to make sure that all horses are microchipped. This extra time will allow horse owners to combine microchipping with a routine visit to, or from, their vet with the procedure costing around £25-30.

RSPCA Assistant Director of External Affairs, David Bowles said:

We are delighted regulations to ensure horses of all ages should be microchipped are set to become a reality.

The RSPCA rescued almost 1,000 horses last year (2017), and a huge majority were not microchipped making it virtually impossible to trace the owners. Heartbreakingly our inspectors are frequently faced with horses which have been dumped whilst very sick, dying, or sometimes even dead.

We believe this extension of the current rules on compulsory microchipping will go some way to help find those irresponsible owners that abandon their horses as well as helping owners be reunited with their animals that have been stolen.

If horse owners do not microchip their horses by October 2020 they could face sanctions from their local authority including a compliance notice and, as a last resort, a fine of up to £200.

Jeanette Allen, Chair of The British Horse Council, said:

This new legislation has the full support of the British Horse Council. We have been working closely with Defra and this achieves the important step of requiring all equine animals to have a microchip.

This is a huge advance for the UK’s horses, ponies and donkeys. It will not only enable irresponsible owners to be held properly accountable for the treatment of their animal, it will also aid in reuniting owners with lost or stolen horses and significantly supports the UK’s efforts to protect our equines from disease outbreaks.

The regulations for this database were laid in Parliament today and, subject to parliamentary approval, will come into force on 1 October 2018. They are similar in nature to the legislation which requires all dogs to be microchipped.

Increased scrutiny and intensive engagement from the Groceries Code Adjudicator (GCA) is the common factor among all retailers identified by groceries suppliers as 2018’s biggest improvers.

The groceries sector survey – carried out by YouGov for the GCA – puts Tesco, Morrisons, Asda and the Co-operative at the top of the improvement table for Code compliance in a year of strong progress across all regulated retailers.

There were over 1,000 responses to the survey. The results were released at the GCA’s annual conference held in London. The theme was “Strong Progress; Fresh Challenges”.

The Adjudicator, Christine Tacon, said: “My 2018 survey tells a very positive story and it is no coincidence that the four most-improved retailers this year have each faced increased GCA scrutiny and heightened levels of GCA engagement through investigations and case studies.

“Indeed, I am delighted to report significant improvements across all regulated retailers. In each successive GCA survey, suppliers have scored retailers’ compliance with the Code. In 2014, the percentage reported as complying ‘consistently well’ or ‘mostly’ ranged from 58 to 90%. This year, the range is 84% to 97%, with only two retailers scoring less than 90%.

“The 2018 survey is proof that my collaborative, business-focused approach gets results.”

This year only four out of ten suppliers reported having experienced a Code-related issue – down from a high of eight out of ten in 2014, and a huge improvement on 2017 when 56% of suppliers reported having experienced an issue.
The incidence of all Top Issues is also on a steep downward trend, with delay in payments – reported by only 19% of suppliers – being the highest-ranking issue in 2018. Compare this to 2014, when the percentage of suppliers reporting the GCA’s Top 5 Issues ranged from a high of 45% to 33%.

Ms Tacon said: “The results of the survey together with information I have received from suppliers and trade associations mean there is no pressing candidate for inclusion as a current Top Issue. But this doesn’t mean my job is done – far from it. I know there are fresh challenges waiting for me.

“I can confidently say that for two reasons. One is that my current investigation into the Co-operative Group will generate future work with all regulated retailers, although of course I cannot yet know what form that will take. The second is that additional retailers will soon be designated by the Competition and Markets Authority.

“The CMA has told me that it has written to a number of retailers to identify those with a UK annual groceries turnover of more than £1 billion. It expects to designate one or more additional retailers by the end of August.

“Bringing these new retailers up to speed and ensuring a consistent level of Code compliance across the entire regulated cohort will be challenging and exciting work. I am looking forward to it very much.”

One continuing challenge revealed by the survey results is the 45% of suppliers who have still not had any Code training – a figure that rises to 67% among micro suppliers and 58% among small suppliers.

Ms Tacon said: “This remains an area of concern for me. Half of suppliers are not trained so they are less likely to have the confidence to speak up. The results of my survey show that speaking up can bring real benefits. I urge them to get trained in the coming months.”

A review of house building has called for changes to the current system to ensure new homes are built faster and for thousands more British bricklayers to be trained to help meet government targets.

Sir Oliver Letwin was commissioned by the government to examine what could be done to speed up the slow rate of house building on major sites.

His study, published today (25 June 2018), warns developers are slowing the system down by limiting the number of new built homes that are released for sale at any one time.

The practice is designed to prevent a glut of new built homes driving down prices in the local market and is known as the ‘absorption rate’.

However the report suggests that developers could increase the choice of design, size and tenure of new homes without impacting on the local market and therefore speed up the rate at which houses are built and sold.

The report concludes that “….to obtain more rapid building out of the largest sites we need more variety within those sites”.

The analysis also suggests a shortage of British bricklayers will have a “significant biting constraint” on government plans to boost the number of new homes built from 220,000 a year to 300,000.

To meet the shortfall the analysis calls for 15,000 more bricklayers, almost a quarter of the size of the current workforce, to be trained over the next 5 years.

It suggests that to “raise production of new homes from about 220,000 to about 300,000… the government and major house builders work together … on a 5 year ‘flash’ programme of pure on the job training.”

Rt. Hon. Sir Oliver Letwin MP said:

I would like to thank everyone who has contributed to the Review Panel’s work to date in analysing all possible reasons behind the slow build out of housing sites. It is clear that the main cause for delay is the absorption rate. We found that if house builders were to offer more variety of homes and in more distinct settings then overall build out rates could be substantially accelerated.

Secretary of State for Communities, Rt. Hon. James Brokenshire MP, said:

We want to help people onto the housing ladder, and so I would like to thank Sir Oliver and the expert panel for their excellent work. I was particularly interested to see that increasing the choice of design, size and tenure of new homes in helping to speed up build out rates and help deliver the homes we need and communities want. I look forward to receiving the final report in the autumn.

Sir Oliver and the panel visited 15 large sites – of between 1,000 and 15,000 homes – in areas of high demand in London, the South East, West Midlands and the North West.

The government commissioned this Independent Review as part of its comprehensive plans to deliver a housing market fit for the future and build the homes that communities need.

Sir Oliver Letwin and his panel will submit final recommendations on improving build out rates in the autumn.

Further information

See the draft analysis, published today.