IDEAS & ADVICE

Iain Osborne, March 2016

EU Consumers: The Benefits Europe Brings authored by Iain Osborne, former Civil Aviation Authority Director, discusses the advatanges consumers have gained from EU membership. Sectors including aviation, telecoms, energy and general consumer rights are analysed to highlight how the EU protects consumers in these important areas.

Wednesday 17 February 2016

The paper produced by Martin Cave was the topic of discussion when he met the European Policy Forum's Regulatory Best Practice Group on Wednesday 17 Febraury 2016. 

The Infrastructure Forum, October 2015

This report prepared by Tim Pugh of BLP for The Infrastructure Forum looks at means of unlocking projects across a wide range of areas which have been developed so far and the possibilities for the future in the infrastructure sphere. 

European Financial Forum, September 2015

This study considers fines levied by key financial regulators in the US and UK in the period 2012-2014; the incentives which apply, the trends in their usage, the effect of the fines and the relative merits of fines compared with other measures targeted at individuals.

EPF's Regulatory Best Practice Group, January 2015

Fines imposed by economic regulators upon those in breach of regulatory requirements are increasingly prominent in the media. Last month, for example the Chancellor promised to commit the £1.1 billion levied through FCA fines on five banks to the NHS, following a call to do so by the Shadow Chancellor in November.  And over the holidays the issue of fines in the rail sector came to prominence.

This report, the second edition of a version published last year, addresses regulatory fines across the major regulated sectors. It compares and analyses the approaches of the FCA, Ofcom, Ofgem, Ofwat, and the ORR with respect to their respective punishment toolkits.

Simplifying Tariffs in Regulated Industries

October 2014

RBPG has been looking at some of the issues arising from current policy challenges in the energy sector.  One of these, which has relevance across economic regulation, is the issue of regulators seeking to reduce the number of tariffs offered by retail suppliers in the market.

 

A lively debate on this subject is underway to which Professor Stephen Littlechild, amongst others, has contributed. The question is important because in a number of regulatory arenas there have been concerns on the one hand that customers may be confused by a multiplicity of tariffs; and on the other about the consequences of seeking to narrow these choices.  For this reason the Forum asked Professor Catherine Waddams from the University of East Anglia to produce some thoughts for us.

 

It is a stimulating assessment, looking at the behavioural economics which have triggered some of these developments and at customer behaviour in switching.  The paper examines the arguments for fairness and carefully assesses the winners and losers from reduction in tariff choice: Switchers will be less well-off than they previously were, whilst those who do not switch should see lower prices depending on how fierce the companies compete with each other.

This paper sets out the need for enhanced commercial capability within Government. It recommends a hub and spoke approach which establishes a lean central resource, challenges and targets Departments to up skill with commercial talent, and sets up a one-stop-shop recruitment arm which could be outsourced to private sector experts.

Tim Tutton, 2014

This study supports the approach of the Government’s principles for economic regulation, especially in its aim to have a transparent statement of what the Government wants the regulator to achieve (a “strategy and policy statement”) which would not normally be changed more than once per Parliament. It notes, however, that in both energy and water, Government practice has fallen short of this prescription. In its careful examination of the rationale for independent regulation, how it has worked in practice and the perspective for the future, the paper urges Government to be more willing explicitly to guide regulators on how to manage conflicts between different obligations and targets imposed on them. It encourages Ministers to give more consideration to when it makes sense for consumers of particular products to pay to achieve broader Government objectives and when it makes sense for these to be paid for out of general taxation. The author notes that this may become even more relevant in the context of the Government’s desire for more co-ordination between regulators in facilitating cross-sectoral infrastructure investment, as set out in the most recent National Infrastructure Plan. Finally, the author observes that there remains a lack of co-ordinated parliamentary scrutiny of the work of all regulators and no parliamentary successor to the House of Lords Select Committee on Regulators.

UCL and The Infrastructure Forum, 2013

This study by The Infrastructure Forum, in partnership with UCL, shows that privately provided hospital services, including cleaning and catering, are overall better and cheaper, when provided by the private sector. The study is based on performance and cost data for 2008 and provides insight into the impact of alternative procurement options on the operational performance of public service infrastructure. It looks at comparatively new hospitals using data from a range of sources, including an NAO survey of PFI hospital contracts undertaken in 2010. Findings show that where services are either provided as part of an integrated PFI contract, or separately outsourced to the private sector, a higher proportion of the facilities achieve an 'excellent' patient environment rating as assessed under the Patient Environment Action Team assessment method. The report also brings out the differences in cost. It is found that privately provided cleaning services do seem to cost somewhat more at on average around 9% more when compared to publicly provided cleaning service. However, privately provided catering services are identified as significantly cheaper on average, at around 25% less per patient meal day than that of facilities where catering services are provided in-house.

EPF's Regulatory Best Practice Group, 2012

This report looks at the way in which regulators approach fines, penalties and consumer redress.  Regulatory fines have attracted increasing public attention as they have increased in size and number. To our knowledge, there has not been a corresponding debate on the principles and practices which would best secure an effective use of the system nor a look at alternative approaches which could be more effective.

The Infrastructure Forum, 2012

This report offers a strategic vision for the development of the UK’s national infrastructure. The vision reflects an apolitical perspective from the industry of the level of ambition that Government needs to set out, sector by sector, if business is to have the confidence to invest in our infrastructure over the decades ahead and drive the UK’s economic competitiveness.  What is needed is a framework for the efficient stewardship by successive Governments of the UK’s economic future. When budgets are tight, we need to be even smarter and more efficient in our procurement. That requires a clear and compelling articulation from the Government of the UK’s infrastructure needs in the medium term and a proper strategy for how to get there. Only with such clarity can we avoid the huge cost to the UK economy of major infrastructure schemes being developed by one Government only to be cancelled by another, the lost economic opportunity of schemes postponed by politics and delivered years too late and the inefficiency of schemes promoted in isolation without regard to their interdependencies.

European Policy Forum, 2012

The European Policy Forum conducted a study on the automatic exchange of information model established under the EU Savings Tax Directive 2003.  The EU Commission’s review in 2011 highlighted serious shortcomings with automatic exchange of information while research on Member State experiences by the EPF has brought to light further problems with this approach. At the same time there was a dramatic shift across the EU away from automatic exchange of information in favour of withholding tax regimes.  The purpose of the study highlighted the concrete gains and enhanced efficiency of a withholding tax regime as the more effective alternative to automatic exchange of information. The report calls for the withholding tax approach to be promoted as the most appropriate means of ensuring implementation of national tax claims while respecting the protection of bank clients’ privacy.

Compensating for Development: How to unblock Britain's town and country planning system

The Infrastructure Forum, 2012

In light of the growing trend of nimbyism within the UK planning system, The Infrastructure Forum conducted a study on ways in which local residents could be incentivised to support development.  There needs to be a fairer balance between the development of housing and infrastructure on the one hand, and the concerns of local communities on the other hand. Interviews with leading industry figures have identified a number of shortcomings with the UK model. These shortcoming and potential solutions were discussed with leading planning academics and officials from Ministries and a number of jurisdictions.  The international study allowed a comparative approach to addressing this entrenched hurdle within the British planning system. It is evident that the existing council-level incentives have led to a misalignment of incentives, with the disadvantaged residents currently overlooked. TIF has therefore advocated the Dutch approach of individual incentives to ensure those detrimentally impeded by planning have a fair share of the benefits only by resolving this misalignment can nimbyism, which stems from the current economic incentives to oppose development, be addressed.

European Financial Forum, 2012

A report by the European Financial Forum points out that there are worrying developments over its financial policies. Argentina defaulted on its debt in 2001 in the largest default in history and since then debt repayments have been as low as 25% of the amounts due, despite large current central bank reserves. Britain is the second largest contributor to the World Bank International Development Association, contributing £2.7 billion or 15.6% of donor pledges. Currently there are 49 IDA active projects in Argentina, amounting to $7.56 billion or £4.78 billon of soft loans in this programme. The report suggests that it may be the moment for Britain to follow the American approach and refuse to lend to Argentina. A substantial proportion of current lending does not meet the ‘human suffering' test and it may be important the UK Government does not allow the message to Argentina to become mixed. Argentina's unilateral action is starkly at odds with the maintenance of a functioning global financial system; a system essential to the health of the City of London, the report concludes.

The Infrastructure Forum 2012

A report produced by The Infrastructure Forum states that the Government should establish an “Infrastructure Ombudsman” to increase transparency and solve disputes for future private finance schemes. It should tighten the rules on traditional public sector procurement by publishing a green book to ensure that traditionally-procured and private finance schemes have the same rules on transparency, audit and supervision. The costs of private finance have risen substantially since the financial crisis. Public sector capital budgets saw significant cuts in last year’s spending review. This has severely constrained investment in infrastructure at a time when this could offer a vital short-term stimulus to the economy and be the engine of long run growth.

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