Why are regulators in thrall of the businesses they’re supposed to regulate? - David Behrens

It would certainly be hard to argue that Ofgem has the backs of consumers following its capitulation to the energy giants in putting up gas and electricity bills by 80 per cent this winter.

We do not know what series of equations they used to reach that figure – but it’s fairly obvious that the measure of what most people could afford was not one of them.

Ofgem said it wanted to avoid a repeat of last year’s fiasco, when small, independent energy companies collapsed like dominoes as wholesale prices went through the roof. The cost of their demise had somehow to be borne by you and I in order for larger companies to fulfil their contractual obligation of making sure that no-one was cut off.

But – bluntly – why was that our problem? Why should the cost of a rescue mission have been added to our bills rather than subtracted from the profits of the surviving firms? It’s a competitive jungle, and competition involves risks as well as profits.

In the case of the biggest suppliers, those profits are very enormous: The German-owned giant Eon made £3.4bn in the first half of this year alone, and it is a weak regulator indeed that considers it more important to preserve margins like that than to protect the human rights of consumers to afford fuel and food at the same time.

Ofgem may soon be hauled up in court to explain itself, and not before time. A pressure group called the Good Law Project is threatening to sue the organisation for making what it says was a conscious choice to let consumers and small businesses, not the energy companies, bear the brunt of the crisis. To what extent, the protestors are asking, did it consider the effect on elderly people and children before giving the companies what they wanted? That’s something we all have a right to know, especially given Ofgem’s stated “strategic vision” of guaranteeing consumers good value and fair treatment. At the moment they’re getting neither.

This lack of backbone seems to run right through the regulation sector.

Ofwat, which is in charge of looking after what water we have left, is up to its neck in effluent after its boss allowed himself to be a virtual mouthpiece for the suppliers.

It wasn’t their fault the pipes were leaking, he said – while at the same time allowing his organisation to turn a virtual blind eye to the illegal discharge of sewage from 870 outlets which water companies are operating without permits.

MPs have now reprimanded Ofwat for not exercising its powers to clamp down on this – but given the hand-in-glove relationship between regulator and regulatees, that’s not likely to change any time soon. Jonson Cox, who stepped down as Ofwat chairman earlier this year, had previously been at Anglian Water and left there with a £9.5m “golden goodbye”.

And a former Ofwat chief executive, Cathryn Ross, is now head of strategy at Thames Water.

Yet another regulator, Ofqual, which is supposed to supervise the lucrative exam-setting and marking sector, presided over this month’s BTEC fiasco which left students who should have received their grades not knowing if they could go to university. Ofqual was unable even to force Pearson, the profitable company responsible, to say how many young people were affected. If those students had been as late with their homework as Pearson was with their results, they’d have been in detention.

The closest to discipline that Ofqual could invoke was the threat of a “review” into what went wrong.

What is the point of having these regulators if they are toothless, timid or both? Funded as they are by taxpayers, they have an obligation not to bite the hands that feed them. Where there is a balance to be struck, it’s their duty – or should be – to ensure that corporate interests don’t outweigh those of everyone else. In this respect, neither Ofgem, Ofwat nor Ofqual appear up to the task.

When Britain finally manages to secure the services of a working Prime Minister once more, the overhaul of Ofgem and the reduction of the energy cap will be his or probably her first job. The other regulators should not be far behind – because right now if we were to do away with the lot of them, there are very few people who would give an Oftoss.