Music & Videos on Public Transport, Energy Bills, Water Pipes, Meta & Measles

Here are a few snippets of regulatory news.

Antisocial Behaviour

The LibDems have proposed an amendment to the Bus Services Bill which would add people playing music and videos out loud on public transport to the list of antisocial behaviours such as dropping litter. This has generated a lively debate in both print and social media. Ian Dunt says it’s an illiberal agenda whilst Robert Shrimsley points out that this does not necessarily make it wrong. “Society is based on the trade off between freedoms and responsibilities. Enforcement of standards, common rules of consideration is a foundation of society.”

My own analysis starts with the analogy of the Highway Code (©Marcial Boo). Drivers do not give way at pedestrian crossings and roundabouts because they think about the Code, nor from a fear of speed cameras. They do so because they have internalised and choose to comply with agreed standards that they also expect of others. Rules and culture are aligned. When they are not, culture takes precedence. Rules say it is illegal to exceed 70mph on motorways. But culture allows faster driving: many do it, and few are held to account for non-compliance.

Would culture quickly prohibit noisy videos on buses in the absence of effective enforcement (which would be impracticable)? Surely not! But cultural prohibition backed by some enforcement might work on trains. It would surely be unwise, however, to legislate for trains and not buses for that would legitimise antisocial behaviour on the latter.

Energy Prices

UK energy prices are very high compared with other countries. I understand that there are at least two reasons. The first is that all power generators, including wind farms, solar etc. are paid the same per KwH as the most expensive gas-powered plants. These costs are passed through to our bills. This seems ridiculous.

The second, less important reason is that our energy bills are inflated by costs which are then passed on by way of subsidies for low-carbon generation. This is concealed and somewhat blunt taxation.

And yet the government has pledged to significantly reduce household energy bills by 2030. How can these conflicting policies be reconciled?

I assume that the answer is in the government’s Clean Power 2030 Action Plan which aims for 95% of electricity demand to be met by clean sources by 2030. (See Sam B’s comment below). Then … Bingo? The link to gas prices and subsidies can maybe be abandoned. (Please do comment below if you have better information or insight.)

Separately, HMG/Ofgem are debating whether to introduce zonal pricing. This would be intended to reflect the true cost of delivering electricity to businesses and households. (A lot of power is lost if power has to be transmitted over long distances.) Those living near electricity generation - such as hydroelecticity, nuclear and wind farms - would pay less. Those of us living further away, typically in city centres, would pay more. But the screams of the losers would no doubt make the change politically unattractive.

Water Regulation

Part 7 of How to Succeed in the Senior Civil Service (here and also here) asks whether it is ‘really Ofwat, or maybe the Environment Agency, or the Drinking Water Inspectorate, or the Office of Environmental Protection, or the Marine Management Organisation, or maybe even Natural England, that has overall responsibility for improving the cleanliness of our rivers and beaches?’ This problem and others seem also to have been identified in last week’s highly critical National Audit Office (NAO) report Regulating for investment and outcomes in the water sector. It notes that:

The regulators do not have a good understanding on the condition of infrastructure assets, as they do not have a set of metrics to assess their condition. … At the current rate, it would take 700 years to replace the entire existing water network.

All three regulators require water companies to produce individual company plans on specific topics such as drinking water safety … none of the regulators have a duty to ensure there is a coherent national plan for the water sector.

Next steps? The NAO reports direct to Parliament. There will now be a Public Accounts Committee (PAC) discussion of the NAO report followed by a PAC report. We are also awaiting the report of the Independent Water Commission which is considering the future of Ofwat.

Planning

The FT reported that National Highways spent £267m on gaining development consent orders for the proposed Lower Thames Crossing. Whatever the rights or wrongs of the project, this is a ridiculous amount.

I hope to return to this subject in a future Substack.

In the USA - Regulatory Independence Under Attack

President Trump’s interest in sacking Fed Chair Jay Powell (the equivalent of our Governor of the Bank of England) raised concern about central bank independence and led to an immediate increase in interest rates.

Three Federal Trade Commissioners have meanwhile filed a lawsuit claiming reinstatement following their sacking in March before the end of their full terms. (The FTC is, alongside the Department of Justice, the equivalent of the UK’s Competition and Markets Authority.) The slightly surprising thing is that the FTC still seems to be energetically pursuing its investigations into Amazon, Meta and X.

Mark Zuckerberg has recently given evidence in the Meta “monopoly” case, hoping to retain ownership of Instagram and WhatsApp. He has faced the embarrassing problem that an old email revealed that his purchase of Instagram was, in part, to “neutralise a competitor”. But the FTC’s main problem is that Meta offers its services for free so there is no obvious consumer harm - unless it can show that consumers suffered a degraded user experience due to the platform’s dominance - such as feeds over-full of adverts and poor privacy protections.

Measles

We may one day have to ask for visitors arriving from the USA to show proof of measles vaccination.

Measles’ reproduction number (the number of people who will on average be infected by one infected individual) might be as high as 18. This means that it might spread through the community if more than 1 in every 18 are unvaccinated. Allowing for unvaccinated babies, this suggest that 95% need to be vaccinated to ensure herd immunity.

The vaccination rate in the USA has recently fallen to 92.7%. Researchers at Stamford University say that this means that measles could become endemic again and that the USA is “on the precipice of a disaster”.

Accounting and Consulting

One endemic problem in the UK is the absence of competition between ‘the Big Four’ firms large enough to be able to offer services to multinationals. The FT reports that a new firm, Unity Advisory, is likely to be launched in June, “vowing to peel off British clients and partners from the Big Four”. But it won’t offer audit services.

Martin Stanley