Toothless watchdogs need bite
THE recently announced increases in gas prices will do little for our personal finances but the effect on business should not be underestimated.
At a time when most, if not all, companies are looking at cost cutting, price rises are the last thing we all need. Gas is essential to much of our manufacturing base and this latest increase ensures that the cost is much higher than most of our competitor economies.
Increases in petrol and oil costs will shortly follow in the New Year again affecting the competitiveness of the UK export sector.
Exports have been somewhat improved of late and whilst still not at the levels needed to sustain a long and lasting move away from recession the fall in the value of Sterling by some 20% is having a marked and much required impact.
What is worrying, however, about this latest round of increases is the lack of impact of the various regulatory bodies. Admittedly there will be an enquiry into gas prices but any findings will not be published until well into 2011 and well after the damage is done.
Perhaps a starting point should be an investigation into why our largely foreign-owned energy companies can have a high price strategy here whilst holding costs down in Europe.
It is not only the gas regulator which appears to have such little impact. Transport costs by rail will increase well above current inflation levels, water costs will increase and the banking regulators appear to have thrown in the towel!
Interestingly on this point, HSBC continues to refuse to provide details of its high earners claiming that this will drive such people into the arms of overseas banks. HSBC is also listed on the Hong Kong Stock Exchange and has no problems with income disclosure there in line with statutory requirements.
The Government claims to be friendly toward industry and appreciates its importance in sustaining recovery. If so then it should look closely at our ineffective regulatory bodies, give them real powers to impose sanctions and ensure that such powers are used for the benefit of the wider economy.
The alternative is to scrap them and make a real saving but that may be too bold a step.