Professor Graeme Roy, Dean of External Engagement (College of Social Sciences) and Professor in Economics, Adam Smith Business School, University of Glasgow
The Competition and Markets Authority (CMA) and the University of Glasgow hosted a joint workshop examining the future of regulation post-COVID, part of an initiative to deepen links between policy regulators and the academic community across Scotland.
It followed a similar collaborative event held pre-pandemic at the University of Strathclyde and reflects the growth in economists working in economic regulation (including at the CMA, OfGEM, OFCOM and the Scottish Government) in Scotland.
The workshop – held on 16 September 2021 – started with Professor Graeme Roy from the University of Glasgow introducing Dr Mike Walker, Chief Economist of the CMA. Dr Walker provided an overview of the changing nature of regulation in the UK, with key trends, such as the growth of online shopping and the transition to net zero as well as a growing focus on the distributional effects of interventions, changing the way in which regulators think about markets and competition.
The first session of the day built on that scene-setting agenda with a series of talks from practitioners and academics on the ‘top priorities’ for this field of economics. Speakers included:
- Chris Whitcombe (CMA)
- Lucy Eyre (OFCOM)
- Edward McHardy (Scottish Government)
- Prof Nick Hanley (University of Glasgow)
- Dr Alex Dickson (University of Strathclyde)
- Dr Simon Roberts (University College London and University of Johannesburg)
- Dr Matt Hannon (University of Strathclyde)
The issues covered included: how to best incentivise the energy transition but maintain fair competition (and protect low-income households); how best to regulate media activities in an increasingly digital world; and the challenges (and opportunities) from online advertising in a post-COVID world. We also had a series of academic presentations showcasing the latest research in this field. This included policy ideas such as the possibility for eco-labelling on food products (similar to nutrition and calorie information now added to many supermarket items) to help consumers understand the sustainability credentials of the product being purchased, and the potential use of biodiversity offset credits as just one mechanism to help embed sustainability into market decisions.
The challenges for regulators in dealing with a range of important, but sometimes conflicting, policy objectives was the subject of the second session chaired by Prof Theodoros Diasakos (University of Stirling). Speakers included Ben Harries (OFCOM), Vlada Kolosyuk (OfGEM), Prof Frans de Vries (University of Aberdeen) and Theon van Dijk (Chief Economist of the Netherlands Authority for Consumers and Markets).
The economists from OfGEM and OFCOM discussed recent experience of designing regulation which strikes a balance between protecting consumers and promoting competition while also ensuring appropriate levels of investment and encouraging the innovation which will be needed to reach net zero. Dr van Dijk, provided insights from the Authority’s ground-breaking work on assessing sustainability agreements between firms and appropriately weighing the potential impacts on competition and sustainability.
Finally, the third session – chaired by Dr Francesca Flamini (University of Glasgow) – focussed on the challenge of inequality and protecting vulnerable consumers, particularly post-COVID. Speakers included Dr Maureen Paul (Interim Chief Economist at OfGEM), Dr Mike Walker (CMA Chief Economic Adviser) and Dr Konstantinos Angelopoulos and Max Schröder (University of Glasgow).
Highlighting the importance of this topic, the academics shared recent work showing the potential for a severe and prolonged impact of the pandemic on household wealth and inequality. Dr Paul presented on novel work OfGEM has been doing to understand the distributional impact of its interventions on different demographic groups. Dr Walker discussed recent research demonstrating the effect of market power and concentration on inequality and reflected on the CMA’s work to protect vulnerable consumers, such as through efforts to eliminate the “loyalty penalty” in critical consumer products like home insurance.
In the coming months, we will be exploring these issues (and more) in greater detail through a series of seminars and workshops. Colleagues from the policy regulation community will also be supporting teaching on the Scottish Graduate Programme in Economics through a series of invited lectures as part of the Industrial Economics course taught on the MSc. in Economics.