Committee publication · Correspondence · 4 April 2025
Letter from the Prime Minister on supporting growth dated 31 March 2025, including regulators responses to the PM, Chancellor and DBT Secretary of State
Summary
The Prime Minister writes to the Liaison Committee enclosing regulator responses to December 2024 letters from government asking how regulators can support growth. Ofgem proposes £170bn in investment facilitation, grid connection acceleration from 5 years to 6 months, and energy cost reduction for industry. The CMA commits to five priority actions: targeting enabling sectors, implementing digital markets competition regime, combating bid-rigging in public procurement, advising on Industrial Strategy, and reforming operational practices to improve predictability and pace.
Key findings
- Ofgem will facilitate over £170bn investment in electricity networks and energy infrastructure to support Clean Power 2030, including new interconnectors and storage capacity.
- Ofgem aims to reduce grid connection queue times from 5 years to 6 months for critical projects by removing non-viable projects and reprioritising.
- Ofgem seeks government support on electricity market reform including zonal pricing, legislative changes to charging regime, and cost allocation for energy-intensive industries and AI data centres.
- CMA will implement new digital markets competition regime (commencing 1 January 2025) to drive innovation and investment in UK tech sector, with 'no surprises' transparency approach.
- CMA proposes using AI and data science to root out illegal bid-rigging in public procurement (£300bn+ annually) and will report on contribution to economic growth in annual accounts.
Tone
ProceduralTopics
Key actors
Prime Minister Keir Starmer, Chancellor Rachel Reeves, Secretary of State for Business and Trade Jonathan Reynolds, Ofgem, Competition and Markets Authority (CMA), Dame Meg Hillier, Marcus Bokkerink (CMA Chair), Sarah Cardell (CMA Chief Executive)
Notable line
“… we are limited in what can be done by our current statutory duties. Through the Ofgem Review, we would welcome further work on whether our statutory framework”
Key Quotes
“Cutting unnecessary regulation will make it easier for businesses to invest, grow and create jobs.”
“… we have reformed our infrastructure regulation to dramatically increase the pace of investment in the sector, and would like to work with government to maximise the economic opportunities this presents for the UK.”
“In my view, it will take significant reform to increase the competitiveness of the UK energy system, but it is vital to do so if we are to successfully deliver the AI Action Plan and grow energy- dependent industry. Specifically: a.”
“The CMA is fully supportive of the government's focus on driving economic growth and stands with you in this critical shared endeavour.”
“Strong competition and consumer protection operate in a mutually reinforcing way to: • spur innovation , investment and productive growth across the whole UK economy …”
“The regime is carefully designed to ensure that the UK keeps pace with the future, while maximising its international attractiveness as a home for innovation and investment in these dynamic markets.”
Source · parliament.uk record ↗