The Principles of Regulation
| Published date | 01 October 1926 |
| DOI | http://doi.org/10.1111/j.1467-9299.1926.tb02264.x |
| Author | W. Tetley Stephenson |
| Date | 01 October 1926 |
The
Principles
of
Regulation
by Public Authorities
of
Privately Operated Utility Services
By
W.
TBTLEY
STHPIIEXSON,
Ar.A
N
the 5th
of
February this year, Sir Henry Bunbury addressed
0
the East Midland Group of the Institute on the Econoiiiic Regu-
lation of Public Utility Services, and in the current 'issue of the
Journd
of the Institute
a
Paper based on this address appeared. Not merely was
the title of the Paper suggestive, but the sentence
"
our public utility
services must themselves be reckoned amongst the necessities
of
our
economic and social life
"
seemed to contain the kernel of the subject-
matter of the Paper which
I
have to submit
to
you. The principles
of
regulation of Public Utility Services can well be divided into two main
groups-economic and social.
At
times these
go
hand-in-hand
;
at other
times they diverge. Time and
circumstance may bring them together or set them miles apart.
So
much
does this seem
to
be the case that it may well be that it is a less difficult
matter to discover and define the principles
on
which the regulation should
be founded than to apply the principles in practice. It is in the applicn-
tion of the principles
in
practice that controversy mainly lies.
From the historical point
of
view it is often difficult to decide which
group of principles has had the greater weight. Has the control
of
the
finances of the Public Utility Services companies been exercised mainly
on econoinic or on social grounds
?
Unduly high charges
for
water or gas,
for transport by railway or the
use
of
docks by shipping will be substantial
hindrances to industry and trade. They are therefore economically
undesirable. Such high charges at the same time tend to reduce employ-
ment, to restrict the amount of the services which the public may enjoy
with possible ill-consequences to health, to raise the costs and lower the
standard of
living.
The high charges are as undesirable on social
as
on
economic grounds. Which group of considerations has been the moving
force is often
so
hard to determine, that the final word
will
probably not
be written until many more years have passed and the economic historian
is further removed from the times at which the control came into being.
The economic considerations may be said to largely hinge roiind the
question,
"
Will it pay financially
?
"
This is not to be limited by regard
The principles are in no way absolute.
303
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