Tory peer Lord Tyrie in contention to put spark back into Ofgem

·3 min read

Lord Tyrie, the former chair of the competition watchdog and architect of many of Britain's post-financial crisis banking reforms, is among the candidates vying to head Ofgem, the under-fire energy regulator.

Sky News has learnt that Lord Tyrie has put his name forward to replace Professor Martin Cave, who is due to step down as Ofgem's chairman in October, at the end of his five-year term.

The Conservative peer's interest in the role comes after he was also considered as a potential chairman of the Financial Conduct Authority and of the Court of the Bank of England - both of which went to other candidates.

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Lord Tyrie stepped down as chairman of the Competition and Markets Authority in 2020 amid unhappiness about his leadership style among senior colleagues.

Nevertheless, he has been one of the most significant figures in parliament in the last 15 years, chairing a commission on banking standards responsible for introducing key changes to the way the industry is supervised.

The Ofgem chair recruitment process, which will ultimately be a decision for Grant Shapps, the energy security and net zero secretary, is still at a relatively early stage, with longlisted candidates yet to be formally interviewed.

If Lord Tyrie does progress to its latter stages, he would inevitably be regarded as a change agent capable of enforcing a radical shake-up at an organisation that is widely regarded to have underperformed during the energy crisis.

Sky News revealed earlier this year that the government was preparing to replace a slate of Ofgem's directors in the coming months, with four new non-executives to be appointed as well as Professor Cave's successor.

Ofgem and the Department for Energy Security and Net Zero both declined to comment on the appointment process for the chair role, although a spokesperson for the energy regulator had previously said: "The chair will be appointed by the Secretary of State for the Department for Energy Security and Net Zero, who are overseeing the selection process."

The watchdog has faced criticism over its handling of the recent scandal over energy companies' use of prepayment meters.

Jonathan Brearley, Ofgem's chief executive, has come under intense pressure, with the former prime minister Gordon Brown saying that he should consider resigning after thousands of vulnerable households were forced to install costlier prepayment meters.

Ofgem has since unveiled a series of measures to crack down on misconduct by energy suppliers.

Its new chairman will be paid up to £180,000-a-year for an average of about three days a week.

In recent months, Lord Tyrie has aligned himself with a new grouping of parliamentarians and private sector chiefs seeking to overhaul the UK's approach to economic regulation.

The Regulatory Reform Group, which is chaired by Bim Afolami, a Tory MP, is examining whether watchdogs are acting as an impediment to investment.

In an article for The Times last month, Lord Tyrie and Mr Afolami wrote: "The regulators that shape the British public's daily lives are far too often black boxes - inscrutable institutions offering little explanation of their decisions.

"It can sometimes be difficult to tell if a decision has been made in pursuit of a clear goal or if regulation is simply the unforeseen side-effect of a decision made elsewhere.

"Nor is it always clear if multiple regulators are communicating effectively in pursuit of shared goals.

"Businesses that fall under more than one regulatory remit often express frustration that those involved do not share information, duplicating work and causing confusion."

This weekend, Lord Tyrie did not respond to a request for comment about his interest in the Ofgem job.