Working Paper
UK Utility Reforms

Distributional Implications and Government Response

The UK was one of the earliest countries to undertake utility reform, which included changes in ownership, in the regulatory regime and in market structure and competition. While most agree that the programme has had beneficial effects on efficiency, there has been increasing concern about the distribution of these benefits between and within stake holder groups, resulting in a second phase of reform under the Labour Government elected in 1997. This paper reports on the effects of the initial programme of reforms, and on the response of the British public, the government and the regulators. While the UK is very different from most Latin American countries, this second phase of reform may hold lessons for other countries at an earlier stage of utility reorganization.