The timing of the departure of one of Ofgem's senior regulators to join Centrica is a little unfortunate. Relations between the gas and electricity watchdog and the industry are at a super-sensitive moment, with a competition investigation just launched and the threat of a windfall tax floated.

The “purdah” period of Philip Davies, Ofgem's former director of markets, needs to be protracted to prevent any suspicion that Centrica, owner of British Gas, might improperly benefit from inside knowledge of Ofgem's thinking.

His starting date and any restrictions he will continue to have to abide by should be made public to maintain public confidence at a time when household energy bills are soaring.

But those who frown at the increasingly commonplace episodes of regulatory gamekeepers turning poacher probably worry too much.

There is a concern that the best regulatory talent is creamed off by private sector companies able to pay much more. Mr Davies is expected to double his salary through his defection. Among lawyers, a spell at Ofgem, Ofwat, Ofcom and either of the FSAs (Food Standards Agency or Financial Services Authority) is regarded as an easy way of re-entering a private sector career on a higher rung and on a higher pay scale. There is concern, too, that the relationship between the two sides can be just a bit too cosy sometimes and that is not helped when it becomes apparent that regulator and regulatee once worked together.

However, in general, the two-way traffic in personnel between regulators and regulatees is a good thing, breeding better understanding on both sides.

The fact that Hector Sants, chief executive of the Financial Services Authority, has a background in banking at UBS and Credit Suisse undoubtedly boosts his standing and credibility when dealing with City institutions. He understands the frustrations that a nitpicking compliance culture can foster.

Similarly, ex-regulators can help to introduce the best of compliance culture into private companies and can help to steer them in directions regulators want.

Relationships between regulator and regulated do not have to be prickly and confrontational. Most private companies just want clarity on where they stand and what they are and are not allowed to do. Having an ex-regulator on the staff can be a great asset — not just for the private company, but for the people still regulating it too.

patrick.hosking@thetimes.co.uk

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