Budget 1999: Competition - Crackdown on airports and utilities

THE SECRETARY of State for Trade and Industry, Stephen Byers, will today outline a new competition policy following comments made in yesterday's Budget.

The policy will have measures to encourage competition in airports and the water companies whilst requiring the Financial Services Authority to produce league tables on the cost and charges of savings, insurance and pension products. The Chancellor said the tables will give consumers a better deal and avoid the mis-selling problems of the past.

In a speech that devoted a substantial section to competition policy, Gordon Brown said competition was the sharpest spur to enterprise and was: "too often missing in our country".

He said: "It is time for more competition and lower prices in basic essentials like the utilities, financial services, indeed the whole range of consumer goods, where too often British people are paying far more than they should for what they need to buy. It is wholly unacceptable that consumer goods can still cost up to twice as much in Britain as in America."

There have been complaints from consumer groups about consumer goods such as cars, compact discs and groceries which are more expensive in the UK than in other major Western nations.

The Office of Fair Trading will be granted 20 per cent extra resources and be charged with a pro-active remit to "root out cartels and restrictive behaviour". Obstructing investigations will be a criminal offence, the Chancellor said.

John Prescott, the deputy prime minister, will review competition in airports and in the water industry.

BAA, the company which controls seven airports including Gatwick, Heathrow and Stanstead, welcomed the move saying it had nothing to hide.

Des Wilson, BAA spokes-man, said: "The government's actions are perfectly reasonable. The regional airports could probably do with more help as the main London airports reach capacity. Our landing charges are amongst the lowest in Europe and we have provided top class services." He pointed to the pounds 450m investment in the Heathrow Express rail link which opened last year.

The investigation into water competition was welcomed by the major companies. Thames Water said: "This is the sort of thing we have been pushing for. Greater competition at home can only help us compete on the international stage."

The Chancellor's announ-cement came after Ofwat, the water industry regulator, said in October that companies may have to cut customers' bills by as much as 20 percent from April 2000. Some water companies have argued that a cut will undermine their efforts to improve customer services and water quality. Last month the UK water industry wrote to Mr Prescott complaining that it will not be able to meet the government's demand to cut costs and increase environmental spending.

Nigel Hawkins, analyst at Williams de Broe, a City stockbroker, said reforming the water industry would be very difficult as there is no central system. Shares in BAA and the water companies fell in late trading.

Commenting on the new requirement for the Financial Services Authority to publish league tables on savings, insurance and pension products, Scottish Equitable said that costs should not be the only consideration when investing in a savings or pension vehicle: "It is dangerous to say: `Cheapest is best.'"

Stewart Ritchie, director of the group's pensions development, said the government should not: "gloss over what has already been readily accessible to the investor from many customer-oriented providers".

The Building Societies Association praised the requirement for banks and building societies to publish reliable information on mortgage and savings prices. "In the competitive mortgage market such information will act as a valuable aid for consumers trying to weigh up the competing offers," said Adrian Coles, director-general of the BSA. Infor- mation should be consistent so that consumers can compare like with like, he added.

The Halifax said: "We will have to see the full proposals but there have already been some moves to ensure accurate comparisons can be made."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future