Carsberg hits at 'rag-bag' competition law
Monday 26 February 1996
A strong attack on the Government's competition policy will be made today by Sir Bryan Carsberg, who quit as director general of the Office of Fair Trading last spring.
Sir Bryan, veteran of several clashes with government ministers, particularly Michael Heseltine, claims the case for a radical overhaul of competition policy is overwhelming.
He also argues strongly that there should be a single authority combining the Office of Fair Trading and the Monopolies and Mergers Commission to reduce the overlap in investigations.
This particular view is likely to bring about fresh debate in the House of Commons since the calls made last May for a merger of the Monopolies and Mergers Commission and the OFT by an all-party trade an industry select committee have not been acted upon by the Government.
Sir Bryan says: "One key advantage of a small and mainly full-time commission would be the ability to make statements of policy to guide business about the kinds of behaviour regarded as acceptable, and the principles which would be brought to bear in making decisions about competition policy."
Besides calling for the OFT and MMC to be housed under one roof, Sir Bryan says there is a strong need to rationalise competition law. "In the early years of the application of present laws, the UK was in the forefront of international developments.
"Our laws still have much merit in them. We could again join the leaders. But to do so, we need thorough reform."
The thrust of his case, made in a booklet titled Competition Regulation the British Way: Jaguar or Dinosaur? and published by the Institute of Economic Affairs, is that compet- ition brings powerful benefits to consumers and is usually a much better approach than detailed regulation.
The "rag-bag" development of a string of statutes has created a complex structure of competition law.
Statutes passed since the early 1970s include the Fair Trading Act 1973, the Competition Act 1980, the Restrictive Trade Practices Act 1976, the Resale Prices Act 1976 and several peripheral Acts affecting the utilities and other sectors.
Without naming names, Sir Bryan also gives an insight into some of the political frustrations he encountered while at the OFT. In particular, he criticises the role of ministers who, he says, are too involved in many day-to-day competition cases.
"Most of the decisions involved in competition policy, it seems to me, should be treated as matters of law enforcement rather than political matters.
"It seems inappropriate for ministers to be making decisions about whether refusal to supply should be allowed or whether a particular accusation of predatory pricing should lead to action."
He adds: "Political involvement also adds to the complexity of decision- making and the involvement of different ministers in different cases may also bring questions about consistency.
"The role of ministers is to formulate the general policy and competition professionals should implement the policy."
Now secretary general of the International accounting Standards Committee, he claims that he did not "always feel entirely satisfied" by the response from the Monopolies and Mergers Commission over some investigations into companies refusing to supply scarce and essential resources.
"My concern with refusal to supply by a dominant supplier is that it can produce significant harm for the ultimate customer. It can inhibit the development of new forms of retailing. It may also be used to work against discounters.
"Perhaps most seriously of all, it may be used to inhibit the development of electronic forms of retailing in the future.
"I simply think the customer should be free to decide through the marketplace and I am concerned if the behaviour of business prevents new approaches from having fair opportunities."
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