Carsberg to leave OFT before successor found

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The Government yesterday appointed a temporary director- general to the Office of Fair Trading because of delays in finding a permanent successor to Sir Bryan Carsberg, who leaves today.

Jeffrey Preston, the current deputy director of the OFT, is to hold the fort for a few weeks while Michael Heseltine, President of the Board of Trade, continues negotiations with outside candidates.

There is a short-list of two, with Nigel Whittaker, who left Kingfisher earlier this year with a pounds 950,000 pay-off, believed to be second favourite.

The delay emerged as Sir Bryan and Britain's other top competition policeman, Graeme Odgers, chairman of the Monopolies and Mergers Commission, fell out in public over whether the UK's system for controlling monopolies and abuses of commercial power is working.

Sir Bryan's parting shot in his final annual report was that he would like Britain to merge the MMC and the OFT and shift to a competition policy based on the system used in Brussels.

The new competition body would have the power to prohibit anti-competitive acts by companies and levy fines, as the European Commission competition directorate now does.

Companies would be entitled to appeal against decisions through the courts or to a specialist tribunal.

He said this prohibition approach would "introduce a potent element of deterrence of kinds of behaviour that can work strongly against the interests of consumers".

Sir Bryan has already detailed his views to the Commons select committee on trade and industry. The MPs are to back Sir Bryan in a report on competition reform next week.

Mr Odgers, in a signed article in the Financial Times timed as a riposte to Sir Bryan, said he would like to keep the system much as it is now, with only minor modifications, because he believed it was "basically sound".

Currently, inquiries into abuses of commercial power begin at the OFT, which does most of the investigations. The OFT's most powerful weapon is to recommend to the Secretary for Trade and Industry that an issue be sent to the MMC for examination. The crucial decisions of whether to make the reference and whether to act on the eventual recommendations are the responsibility of the Secretary of State.

Sir Bryan claimed the system needed an overhaul and should be less subject to political influence.

Mr Odgers agreed that the OFT could be allowed to make references directly to the MMC, but he insisted that final decisions on what to do after an investigation should stay with ministers.

Sir Bryan is quitting half way through his five-year term. He denied in his report that this was because of dissatisfaction with the set-up in the UK.

But he is widely believed to be frustrated at the way his views have been all but ignored by Mr Heseltine.

Sir Bryan is very much a champion of the consumer, keen to attack companies that abuse their power, as he did recently in a forthright report criticising the way endowment mortgages are sold by banks and building societies.

Mr Heseltine, in contrast, does not believe such instincts should be allowed free rein to the point that they damage the interests of British business. Mr Odgers, a former director of BT, shares Mr Heseltine's views.

While the OFT has become increasingly strident in its consumerism, the MMC's recent record has leant the other way in reports on products such as perfume and compact discs, where it has been accused of favouring business at the expense of consumers.

Extra powers for the OFT in the narrow area of restrictive practices legislation have repeatedly been promised by the Government since 1989, but have failed to emerge.

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