Government policy on competition, cartels and monopoly power has been "marked by lack of will, dither and uncertainty", according to Sir Gordon Borrie, former director-general of Fair Trading. His attack, in evidence to the House of Commons Trade and Industry Select Committee, adds to growing pressure for an overhaul of competition authorities in Britain.
Sir Gordon said his views were borne out by "the fact that no legislation has been brought forward to render unlawful agreements and concerted practices which have the object or effect of restricting, distorting or preventing competition".
Immediate action was needed to make price-fixing arrangements illegal and liable to immediate penalties. Under the present system, the Office of Fair Trading cannot impose retrospective penalties, in effect encouraging such arrangements, untilthey are discovered.
Sir Gordon also believes abuse of dominant market power should beprohibited and subject to penalties when discovered. A combination of a prohibition system for the abuse of market power with a continuation of wide-ranging general investigations of an industry was a reasonable option for legislative change.
His evidence follows a strident attack on the competition system made in February by Sir Bryan Carsberg,director-general of the Office of Fair Trade, who is due to leave on 19 May. Sir Bryan also called for a prohibition approach to restrictive practices with stiff fines. He went further than Sir Gordon, suggesting the OFT and the Monopolies and Mergers Commission should be replaced by a unitary authority that would also take on much of the competition role of the Department of Trade and Industry.
The Trade and Industry Committee is expected to propose a radical overhaul of competition policy and the three-pronged approach of the DTI, MMC and OFT. The committee has yet to decide on its final recommendations,due to be published after Easter. The report comes at a sensitive time for the Government, which has yet to name a successor for Sir Bryan.
The committee has been impressed by the German Cartel Office, which has a more powerful role than the OFT. Sir Gordon said he was"ambivalent" towards the idea of a unitary competition authority. However,the OFT had important roles outside competition, he said.