Outlook: Nothing to fear from the competition bill

Adair Turner, director-general of the Confederation of British Industry, has a recurring nightmare. He is woken at five in the morning by the sound of a sledgehammer coming through the front door. He goes downstairs in his pyjamas to discover a team of official-looking types rifling through his papers. When he protests, he is warned that failure to answer their questions may result in criminal prosecution. They prepare to leave, clutching several boxes marked Monthly Industrial Trends Survey. As they walk out, taking care to put the door back on its hinges, their leader, a surly fellow called Bridgeman, turns and says the CBI has been abusing its dominant position in the supply of fatuous economic reports for far too long. Later that day it is fined 10 per cent of its turnover.

The CBI does not much care for the Goverment's new Competition Bill, which was published yesterday and gets its second reading in the House at the end of the month. It thinks the powers it contains are draconian, parts of the legislation unenforceable and the costs of compliance totally unreasonable.

This is quite a turnaround. It was only a few months ago that the organisation welcomed with open arms the Government's determination to sweep away the anachronistic and ineffectual mechanism of the Restrictive Trade Practices Act and put UK competition law on a modern footing based on Articles 85 and 86 of the Treaty of Rome.

As the fine print of the Bill has emerged, however, the business community has become more and more frantic. A horrible vista is conjured up of companies being subjected to the double jeopardy of regulation by London as well as Brussels, of consumer organisations pursuing businesses relentlessly through the courts, and of over-zealous antitrust officials plundering their way across the industrial landscape in a never-ending orgy of dawn raids.

Reform competition law by all means, but do we have to be so heavy handed? You bet. By coincidence, on the very day the Bill was published, the Restrictive Practices Court finally got around to making orders against 13 companies operating a price-fixing cartel in ready mixed concrete - nine years after the case commenced.

In its tirade against the Bill, the CBI has largely missed the point that the legislation is actually about deterrence, not punishment. The form-filling nature of the existing legislation has made it simple for any executive with half a brain and a smart lawyer to draft a way around its provisions and the OFT's lack of teeth has meant that cartels only got their comeuppance when the boys from Brussels came calling.

The new legislation has swiftness of action and stiffness of penalty on its side - which should be enough to deter all but the most dedicated cartels. Moreover, businesses themselves will be the beneficiaries as much as consumers, since cartels do not discriminate between categories of victim.

The Bill, as it was first drafted, may not have been perfect in all respects and there will be further amendments as it passes through its parliamentary stages. But the CBI's argument that the Bill should be made more, not less, prescriptive in the contentious area of abuse of dominant position, for example, sits oddly with its general philosophy on regulation.

The DTI may yet find that its latest estimates of compliance costs are still too low, but the benefits which should flow from more effectively regulated markets should far outweigh these concerns. Well run businesses should have nothing to fear from the legislation. The CBI ought to be applauding, not sniping from the hills.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power