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
News
US comedian Bill Mahr
people
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Sport
football
News
Rob Lowe
peopleRob Lowe hits out at Obama's snub of Benjamin Netanyahu
PROMOTED VIDEO
News
Davies (let) says: 'Everybody thought we were having an affair. It was never true!'
people'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Arts and Entertainment
Over their 20 years, the band has built a community of dedicated followers the world over
music
News
Staff assemble outside the old City Road offices in London
mediaThe stories, the writers and the changes over the last quarter of a century at Britain's youngest paper
Life and Style
The Oliver twins, Philip and Andrew, at work creating the 'Dizzy' arcade-adventure games in 1988
techDocumentary looks back at origins of the computer-games industry
Arts and Entertainment
Krall says: 'My hero player-singer is Elton John I used to listen to him as a child, every single record
music
News
Friends for life … some professionals think loneliness is more worrying than obesity
scienceSocial contact is good for our sense of wellbeing - but it's a myth that loneliness kills, say researchers
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Wu-Tang Clan will sell only one copy of their album Once Upon A Time In Shaolin
musicWu-Tang Clan and The Sexual Objects offer fans a chance to own only copies of their latest albums
News
i100
Environment
Number so freshwater mussels in Cumbria have plummeted from up to three million in the 20th century to 500,000
environment
Life and Style
Models – and musicians – on the catwalk in Dior Homme for the men’s 2015/16 fashion show in Paris
fashionAt this season's Paris shows, various labels played with the city boys' favourite
News
i100
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

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us