View from City Road: Fair-trade watchdog needs more teeth

The Office of Fair Trading is caught between a rock and a hard place. It is supposed to champion consumer protection and free competition yet it often finds itself powerless to act. On one side is the Consumers' Association, which urges it into ever more daring assaults on vested business interests. On the other is the Monopolies and Mergers Commission, which sometimes seems an adjunct of the Department of Trade and Industry with its policy of unfettered rights for business.

Eight out of 10 of the OFT's recent references to the MMC have been rejected. Sir Bryan Carsberg's organisation is getting an unenviable reputation for being trigger-happy - firing off complaints only to have them deflected by the MMC. Recent MMC investigations have cleared the perfume industry, ice-cream companies and compact disc manufacturers of anti- competitive practices.

Many in the business world regard Sir Bryan as little more than a publicity seeker. Those who know him would tell you otherwise. Even so, he is plainly finding the going a lot tougher at the OFT than he did at Oftel, where knocking BT was comparatively easy sport.

Sir Bryan is too much the diplomat to make a public criticism of the MMC, though his irritation showed yesterday when the OFT's annual report was published. 'The MMC is a very professional organisation,' he said, adding: 'Although I do not agree with every decision they have made.'

If, as many believe, the MMC has swung behind Michael Heseltine's championing of business against the consumer, perhaps a counterweight would be to give the OFT greater powers. Most OFT officials are drawn from the Civil Service and return to Whitehall after their secondment.

Greater political independence would enable it to stand up and be counted instead of lurking in shadows. Allowing the OFT to recruit key figures outside Whitehall would be a significant step. So would allowing it greater powers of investigation and access to corporate files. None of this would impinge on the MMC's role as inquisitor, judge and jury. But it might save many pointless references, and lead to a more credible competition and fair-trading watchdog.