Monopolies commission labelled a 'soft touch'

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The Independent Online
LABOUR yesterday called for the sacking of the chairman and other leading members of the Monopolies and Mergers Commission, amid claims that it had become a 'soft touch' for industry and was no longer representing the consumer.

Nigel Griffiths, Labour's spokesman on consumer affairs, said the commission was now a 'laughing stock' after consistently ruling against consumer interests in recent reports. He called on Michael Heseltine, the President of the Board of Trade, who appoints the commission, to 'remove the top people forthwith'.

Mr Griffiths's call follows charges by the Consumers' Association that the commission had effectively supported big business against the consumer in 8 of its 10 latest reports. It claimed it had become a 'toothless watchdog . . . now impossible to defend in its current form'.

According to Stephen Locke, the association's director of policy, MMC reports on areas including new cars, perfume prices, ice-cream, mortgage valuations and compact discs have proved 'disastrous' for consumers.

Several of these had uncovered complex monopolies which had 'astonishingly' been seen as not being against the consumer interest.

'The trend represented by these reports is unmistakable,' said Mr Locke in the latest issue of Consumer Policy Review.

'Far from being the fearless guardian of the consumer interest it should be, the (MMC) . . . reports have become progressively more corporatist in tone and supportive of the status quo.'

The commission yesterday described the claims as 'absolute rubbish' and said they stemmed from a widespread misunderstanding of its role.

A spokesman said: 'The Consumers' Association calls us a watchdog but we are not a watchdog. That title more properly belongs to the Office of Fair Trading. Our job is purely and simply to focus on the public interest and to make judgements on it.'

Consumers formed only part of the public interest, he added. The commission also had to consider issues such as employment and promoting Britain's international trading position through competition and the use of new techniques and products.

Many of the criticisms relate to the last 15 months, when the commission, under a new chairman with a business background, has appeared to take a much stronger pro-industry line.

Graeme Odgers, who became chairman in April 1993 and was the first non-lawyer to head the MMC, has spent much of his career in industry. On his appointment he was widely seen as 'Heseltine's man'.

HISTORY OF DISPUTED REPORTS

THE MMC's reports over the past two years included:

New car prices and dealerships: Difference in prices between UK and Europe were found to be 'not important'. Quality of sales and repair service by dealerships ignored;

Television broadcasting services: Recommendations had to be augmented by extra rules suggested by Department of Trade and Industry;

British Gas: 'Timid' recommendation of gradual lifting of domestic monopoly;

Fine fragrances and perfumes: 'One of the biggest disappointments so far', allowing manufacturers to continue unfair discrimination against cut-price shops;

Ice-cream: MMC refused to acknowledge any damage to public interest from a system that keeps rival products out of many small shops;

CDs and cassettes: Record companies cleared of overpricing CDs - based on survey which found only 'modest' price differences between the UK and the US.

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