Business leaders oppose plans to jail price-fixing directors

The Queen's Speech: Business

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Opposition was building among business groups last night to plans outlined in the Queen's Speech to imprison executives guilty of price-fixing.

Stronger deterrents to anti-competitive behaviour, including the possibility of criminal penalties against cartels, will be proposed in an Enterprise Bill, as part of a package of measures to boost economic growth. The Confederation of British Industry said it would scrutinise the proposals on competition policy to ensure they tackled "real problems in a proportionate way". John Cridland, the CBI's deputy director general, said: "That is especially true for the proposed criminal penalties for operators of cartels, which could be premature."

Ruth Lea, head of policy at the Institute of Directors, said: "We remain concerned about the proposed threat to imprison directors involved with cartels and we are very disappointed nothing is being done to address the avalanche of employment regulations which is engulfing business."

Business groups applauded ministers for plans to promote enterprise and cut burdens on employers through an Enterprise Bill. The Government confirmed plans to set up an independent competition regime and boost innovation and entrepreneurship.

The Government will transfer responsibility for decisions on company mergers from ministers to the Office of Fair Trading and the Competition Commission. It said it was committed to "radical reform" of the competition regime to ensure decisions were taken by "strong and independent" competition authorities.

The Bill will also include: reform of the insolvency laws to "de-stigmatise" business failure, but hand out harder penalties for dishonest practice; new powers to deal with rogue traders, who will face unlimited fines and jail terms if they repeatedly break the law; and new procedures to alert ministers to regulations that could damage competition.

Deirdre Hutton, chairman of the National Consumer Council, said: "Consumer protection looks set to advance further this year and next than it has for decades."

The National Association of Citizens' Advice Bureaux welcomed the pledge to strengthen consumer protection.Nicola Simpson, director of policy and public affairs, said: "The litmus test will be whether these measures are effective in stopping bogus home-working schemes, oppressive debt collection practices and rogue traders who prey on the vulnerable."