Prioritise easing the cost of living, market watchdog told
BRITAIN’S competition regulator is to be told to focus on boosting growth and easing the cost of living, amid concerns the watchdog may have been blocking deals that would help the economy.
Kemi Badenoch, the Business Secretary, is preparing a “strategic steer” that will formally ask the Competition and Markets Authority to promote “supplyside growth and investment” while protecting competition and ensuring lower prices for consumers.
The business department said: “Too often growth has not been given the priority by regulators that it needs and we are determined to change that.”
The intervention comes after Jeremy Hunt, the Chancellor, appeared to voice private frustrations with the CMA last month when asked about its decision to block Microsoft’s $69billion (£55billion) takeover of Activision, the video games giant behind
“One of the reasons that companies like Microsoft and Google want to invest in the UK is because we have independent regulators that aren’t controlled by politicians,” Mr Hunt told a business conference.
“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth.” One government source said that strategic steers are not binding and may be ignored by the CMA. “They don’t need to take any notice”, the source warned.
But a draft version of the document being drawn up states that “the Government’s overarching expectation is that the CMA should focus on achieving outcomes that help consumers and businesses to meet cost of living challenges, while also boosting sustainable growth and productivity, and maintaining and enhancing the UK’s position as a leading global destination for investment”.
The move comes as part of an attempt to take a “smarter” approach to regulation in order to grow the economy.
In a paper setting out the approach, Mrs Badenoch’s department said that Brexit was a “historic moment for this country, giving us for the first time in many decades the final say over the way we regulate”. It adds: “We do not consider regulation to be a dirty word, but it must be used only where necessary and be implemented in a way that provides the right foundations for our economy to thrive.”
The business department said: “Each of us as consumers lose out when such regulation blocks innovation and competition, increases prices or lowers the quality and choice of goods and services available.”