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Thursday, 15 April 2010

The Liberal Democrats, competition and regulation

Today it's the turn of the Liberal Democrats. They have two specific proposals for competition law. The first is to restore the public interest test in merger control so that regulators can consider a broader range of factors. This misses a key point in the Enterprise Act arrangements, namely that unelected regulators (the OFT and the Competition Commission) are quite good at deciding on competition matters, but don't have greater expertise on non-competition matters. Hence a regime for specified public interest matters, involving the Minister. This would take us back to the Fair Trading Act system, although without the politicians and, much as I have respect for members of the Competition Commission, letting them loose on non-competition factors could be quite worrying.

The second idea is to introduce a local competition test for all planning applications for retail developments, which is a development of the Competition Commission's remedy in the Groceries investigation. This is linked into establishing a local competition office within the OFT which will investigate anti-competitive practices at a local and regional level. I suspect that the OFT will be surprised to discover that it doesn't do this already!

The banks come in for a predictable bashing and those which have public support will be split into retail and investment banks.

In energy, rising block tariffs will apparently become compulsory. So that will help to make the industry more competitive – not.

Unfairness in water charging will be addressed by consulting on the implementation of the Walker review, there will be a crack down on wasting water (I think they mean leakage here) and compulsory smart meters will be installed in areas of water stress.

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