Competition and Markets Authority Chairman

(Limited Text - Ministerial Extracts only)

Monday 27th January 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, the Chartered Institute of Personnel and Development has called on the Government to conduct a meaningful consultation with businesses. Instead, the Government convened the regulators to seek advice on how to drive growth. Is the Minister aware that the union-authored Employment Rights Bill will create another raft of regulations which will further weaken an already damaged employment landscape? As a business founder and employer, does she believe that that Bill, which is due in your Lordships’ House soon, will really drive the growth agenda?

[The Minister of State, Department for Business and Trade and Treasury (Baroness Gustafsson)]

My Lords, commenting to the regulators about supporting the Government on their number one ambition of growth is entirely appropriate. Effective regulation is essential to delivering growth. The Prime Minister has been clear that regulators have a vital role to play, and that includes the CMA. I do not believe that working on things like the workers’ rights Bill is at contradiction with the terms of both powering economic growth and making sure that our workers are protected.

[Lord Clement-Jones (LD)]

My Lords, I welcome the Minister to Questions. The Chancellor has said that every regulator, no matter in what sector, has a part to play by tearing down the regulatory barriers that hold back growth. Given the Minister’s background, she will understand the benefits of strong and healthy competition in the digital economy, particularly for SMEs. What assurance can she give the House that the sacking of the chair of the CMA and the appointment of Doug Gurr, a former country head of Amazon, which itself is subject to current and recent CMA investigations, will not lead to weaker competition and consumer protection enforcement? Are the Government still committed to the new digital markets regime that we have all taken several years to install? Are they now going soft on US big tech in a whole range of digital services—operating systems, app stores, browsers, search engines, digital advertising and cloud services—or are we meant now to include our UK SMEs among the so-called blockers?

[Baroness Gustafsson (Lab)]

I thank the noble Lord for his question, which I have broken down into four points that I hope to address. First, I thank him for his welcome; it is very much appreciated, and it is a pleasure to be here answering questions in front of noble Lords. Secondly, I do not accept the characterisation of us sacking the chair of the CMA; Marcus Bokkerink resigned as chair and the Government are committed to the operational independence of the CMA. Thirdly, on whether the CMA is going soft, especially regarding digital markets, the CMA has new powers under the Digital Markets, Competition and Consumers Act and is already using them fervently for investigations into Google and Apple. The Government are committed to the independence of the CMA and making sure that we create an industry that is open to free and fair competition.

[Lord Lansley (Con)]

My Lords, the newspapers all seemed to think it was relevant to cite the decision of the CMA in relation to Microsoft and Activision in the Government encouraging the chairman to step down. Does the Minister agree that, in standing up to Microsoft over Activision and the cloud gaming market, the CMA was doing what it ought to do, which is promoting and maintaining effective competition in cloud gaming services?

[Baroness Gustafsson (Lab)]

I agree that the role of the CMA is to make sure that it is providing fair, open and transparent competition within all industries. While I will not comment on the specifics of any individual case, I think the CMA in that example is doing its best to represent that competition. The Government will continue to stand by that; supporting the CMA’s operational independence, so that it can carry on doing that role as effectively as it can, is something that this Government prioritise.

[Baroness Wheatcroft (CB)]

How does the Minister expect the CMA to balance the desperate search for short-term growth with the long-term needs of consumers? Is there not a risk of a repeat of what light-touch regulation in financial services produced, leading to the 2008 financial crash?

--- Later in debate ---

[Baroness Gustafsson (Lab)]

I do not think this is about short-term growth. This Government are committed to prioritising long-term sustainable growth, and I think that goal unifies us all. The regulators have a part to play in that, which is making sure that they are reviewing the regulations through the lens of growth and understanding whether they are still fit for purpose. This is not about tearing down regulation for regulation’s sake; it is about viewing it through the lens of our goal as a Government and making sure it is aligned to that.

[Lord Watts (Lab)]

My Lords, many of us think it is about time that we had accountability for regulators. The regulators appointed by the previous Government failed to protect the public or boost the economy. Do we not need proper regulation to be applied and to make sure that the regulators are on the side of the public?

[Baroness Gustafsson (Lab)]

I thank my noble friend for that question. He is right; regulation and growth need not be mutually exclusive. This is about creating sustainable long-term growth that protects not only consumers but businesses, so that they have a fair, competitive and open ground on which to compete.

[Lord Fox (LD)]

My Lords, whether you characterise the change in chairmanship of the CMA as a sacking or not, all the government statements are clearly designed to create a change in behaviour within the CMA. If this change of behaviour had been applied for the past two years, say, could the Minister tell us which decisions the CMA made would have been different? How much more growth would we have had over those two years, had the CMA been applying the Government’s new strictures?

[Baroness Gustafsson (Lab)]

I come back to a prior answer; this is not about how we look at independent tactical decisions on a case-by-case basis and reflect on what would or could have been. This is about no longer accepting dormant growth within the economy, viewing our regulators through the lens of how we create long-term sustainable growth and making sure that we are aligned with that. To that end, we are consulting on a new strategic steer regarding the CMA, which is expected soon.

[Baroness Stowell of Beeston (Con)]

My Lords, I welcome the CMA’s recent commitment to review its approach to mergers and acquisitions and would welcome any further moves in that direction. Can the Minister tell the House what, in the implementation of the digital markets and competition regime, she has asked the new chairman to prioritise in support of UK businesses and economic growth?

[Baroness Gustafsson (Lab)]

As has been referred to, the CMA has new powers under the Digital Markets, Competition and Consumers Act. There has been no change regarding that specific policy. We have a consultation open around the strategic steer for the CMA as a whole. That is something we are expecting soon, but is more around the ongoing direction of the CMA.

[Lord Bridges of Headley (Con)]

My Lords, last weekend at Davos, the Chancellor said that growth trumps net zero. If that is the case, will the Government review and revise regulators’ remits to reflect that?

[Baroness Gustafsson (Lab)]

I thank the noble Lord for his question. As I reflect on my experience in driving investment, I do not think the two need to be mutually exclusive. When I reflect on our successes with driving investment, the green energy sector is a region in which we have seen considerable successes. This does not need to be a choice between one or the other. Executed correctly, there is an opportunity for us to drive growth while supporting sustainable energy initiatives.

[Lord Berkeley (Lab)]

My Lords, a large number of SMEs supplying Amazon have been complaining about its attitude, saying how very unfair it is and how anti-competitive some of Amazon’s policies are. Given that the new chair comes from Amazon, can the noble Baroness say that he will not bring those bad tendencies from Amazon into our wider competition environment?

[Baroness Gustafsson (Lab)]

I can hopefully provide some reassurance to my noble friend. There have already been instances where we are investigating Amazon regarding the supply of knives. There is no indication that we have any intention to go soft on these big technology companies. The new chairman’s role and experience within this industry, as well as other experiences such as the directorship of the Alan Turing Institute, will provide a wide raft of experience, which can only be advantageous and beneficial to the role.