Competition (Amendment etc.) (EU Exit) Regulations 2020

Baroness Neville-Rolfe Excerpts

Monday 16th November 2020 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I start by supporting an intelligent policy on competition. As Ovid, one of my favourite classical writers, said:

“A horse never runs so fast as when he has other horses to catch up and outpace.”


When one gets fed up with the sheer scale of Amazon, one ought to remember this wisdom.

I will always be grateful to the CMA in its previous guise as the Office of Fair Trading, because it took a case that brought us over-the-counter medicines. These have been a huge boon that we would never have had without its brave fight against the medical and pharmaceutical vested interests—a huge consumer benefit worth billions in recent years.

However, over the years, the competition authorities, using the existing powers to which my noble friend the Minister referred, have had a tedious obsession with the inequities of the latest tall poppy, usually shortly after the temporary period of monopoly profits has passed. I have seen that in my life several times—with the brewing sector, now a fraction of its one-time status thanks in part to the counterproductive beer orders; in ice cream; in dairy, where we still struggle to compete with European cheese and yoghurt manufacturers; and in supermarkets where, during repeated inquiries, the shops’ profits were shown to be a fraction of those in regulated industries such as utilities and/or in banks before the crash. True to form, the banks were finally investigated after the devastation of the financial crisis. Even so, I believe that small banks still operate at a disadvantage, although I am glad to see that Sam Woods, deputy governor at the Bank of England, is examining ways of lightening their burden.

I should refer to the register and my interest as a director of a small bank and a shareholder in Tesco and Amazon, although I am better known for my passion for small business dynamism, fuelled by competition, because it underpins a strong economy. I like to speak up for business when I can, because it pays and collects the taxes that nearly all pay and which in turn pay for almost everything in the public sector, and it provides many productive jobs.

Against this background, I thank the Minister for his clear explanation of the amending SI, including the way current EU cases will be treated and any follow-on damages. I look forward to his answer to my noble friend Lord Lansley’s question about vertical agreements, market share and the National Security and Investment Bill—though I think that is for another day—and my noble friend Lady McIntosh’s question on roaming charges.

As a result of an SI last year, and this one, the CMA will have even more powers than before Brexit, and in theory will be able to exercise a chilling effect in even more areas. I worry that it will be able to impose its huge fines in relation to even more aspects of competition law. We are talking here about British businesses trying to make a living and get through Covid without sacking too many staff.

Although this is not directly relevant today, perhaps I could say in passing that I do not agree that some fines should be increased, as the noble Lord, Lord Tyrie, hinted in Committee on the United Kingdom Internal Market Bill. I suspect he has less experience than I do of being on the business side of an argument with the regulator, and has little idea how terrifying it can be and how distracting for management.

I believe in competition, so in the round I support the CMA, but it has to have the right culture. Can the Minister comment on how best we can achieve that in the new post-Brexit era? The new chair will also be important, and perhaps he can update us on that appointment.

Further, does the Minister accept that we need to look at competition matters through the prism of the national interest? I have been struck by how other member states do this, and I am sure we will see more protectionist competition policies in Brussels now that we have left. I used to have tussles in the Competitiveness Council on the drift to protectionism, which I opposed. That was especially so with the French—their representative was usually a young, good-looking and very persuasive sometime banker called Emmanuel Macron—and with the German Minister, who represented one of the socialist elements in the German coalition. They were keen to erect barriers to help their tech and telecoms sectors. History shows that that is an ineffective strategy.

Finally, does my noble friend agree that we need officials who are skilled and well motivated at the CMA, and who understand the importance of not being both judge and jury? We need a good mix of talent with the right values, objectivity, economic awareness and understanding of data—and not too many from magic circle legal firms here, and their equivalent overseas, bringing their MoJ-style ways, sometimes making a mess and then moving quickly back to private practice.

I do not object to the regulations, but I would like to know how the Government will ensure that all parts of the CMA are well run and effective and, as I said earlier, operate in the national interest in the post-Brexit world. As the Minister said in his opening remarks, we will have a sovereign regime, and we must make a success of it.