Competition and Markets Authority

Lord Callanan Excerpts

Thursday 25th June 2020 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government what plans they have to ensure that the interests of (1) consumers, and (2) businesses, in the United Kingdom, are independently and fairly looked after following the resignation of the Chairman of the Competition and Markets Authority.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government are committed to ensuring that markets work well for consumers and businesses and have already ensured that the Competition and Markets Authority has significant powers to investigate and act if it finds that companies are behaving anti-competitively in a market. The CMA will continue to carry out its important functions. We will announce next steps on recruitment for a new chair in due course.

[Lord Berkeley (Lab) [V]]

My Lords, I thank the Minister for that Answer. Does he agree that, for the CMA to do its job properly and enable business to plan in relation to Brexit, the Government must have a robust, updated and properly structured competition policy? I heard what he said, but how will this be achieved? On the latest information I have, the CMA responded with a comprehensive plan on 21 February 2019. Since then, there has been nothing until a letter to the chair of the EU Select Committee arrived at 11.02 this morning; I declare an interest as a member of its sub-committee. Will the Government urgently introduce legislation on competition policies to support consumers in the UK and UK business?

--- Later in debate ---

[Lord Callanan]

We committed in our manifesto to tackle consumer rip-offs and bad business practices. The issues that the noble Lord, Lord Tyrie, set out in the CMA’s letter have helped shape public debate as well as informing government action. For instance, he said that consideration should be given to how to capture the benefits for competition and consumer welfare of the growth in the digital economy. We agree and have set up smart data proposals that we look forward to implementing.

[Lord Desai (Lab) [V]]

My Lords, through the 100 days of Covid we have heard many complaints from consumers who have not been refunded for cancelled trips and cancelled products by the sellers; they have had no recourse. It is a serious situation that the Government ought to look into. If the Government are to make the UK globally competitive after Brexit, as they have promised, it is very important that they adopt a competition policy in line with the latest research in economics. I think they need an economist to head that authority, but the noble Lord, Lord Tyrie, will be difficult to replace.

[Lord Callanan]

I agree that we need a robust competition regime in the UK. That is what we have; the CMA has already announced reviews into many of the practices that the noble Lord highlighted, taking action against profiteering from some pharmaceutical companies, for example. We will not hesitate to take further measures if required.

[Baroness Kramer (LD) [V]]

My Lords, on the Parliamentary Commission on Banking Standards I saw the determination of the noble Lord, Lord Tyrie, to protect ordinary people and businesses from abuses of power in the financial sector. Frankly, if he says that more powers are needed, then more powers are needed. We currently face the dominance of big tech, rip-offs related to Covid, and deregulation following Brexit. Will the Government, instead of being so complacent, urgently implement his proposed reforms to make sure that the consumer, at the very least, has a powerful champion with powerful teeth? If not, we will have a very angry and abused public.

[Lord Callanan]

We are taking action on these matters. We asked the CMA to lead two critical pieces of work: to report on the state of competition, and to set up the digital markets taskforce. The CMA remains one of the world-leading competition authorities. If necessary, we will build on that.

[Lord Randall of Uxbridge (Con) [V]]

Following on from the Furman report, does my noble friend agree that government regulation around those digital platforms should be implemented as soon as possible? Can he give any indication when that might happen?

[Lord Callanan]

We accepted the recommendations of the Furman report in the Budget earlier this year. We are considering what further steps need to be taken.

[Baroness Falkner of Margravine (Non-Afl) [V]]

My Lords, following on from the noble Lord, Lord Randall, does the Minister accept that on consumer welfare it is difficult for us to have confidence in his reassurances? When the Government announced this digital markets taskforce a few months ago, they said that

“any future interventions must strike the right balance between promoting competition and innovation on the one hand and avoiding disproportionate burdens on business on the other”.

There was no mention of consumer welfare interests. It is difficult to see how we will make progress on that front, which is what most people worry about when they think of digital market abuse.

[Lord Callanan]

Consumers are best served by free and open competition, appropriately regulated, between businesses. The welfare of consumers is always at the forefront of our thoughts on this.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Minister rightly says that consumers depend on fair competition. The outgoing chair has said that the powers of that competition body are not sufficient. He recommended increased powers, and the then Government were very responsive. The Minister has today refused to build on that and say that they will give it new powers. I ask him again: will the Government implement the call for new powers and commit themselves to the absolute independence of the new chair of the CMA?

[Lord Callanan]

On that final point, we will of course run a full and open competition process. We will appoint the best person for the job. We committed in our manifesto to tackle consumer rip-offs and bad business practice. Where we need to give the CMA new powers, we will look at that, but it already has extensive powers, as proven by the cases it is currently pursuing. It is one of the leading regulators in the world and, as I said, we will look at giving it additional powers if necessary.

[Lord Clement-Jones (LD) [V]]

My Lords, the noble Lord, Lord Tyrie, and Professor Furman have clearly spelled out the challenges of the digital age. I heard what the Minister said on this, but do the Government intend to address these issues or will they continue to allow big tech to rampage across our economy in digital markets such as social media, e-commerce, search and online advertising? Will the Government set out their proposals any time soon?

[Lord Callanan]

The regulation of digital e-commerce is extremely important. As I have said, the CMA has set up the digital markets taskforce to study these matters, but they are complicated. This country has one of the best competitive markets in the world and digital markets are an increasingly important part of that. We will look at what further measures need to be taken.

[Baroness Crawley (Lab) [V]]

My Lords, given the unprecedented pressures on consumers from both Covid-19 and the prospect of leaving EU markets at the end of the transition period, will the Government prioritise the CMA’s reforms as set out under its very effective chair, the noble Lord, Lord Tyrie? When will a date be announced for a new competition and consumer protection Bill, as suggested by my noble friend Lord Berkeley?

[Lord Callanan]

I will correct the noble Baroness: we will not leave EU markets at the end of the transition period. We seek in the negotiations to ensure continued access to those markets and for EU companies to have access to UK markets. That is the whole point of the negotiation. We keep all these matters under constant review. We will build on the powers of the CMA if that is required for what consumers need.

[Lord Moynihan (Con) [V]]

My Lords, does my noble friend accept that if the Government are to continue to prioritise consumer protection, they urgently need to address the necessity of strengthening the CMA and legislation to protect consumers, as stated across the Chamber today?

[Lord Callanan]

At the risk of repeating myself, of course we keep these matters under constant review. We will see the outcome of the Digital Markets Taskforce that the CMA is currently involved in and, if necessary, we will take further action.

[The Deputy Speaker (The Earl of Kinnoull) (Non-Afl)]

The noble Lord, Lord Rogan, is not available, so we will go straight to the noble Lord, Lord Hain.

[Lord Hain (Lab) [V]]

My Lords, surely the noble Lord, Lord Tyrie, standing down is a devastating indictment of the unwillingness of Tory Ministers to permit him to do his job properly, as well as the Government’s subservience to vast vested interests and the immense power of digital platforms at the expense of customers and competition. The Covid pandemic means that there will be lots of business casualties, allowing national and especially local monopolies to trample over customers. I am sorry, but the Minister is not coming clean with us; the noble Lord, Lord Tyrie, is both honourable and highly capable: will he tell us straight, please, why Ministers have been so shamefully subservient to tycoons, plutocrats and dodgy dealers that he, an eminent fellow Tory, has been forced to resign from a job he wanted to do properly?

[Lord Callanan]

Well, characteristically the noble Lord has a great grasp of hyperbole, but I do not think that he is fairly characterising the situation here. It is a complicated area of detailed policy. We have an excellent competition regime in this country, the CMA is a highly regarded regulator and, as I said, we will consider giving it additional powers to protect consumer and business interests if that is required.

[The Deputy Speaker]

My Lords, all the supplementary questions have been asked. Therefore, that concludes the hybrid proceedings on these Oral Questions.