Office of Fair Trading

Lord Naseby Excerpts

Monday 13th February 2012 Lords Chamber

Asked by

[Lord Naseby]

To ask Her Majesty’s Government what proposals they have to review the performance, management and remit of the Office of Fair Trading following the recent quashing of cases on appeal.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, last year, the Government consulted on proposals to reform the competition regime including merging the Office of Fair Trading and the Competition Commission to create a single Competition and Markets Authority. Among other things, the consultation sought views on proposals to improve the enforcement of the anti-trust prohibitions. The Government will announce their conclusions following the consultation shortly.

[Lord Naseby]

Is my noble friend aware of just how many of our great companies—British Airways, Shell, Unilever, Tesco, the Co-op and Balfour Beatty—have been investigated over several years for alleged price fixing, fined nearly a quarter of a billion pounds by the OFT, only for each case to collapse because there was no basis in fact, law or economics to support them? The net result is a huge bill for the taxpayer to pay the legal fees. Will my noble friend call for a review of the board’s oversight and the senior management’s lack of quality control over which cases to tackle? After all, there are 600 employees at the OFT costing us £60 million per annum, let alone compensation to the companies that have been improperly charged.

[Baroness Wilcox]

I obviously cannot anticipate the Government's announcement, but we aim to build on the best of the OFT and the best of the Competition Commission in the creation of a world-leading Competition and Markets Authority. The Government recognise that the system for the enforcement of the anti-trust prohibitions is not working as well as it should. Cases take too long and a strong challenge to decisions is often mounted on appeal. It is worth remembering that we have a reputation in the world as being one of the best places in which markets work. Markets work well here. They are open and fair. We have to make sure that we have timely and effective enforcement. That is what the consultation has been about.