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Penrose Review: UK Competition and Consumer Policy — [Clive Efford in the Chair]
08 March 2022
Lead MP
John Penrose
Weston-Super-Mare
Con
Responding Minister
Paul Scully
Tags
EconomyBusiness & Trade
Word Count: 14266
Other Contributors: 7
At a Glance
John Penrose raised concerns about penrose review: uk competition and consumer policy — [clive efford in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
The Minister is asked to provide a firm timeline for reviewing utilities regulators' statutory duties and to ensure that the Government's subsidy control system maintains transparency to prevent cronyism and wasteful spending. The lead MP also asks for progress on county competition courts, better regulation of businesses, and improvements in public procurement legislation.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The report 'Power To The People' recommends speeding up the Competition and Markets Authority (CMA) decision-making process, creating county competition courts for small local firms, updating local trading standards teams, improving public procurement processes, and reducing unnecessary regulatory burdens. However, there has been little progress on these recommendations, particularly in better regulation and economic regulators' statutory duties.
Andrew Selous
Con
South West Bedfordshire
Acknowledges the need to reform public procurement processes, highlighting the importance of ensuring that new legislation benefits smaller firms and improves value for money. He supports speeding up competition law decisions through county courts.
Caroline Lucas
Green
Brighton Pavilion
Asks the Minister to explain why the Government has not prioritised recommendations such as creating county competition courts and improving redress systems for small businesses. She raises concerns about the lack of progress on these issues.
Truro and Falmouth
Asked whether the principles of competition apply to local authorities that often employ one arm's length contractor for jobs such as road building and maintenance. Cherilyn Mackrory highlighted the importance of competition policy for small businesses in Cornwall, noting that three quarters of local companies employ fewer than five people. She stressed the need to address low productivity levels and high unemployment rates in the region, particularly in hospitality and retail sectors. Mackrory also discussed the potential economic benefits of processing lithium locally and called for reduced red tape in the fishing industry to prevent business closures. Additionally, she supported reforms to digital market regulations to promote competition and innovation.
Damian Collins
Con
Bromley and Chislehurst
Mr Collins highlighted the dominance of large digital companies in various sectors, citing Google's control over search and browsers, Facebook and Google's share of digital advertising, Apple's monopoly on iOS apps, and WhatsApp's market penetration. He pointed out that dominant players like these abuse their power by treating customers differently and controlling access to data and platforms, which stifles competition and innovation.
Patricia Gibson
SNP
North Ayrshire and Arran
Consumer confidence is essential for economic growth, but research by Which? found that one third of consumers experience problems with products or services annually. The Competition and Markets Authority needs more powers to protect consumer rights effectively. Patricia Gibson supports the Penrose review's proposal to give the CMA sharper teeth, including increased power to drive consumer rights and supply-side reforms.
Seema Malhotra
Lab Co-op
Feltham and Heston
Malhotra discussed the importance of ensuring effective competition policy, citing the Penrose report. She highlighted issues such as market concentration, tax avoidance, mergers that lead to unsustainable debt, and the need for a re-evaluation of the CMA's role. Malhotra also addressed concerns about digital markets and called for legislation to empower regulators like the CMA with more powers.
Yvonne Fovargue
Lab
Waveney
She calls for a new competition and consumer Bill due to the impact of the pandemic and cost of living crisis. Yvonne highlights the issue of fake online reviews, subscription traps, and drip pricing, urging for verified purchases and trust in businesses. She also discusses the need for mandatory dispute resolution schemes in key sectors, particularly concerning complex air travel refunds, and advocates for a single point of entry for all complaints through an accessible statutory ombudsman system.
Government Response
Paul Scully
Government Response
I congratulate my hon. Friend the Member for Weston-super-Mare on securing the debate and on his report, which has had a significant role in shaping the Government's thinking on reforming competition policy. The UK's competition regime is already well regarded internationally but needs to adapt to changes in digital markets. Mark-ups have increased by 7% from 2000 to 2018, while combined market shares of the largest firms also rose over this period. To address these issues, the Government proposed reforms such as strengthening CMA powers and proposing new ways for businesses and regulators to reach agreements on actions needed to resolve competition issues. We consulted on measures to tackle subscription traps and fake reviews. The Government do not think a one in, two out rule is consistent with delivering world-class regulation but will look at each case's merits. A well-functioning alternative dispute resolution system can make markets work more effectively, increasing consumer confidence in spending and generating higher trader compliance with the law. We sought views on proposals to enhance this role in resolving disputes. The Government also consulted on empowering the CMA to enforce consumer law directly without going through courts.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.