The UK's Competition and Markets Authority has one job. It is to protect the consumer from potential monopoly abuse from big business by preventing the concentration of economic market power in the hands of a single or a few companies that can then impose prices free from the constraints of open market competition.
This regulator should, then, be a consumer champion.
It should stand up against monopoly power, which economic theory of just about every known type suggests to be harmful.
The Chair of this Authority does, then, have a big job to do if they do it well. It is their job to stand up against the abuse that big business is naturally inclined to favour as it increases their profits.
A report from the Guardian should be read in this context:
The chair of the competition watchdog has been forced to step down after an intervention by Labour ministers, as they try to send a pro-growth message to businesses gathered at the World Economic Forum meeting in Davos.
The business department confirmed that the Competition and Markets Authority chair, Marcus Bokkerink, was stepping down on Tuesday evening, just two years after being appointed. Most CMA chairs are expected to serve for up to five years.
The reasons given were simple. Marcus Bokkerink was, apparently, insufficiently pro-market to encourage growth in the UK. His place is being taken, at least temporarily, by former Amazon UK boss Doug Gurr, who has been told to "boost growth and support the economy”.
I have already noted Labour's desire to outdo Trump on green policy this morning. Now, it seems that they are trying to do the same on consumer protection issues, which they are, in effect, tearing up so that the UK consumer can be taken for a ride by monopolists without care for the consequences.
When we live in an economy where people are abused daily by big business, whether that be from the utility and water prices they have to pay, or in the dire choice of foods they are presented with to eat, or in the financial services rip-offs that happen all around us, or in excessive rent charges, the need for protection of the consumer has never been higher. But Labour has very clearly indicated on which side they are. They are on the side of the abuser. And in case anyone missed the point, they have appointed a person formerly at Amazon - the arch monopolist of online supply - to make the point.
Labour's open march to the further reaches of the right-wing of politics continues apace. We will pay a big price for this.
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I looked in vain for a mention of “growth” in Part 3 and Schedule 4 to the Enterprise and Regulatory Reform Act 2013, which created the CMA from the bones of the OFT and the Competition Commission.
https://www.legislation.gov.uk/ukpga/2013/24/contents
Nothing.
But s.25(3) says: “The CMA must seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers.”
Must.
So this overwhelming focus on GDP growth is simply government policy turned into official dogma.
And if the CMA bends the knee to that political dogma, it is ignoring the role mandated to it by statue.
I expect you could increase GDP (at least temporarily) by allowing the creating of businesses with a dominant market position who are in a position to exploit the consumer to charge higher prices. Economic rents. But is that the “growth” we really want or need, rather than effective competition leading to innovation leading to growth? It sounds like a cancer eating away at the body that created it.
Thanks
If bubonic plague wiped out half the London population, GDP would probably rise due to the cost of burials, mass rat extermination, fumigation and vaccinations.
(I’m not reccomending this to the Chancellor, she might decide to go for it).
They assumed that growth would come naturally with the change in government, as it has done in the past.
The growth didn’t happen and they’d staked everything on it. They don’t have a plan b so this is an act of desperation.
They’ve been smacked in the head by the reality that Friedman’s fantasy of a growing private sector funding public spending is just that – fantasy.
Smacked so hard they’re stumbling around without a clue what to do, apart from keep on doing the same thing and expecting a different result.
The inference is that business will only invest here if they are allowed to fleece us. Not good.
Why does business price gouge? Because they can! Since the days of Teddy Roosevelt over a century ago this has been well understood by those of all political hues and action taken to reduce monopolistic abuse. The fact that this is being watered down is a clear indication that the political system has been captured by corporate interests.
Agreed
Plus a bailout for the banks mis-selling car loans.
https://www.bbc.co.uk/news/articles/cre8qr91w75o
So this yet another game keeper turned poacher role.
All this because Labour refuses to use it’s sovereignty.
Weak.
Weak.
Weak.
The set of policies from (US and) UK are shocking. Starmer’s joined the spiral to the bottom, it seems.
It is interesting what regulators are being targeted in the UK. Is it Water? gas? Is it the dismal FCA?
What about bolstering anti-tax dodging – no, lets ignore those abuses!
I anticipate that the Online Safety Bill, or Ofcom’s ability to regulate it will be undermined after challenges by tech bros (quite soon).
Welcome to the UK …. A small region of the new wild west of chaos capitalism where the rich and the strong survive. Outlaws exploiting the masses are released. I guess the only purpose of the state will be to protect the wealthy from being taken by the poor underclass?
Ye-hah??? Good God!
And that pesky EU / Euro commission with its banning of mobile roaming charges, ramping up of consumer rights and fining companies billions of € under anti-trust legislation.
How very dare they get in the way of business!
Thank you, John.
This is what I hear in the City. There’s little appetite for a rapprochement with the EU when money can be made that way.
Colonel
What about the issue of the City’s access to the EU? We heard a lot about it during the debate. We were told they would lose out or have to relocate to an EU country like Ireland.
I don’t have experience of these circles.
I think it was very clear that the EU’s ” pas laissex-faire ” attitude towards big-business excess and promotion of consumer rights was a big reason for Brexit.
Plus the action taken on cutting-out tax-haven activities.
I doubt that
As you know I tend to challenge my former party members, councillors and my unpleasant MP on Labour’s trajectory. On DMs yesterday to local council chair and a councillor, who I was close to in the party, one replied “you and me both”, the other thought that the rump of new MPs were getting angry.
I knew you would feature this Richard – despite on @BBC this story being hidden away among ‘business’ news . But they do include the quote by the sacked chairman of the CMA –
‘ Mr Bokkerink warned against competition authorities becoming “vulnerable to short term expediency or vested interests”.
He said that his approach at the CMA was designed to promote growth through fair and effective competition by ensuring consumers and businesses had choice and “businesses large and small being free to compete, innovate and have a fair shot at succeeding based on merit…on a level playing field.”
In the Guardian ,the story is also buried way down without much comment on this complete reversal of the CMA role – to protect consumers.
This should be a big story – and says everything about this useless govt.
On the useful/useless R4 programme ‘ You and Yours’ – they plough through the endless tales of people being ripped off , and you might hear the occasional comment by an expert that consumer protection in the UK is very weak and way out of date. But of course – the BBC journalistic curiosity ends there – and they dont ask what can be done to reform the system.
How is it that Reeves and Starmer have an unerring instinct t for doing/saying exactly the opposite of whats needed? Whether its this ”please come and monopolise us’ – where no money is required-, or the airport runways, the CCS fantasy project, throwing good money after bad on nuclear power at Sizewell , or pie in the sky mini nuclear etc etc? Where is the dash for renewables that gets more urgent by the day?
Good questions. Labour has no answers.
I have to say my jaw hit the floor when I read about this one. I thought neoliberals were fixated on free market dogma and that monopolies must be prevented. I guess even they don’t believe in their own principles any more.
They never did. It was all sham.
Thomas Piketry makes this very clear in “Capital in 21st C” with data on Far East economies such as Japan & S Korea, whose motto could have been that of the boss of Sunshine Desserts “I didn’t get where I am today with free trade and open competition”. (Apologies to Reginald Perrin).
Labour (the core party bureacracy and the current leadership team) has been on this road for about almost a decade now. Yet anyone who pointed it out was labelled a Tory enabler.
Yet we now have a government well to the right of the one nation Tory party, well to the right of Johnson and giving us the budget of Jeremy Hunt.
A monopoly is a natural result of an unregulated market!
This is what we call regulatory capture and it’s blatant. But Marcus Bokkerink also came from the business side. Too many of these regulatory positions are filled by the revolving door from business and back again.
Thank you to Ian.
With regard to the loss of the single market access, the likes of UK Finance, my former employer, is no longer interested.
Most firms are international and have organised accordingly.
All that is left is for looting. It’s short-termist. There’s an air of resignation, too.
Much of the City sees the EU as a basket case.
Much of the EU does, I think, see the City as a basket case
Thank you. Richard.
I agree with you and think so, too.
I only work there. 🙂
I disagree with a stance that is gaining traction in the City. I caution that this is gaining traction amongst Britons and the odd Thatcherite migrant in the City.
The government listens to asset strippers, who have no stake in that fight.
Agreed
thank you, Colonel
Sounds like another own goal
[…] I noted its sacking of the chair of the Competition and Markets Authority that is tasked with protecting […]
I take a slightly different line. The open season for price gouging, or any monopolistic activity conjured by enterprise, fair or foul is actually the product of a single dawning realisation of both Labour and Conservative (and to be fair Reform has probably long guessed); the prospects for Britain, post-Brexit, post-Trump, post the rise of BRICS and a an exclusive choice between a wholly laissez-faire, or tariff-ridden global world (optically indistinguishable from a criminal enterprise of one kind or another): there is no future of prosperity available to Britain, and only hopeless desperation is left for policy makers. I find it no surprise we have ended here; except that it has taken so long.
Scotland doesn’t have as long as it thought it had, to go on dithering (as it has always preferred to do, through history).
https://www.theguardian.com/commentisfree/2025/jan/25/labours-decision-to-muzzle-regulators-in-the-name-of-growth-will-backfire-horribly
This article shifts me even further along the road towards the belief that Reeves is not just ignorant or incompetent, but that she is deliberately lying to us.
Reeves’ message: We must REDUCE regulation of monopolistic behaviour because CMA regulatory activity hinders growth.
Former CMA Chair Bokkerink (now forced out): Each time we acted, it stimulated (real) growth.
I try really hard to live an Amazon-free life, but I hadn’t realised the fine detail of quite how badly they treated their sellers, or the UK economy. Why would anyone want to buy through their platform?
Maybe Labour MPs can explain it to us.
Nick Shaxson has this right