Press Notice No. 42 of Session 2005-06, dated 16 May 2006
FORTY-SECOND REPORT: ENFORCING COMPETITION IN MARKETS (HC 841)
Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today:
"Competition helps consumers get a good deal. The Office of Fair Trading, the main body for enforcing competition law and preventing anti-competitive behaviour, is at a critical point as it responds to being given increased powers and substantially greater resources. It produces good work and has a strong reputation. But it needs to rouse itself if it is to demonstrate that the extra resources are good value for money.
"Our recommendations to the OFT include its taking a more proactive approach to investigations, tackling its problem of high staff turnover, setting itself some realistic timetables for completing investigations and publishing information about its performance against timescales. And the OFT should carry out research into the wider economic benefits of its work.
"I want to see the OFT making rapid progress in acting on our recommendations in order to improve its effectiveness and prove its worth to the taxpayer."
Mr Leigh was speaking as the Committee published its 42nd Report of this Session.
One of the main ways the Government aims to increase the UK's productivity is through increasing competition. The Office of Fair Trading (OFT) is the UK's main competition enforcement body. Its annual budget, currently £56 million, has grown by over 70% since 2000 and its responsibilities for enforcing competition in the UK economy have also been extended.
The OFT is respected for the quality of its analysis and for the precedents it has set in the interpretation of competition law. It is the third highest rated competition authority in international surveys.
Despite its international reputation, however, there are some internal shortcomings with the OFT which are limiting its overall effectiveness. The OFT is not yet maximising the value for money it provides. It must select its investigations more carefully, make better use of its staff and reduce the time it takes to investigate. By doing so, it will secure greater benefits for consumers and the UK economy as a whole.
On the basis of the Comptroller and Auditor General's Report, the Committee took evidence from the OFT. The OFT is clearly in a state of flux, as it responds to its increased powers and resources. It has responded to the C&AG's Report by committing to reducing the average timescale for its investigations by 6 months. The Committee's recommendations will help the OFT to build on this and consolidate its position as one of the world's leading competition enforcement authorities.
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