Major steps towards creating the UK’s new strengthened and streamlined competition regime have been announced.
Major steps towards creating the UK’s new strengthened and streamlined competition regime have been announced by the Business Secretary Vince Cable.
New measures include the appointment of a high calibre team of Non-Executive Directors (NEDs) to the Competition and Markets Authority (CMA) Board and a consultation on the CMA strategic priorities.
The new authority will be the UK’s single leading body responsible for promoting competition for the benefit of consumers across the economy. It will provide essential services to business and consumers, operating with flexibility and with a more streamlined approach to decision making. Bringing together the Competition Commission (CC) and key consumer functions from the Office of Fair Trading, the CMA will be a powerful advocate of competition both in the UK and globally.
In advance of the launch of the CMA in shadow form this October the government is publishing:
- a consultation on the draft steer for the CMA which outlines the long-term goals of the government in relation to competition and growth
- the identity of the high calibre team of Non-Executive Directors who are being appointed to the CMA Board
- BIS’s consultation on government proposals for the initial CMA powers and strategic priorities setting out how it will carry out its functions to deliver a more robust competition regime
The details released follow the Chancellor’s announcement in the Spending Review last month that the budget of the new Competition and Markets Authority will be increased by £16 million in 2015 to 2016.
There will also be a parallel consultation by the CMA Transition Team on the first set of draft guidance on how the new organisation will operate. This will cover the CMA’s approach to reviewing mergers, including its extended power to impose interim measures, to analysing markets, to imposing financial penalties where firms fail to comply with investigatory requirements, to recovering its costs in telecoms appeals, and transparency in the ways it does its work.
Business Secretary Vince Cable said:
An effective competition regime is essential for a strong economy and to protect consumers. The UK regime is already world-class, and is underpinned by robust enforcement of the law but there is still scope for improvement.
The appointment of a high-calibre Board for the CMA with knowledge of competition law, business and economic expertise, and a wealth of international experience as well as £16 million in extra funding, is a significant milestone.
Lord Currie, Chair Designate of the CMA, said:
Today’s announcement is a huge step towards creating the Competition and Markets Authority. The team of Non-Executive Directors who are being appointed to the Board bring with them experience and expertise that will be invaluable as we create a new reformed, streamlined regime. I very much look forward to working with them in setting up this world-class competition authority.
Alex Chisholm, Chief Executive Designate of the CMA, said:
The consultation announced today on the first set of draft guidance documents is a landmark in our journey towards the CMA. Guided by expert advice from the Office of Fair Trading and Competition Commission, together with BIS and concurrent regulators, these documents set out how David Currie and I intend the CMA to carry out its work.
The Non-Executive Directors being appointed to the soon to be created Competition and Markets Authority include Annetje Ottow, William (Bill) Kovacic, Philip Lowe, Carolyn Fairbairn and Alan Giles, and the two Panel member NEDs are Roger Witcomb and Jill May. Roger Witcomb has also been appointed as Chairman of the CMA Panel.
Notes to editors:
1.The Competition and Markets Authority (CMA) will be legally established on 1 October 2013 and become fully functional operational on 1 April 2014. The Enterprise and Regulatory Reform Act which creates the CMA received Royal Assent on 25 April 2013. The new unified Authority will bring together the Competition Commission (CC) with the competition and certain consumer functions of the OFT and will be responsible for advocating competition both at home and abroad. The CMA will bring about significant benefits to business and consumers, including greater coherence, flexibility, speed and transparency in the operation of the competition regime.
2.The government recognises and values the close relationship between competition problems and consumer activities. The CMA will therefore have the OFT and CC’s full competition toolkit and consumer protection enforcement powers. It will have the power to tackle practices and market conditions that make it difficult for consumers to exercise choice in an otherwise competitive market.
The Steer and secondary legislation
3.The consultation exercise forms part of a complex transition programme and therefore BIS will consult on the Steer and secondary legislation over the summer. The document published today forms the first tranche of the BIS consultation and invites views on the Steer, the final version of which will be published alongside the creation of the CMA on 1 October 2013, and four key statutory instruments.
4.The BIS Strategic Steer and SIs released today can be found at: www.gov.uk/government/consultations/competition-regime-cma-priorities-and-draft-secondary-legislation.
5.The deadline for submitting responses in relation to the BIS consultation is Friday 6 September 2013. Anyone who wishes to comment can email email@example.com or write to:
Xinru Li, Department for Business, Innovation and Skills, 3rd Floor, Orchard 2, 1 Victoria Street, London, SW1H 0ET.
6.The CMA Transition Team will also consult on draft CMA guidance in two tranches (in parallel with the BIS consultation) to give all stakeholders a reasonable time to comment in view of the extensive nature of the guidance. Consultation on the second and final tranche will start in September 2013.
7.The preparation of the draft guidance has been a collaboration between the OFT, the CC and BIS, working on behalf of the future CMA. The guidance consultation details high-level proposals on transitional arrangements for those cases ongoing at 1 April 2014.
8.The first set of draft guidance documents, together with information on how to submit responses can be found at: https://www.gov.uk/government/consultations/competition-and-markets-authority-guidance-part-1.
9.The CMA Board will comprise: * Lord (David) Currie, CMA Chairman * Alex Chisholm, CMA Chief Executive * five non-Executive Directors - Annetje Ottow, William (Bill) Kovacic, Philip Lowe, Carolyn Fairbairn and Alan Giles * the two Panel member NEDs Roger Witcomb and Jill May * three Executive Directors to be appointed
10.All the NEDs will be required to commit an average of 30 days per annum to the role, for a yearly remuneration of £27,000.
11.The remuneration for the CMA Panel Chairman is £131,500 FTE per annum for a time commitment of 4.3 days a week, starting on 1 April 2014.
12.The end dates of the appointments for the five NED positions will be staggered from between two and five years, with the possibility of reappointment. They will commence their appointments on 1 October 2013. The Panel NEDs will be appointed for an initial period of two years from 1 October 2013.
13.The appointments were made on merit in accordance with the requirements set down in the Commissioner for Public Appointments Code of Practice. Political affiliation plays no part in the selection process, however, in accordance with the original Nolan recommendations, there is a requirement for appointees’ political activity (if any declared) to be made public. None of the appointees have declared any political activity in the UK.
14.The following appointees currently hold additional ministerial public appointments: * Roger Witcomb Chairman of the Competition Commission receives a remuneration of £138,535 per annum * Alan Giles lead NED on the Board of the Office of Fair Trading (OFT) receives an annual remuneration of £23,745 * Jill May Competition Commission Panel member receives a remuneration of £350 per diem when working on a case
Biographies of Non-Executive Directors:
Annetje Ottow is a Professor of Public Economic Law at the Europa Institute of Utrecht University. She is Head of the ACM Academy, Netherlands (Authority for Consumers and Markets). Annetje was Vice President and Non-Executive Board member of OPTA, the Dutch Independent Post and Telecommunications Authority. In 2009, Annetje was appointed as a non-governmental adviser to the International Competition Network (ICN). She was visiting professor at the Florence School of Regulation of the European University Institute of Florence (2011) and at the Competition Law Center of the George Washington University, USA (2012). Before entering the public service and academia, she was a lawyer in private practice for 16 years, active in the areas of competition and regulation.
William (Bill) Kovacic is the Global Competition Professor of Law and Policy at the George Washington University Law School and Director of the school’s Competition Law Center. He is co-editor of the Journal of Antitrust Enforcement, published by Oxford University Press. Bill was Chair of the US Federal Trade Commission (FTC) and Vice Chair for Outreach of the International Competition Network. Before he became an FTC Commissioner, he was the agency’s General Counsel. Bill first worked for the FTC in 1979, initially in the Bureau of Competition’s Planning Office and later as an Attorney Adviser to Commissioner George Douglas. Since 1992, Bill has served as an adviser on antitrust and consumer protection issues to various governments around the world.
Philip Lowe is currently Director General for Energy at the European Commission where he has spent the majority of his career, including as Director General for Competition from 2002 to 2010. Before that Philip held a range of senior posts as Chef de Cabinet and Director in the fields of regional development, agriculture, merger control, transport and administration and was Director General for Development between 1997 and 2000. Prior to joining the Commission, Philip worked in manufacturing industry, with experience in production planning, financial analysis and corporate restructuring. Philip is Chair of the Florence Competition Workshop.
Carolyn Fairbairn is a Non-Executive Director for Lloyds Banking Group and Vitec Group, plus Trustee for Marie Curie Cancer Care. She was appointed as a NED of the UK Statistics Authority earlier this year. Carolyn was a NED on the Board of the Financial Services Authority. Carolyn’s senior executive experience includes Strategic Director at the BBC and then ITV, plus Partner at McKinsey and Company. Before joining the BBC, Carolyn was a special adviser in the Prime Minister’s Policy Unit at Number 10 Downing Street.
Alan Giles is the lead Non-Executive Director for the Office of Fair Trading and is a member of the Audit and Remuneration Committees. He has many years of experience in the retail sector and in the boardroom (executive and non-executive). He is currently a Non-Executive Director of Rentokil Initial plc, and retires later this month as Chairman of Fat Face Group. He was formerly Chief Executive Officer HMV Group plc, Managing Director of Waterstones Booksellers Ltd and Executive Director WH Smith Group plc. Alan lectures on retailing at Saïd Business School, and on corporate governance for NHS Foundation Trusts at Cass Business School.
Roger Witcomb is Chairman of the Competition Commission, appointed in May 2011, having been a CC Panel member since 2009. Roger is a trustee of the microfinance charity Opportunity International. He has held a number of NED positions including on the Boards of Anglian Water, and Infraco (a developer of infrastructure projects in developing countries). Roger was Finance Director of National Power, having previously worked for BP and Cambridge University where he taught economics.
Jill May is a Reporting Panel member at the Competition Commission, appointed in 2013. She has worked as an investment banker for UBS and for S.G.Warburg & Co Ltd and is an experienced mergers and acquisitions professional. At UBS she was Chairman of the UBS women’s network, All Bar None UK and was responsible for driving a number of diversity initiatives. She was also Trustee of the UBS Pension Fund. Jill currently holds the following positions: Member of Council, Durham University; Member of Council, The National Trust; Chairman Cancer Research UK St Paul’s Carol Concert and Non-Executive Director, Langham Industries.
15.The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’, published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.