Speech

David Currie speaks about the CMA as a UK-wide organisation

Speech by CMA Chairman David Currie at the CMA board reception in Scotland.

David Currie

Introduction

It is a pleasure to welcome you all here tonight. Scotland has a very special place in my heart. My father was born in Dunfermline in the twilight of the 19th century, and my 2 young grandchildren are growing up further north in Aberdeen, so I am a regular visitor. But in addition to the personal, Scotland is a key focus for the new Competition and Markets Authority (CMA). That is why the board is meeting here in Edinburgh tomorrow, and board members and other senior CMA colleagues are here tonight.

Also here are our Devolved Nations Team – Sheila Scobie, Simon Harris, Marian Cree and Hannah Frodsham. We considerably expanded this team as we moved to assume our powers at the beginning of April, reflecting our commitment to be a UK-wide organisation. Now in addition to our dedicated office here in Edinburgh we also have single person offices in Cardiff and Belfast. This enhanced capacity ensures that as an organisation we are able to gather insight and understanding of the particular circumstances of all the devolved nations and also promote and explain the work we do to stakeholders, partners and consumers across the UK.

To that end, this afternoon the board and I have met with a number of key players including John Swinney, the Minister for Finance, Employment and Sustainable Growth, Scottish Enterprise, Murdo Fraser, the convenor of the Parliament’s Economy, Energy and Enterprise Committee, Which?’s Scottish representative, Citizens Advice Scotland, Trading Standards Scotland, the Water Industry Commission, the Law Society of Scotland and the Scottish Competition Law Forum. We found this invaluable in becoming more aware of the Scottish context and improving our understanding of how our work is received here.

In the next few minutes I would like to take you through the CMA’s aims and mission, our ongoing work and our commitment to be a UK-wide organisation. Firstly though a few words on where we are at the moment.

Current situation

Since April, the CMA has been fully up and running. A huge amount of work went in to ensuring a successful transition from the Office of Fair Trading (OFT) and the Competition Commission (CC), and we are now committed to ensuring that the CMA is best-in-class, that the merger delivers real benefits to consumers and the economy, the ultimate test.

We have a very strong board and leadership team, working to deliver our agreed strategy and vision, and a talented staff with a great mix of skills and experience for our type of work. Following consultation, we have published guidance documents across the full range of our powers and responsibilities - no mean task, especially with all the pressures of transition. And we have delivered on our commitment that existing casework would not falter and would pass seamlessly to the CMA.

CMA’s aims and missions

The Enterprise and Regulatory Reform Act of 2013 gives us the primary duty to promote competition, both within and outside the United Kingdom, for the benefit of consumers. Given that, our chosen mission is to make markets work well, in the interests of consumers, businesses and the economy. Our overall ambition is consistently to be among the leading competition and consumer agencies in the world.

We will do that through delivering on five strategic goals:

  • First, effective enforcement – targeted and effective enforcement deters anti-competitive behaviour and builds a platform for greater compliance and understanding of the law.
  • Second, extending competition frontiers – examining and promoting the role of competition in new and rapidly changing markets.
  • Third, refocusing consumer protection – working closely with our consumer partners across the UK and with sector regulators.
  • Fourth, achieving professional excellence – ensuring every case, study and project is handled efficiently, transparently and fairly.
  • Fifth, developing integrated performance – working closely with business, consumer, regulatory, international and other organisations. I’m therefore pleased to see here tonight representatives from the Water Industry Commission for Scotland, Ofgem, Ofcom, Trading Standards Scotland and Citizens Advice Scotland.

We are also putting in place an ambitious and expanded approach to business compliance with competition and consumer law. We will be looking to tie up more closely our enforcement outcomes with our work on compliance by ensuring that when we complete cases from which lessons can be drawn we bring those lessons to the attention of the firms that need to see them. We are also committed to conducting a programme of UK-wide research to better understand business awareness and understanding of the law and will use the results to improve our strategies for compliance work going forward.

In our Annual Plan, we have set out our priorities and work programme for the first 12 months. The plan focuses on merger control, market studies and inquiries, and enforcement of competition and consumer law. We currently have a busy workload, inherited from the OFT and CC: nearly a dozen live competition enforcement and consumer cases, nearly 30 merger cases and 3 on-going Phase 2 market investigations.

Current work

That gives us a full agenda. Just last month we published:

  • a provisional decision regarding the market for payday lending in the UK where we found a lack of price competition, so that people may well be paying too much for their loans;
  • a provisional decision regarding remedies in the private motor insurance market; and
  • guidance for lettings professionals on how to comply with consumer protection law.

All of these projects have UK-wide impact and we have worked with organisations across the UK during these projects. For example in the payday lending investigation we received responses to our issues statement from the Law Society of Scotland and Citizens Advice Scotland along with a number of other organisations whose remit is UK-wide and payday lenders who again operate on a UK-wide basis.

We have launched work to look at the effects of over-indebtedness on consumers and are engaged with consumer bodies from across the UK on this. We are also taking the conclusion of the OFT’s work on SME banking into a wider assessment of competition in the retail banking sector which we will report on in the summer. Ofgem has concluded a consultation on its proposal that the CMA should conduct a full market investigation into the domestic energy market and we are expecting that decision shortly.

We have also inherited 2 Scottish-specific cases from the OFT and CC. We are consulting on stronger commitments to improve access to the road fuels market in the Western Isles. We believe these commitments will help rival fuel distributors to enter the market and to compete in the supply of road fuels to the Western Isles filling stations on a long-term basis. The CMA has also considered the recent merger between Breedon Aggregates and Aggregate Industries UK. We found that this acquisition would lead to a reduction of competition in 3 areas of north-east Scotland. To preserve competition and protect customer interests we are requiring Breedon Aggregates Ltd to sell an asphalt plant in Aberdeen and a ready-mixed concrete plant in Peterhead. Both of these products are vital for construction projects and road building, much of which is funded by the public purse.

Future work

Looking forward, as capacity becomes available we have rightly set ourselves some clear targets - launching at least 4 new Competition Act investigations, at least 4 new pieces of markets work, and 3 cases or projects that focus on widespread or endemic practices that negatively impact on consumer decision-making or choice.

We will build the right portfolio of cases, selecting the right cases to investigate and then delivering robust, well-reasoned and timely outcomes in those cases. Over time we need a portfolio of cases covering both large and small markets and businesses across the UK and involving infringements that are more established and those that are less familiar. The Devolved Nations Team is feeding into the CMA’s projects to ensure that our work covers sectors of most importance for the UK as a whole and each of the devolved nations.

CMA as a UK-wide organisation

Our team here in Scotland is focusing on helping the CMA to be more effective in reaching out and responding to the different economic and political dynamics here in Scotland. At the CMA board meeting tomorrow we will be considering how we can become more effective in this and how organisations in Scotland, Wales and Northern Ireland can be involved in decision-making and cases.

The CMA is also working with regulators and consumer bodies across the UK. Firstly, through the UK Competition Network which liaises with the Water Industry Commission for Scotland to learn from each other, as well as the Utility Regulator for Northern Ireland. And secondly, through the Consumer Protection Partnership, which includes Trading Standards Scotland and Citizens Advice Scotland, as well as Northern Ireland consumer and trading standards bodies.

Conclusion

I hope you take away from what I have said that we are keen to engage with and listen to consumer groups, businesses and their representatives in Scotland to help inform our work and processes. We want to hear from you if there are particular aspects of markets that raise concerns or that you think may be anti-competitive. Sheila Scobie and Hannah Frodsham are our key people here in Scotland and will be very happy to meet and listen.

Thank you once again for coming tonight and I look forward to discussing with you how the CMA can best ensure it represents Scottish interests.

Published 26 June 2014