The government should launch sweeping reforms of competition laws to improve consumer confidence, lower costs for businesses and boost the UK economy after Brexit, according to a leading Tory MP.
John Penrose, a prominent backbench MP commissioned by the government last year to explore post-Brexit opportunities for UK competition policy, said ministers needed to launch a new parliamentary act to update Britain’s consumer institutions to reflect the rise of the digital economy.
Calling for the changes in a report published on Tuesday, he said the Competition and Markets Authority (CMA) regulator needed more power to be given tougher penalties to companies that do not cooperate fully in investigations. The watchdog should also work out a way that lets customers easily compare the “price” of free online services.
Many digital companies, such as Google and Facebook, do not charge customers for many of their services but instead gather customers’ data, used to give them insights that allow adverts to be targeted at consumers.
The “CMA must consider how to improve transparency of the price consumers are paying through their data for digital goods and services, so they can make informed choices about whether each one represents good value or not, and whether they wish to switch to others which might be better,” the report said.
The findings of the Penrose Review come as ministers attempt to stake a claim that leaving the EU will present businesses and consumers with new opportunities that will boost the economy and raise living standards.
The government has so far faced a chorus of complaints from business leaders over its handling of Brexit, amid a mountain of new paperwork for exporters and delays. While Boris Johnson has said these are “teething problems” that will fade, company bosses warn that additional costs of doing business after Brexit are an endemic feature of leaving the EU that will hold back Britain’s economy.
In the 69-page report prepared by Penrose, the Tory MP said “the opportunities for post-Brexit Britain to cut red tape costs ought to be immense”. As part of the review, he said ministers should reintroduce a “one in, one out” rule used by David Cameron’s coalition government that forced ministers to scrap an old regulation if they wanted to launch a new one.
He said the government had promised in 2018 to cut £9bn from the cost of doing business in Britain by reducing red tape, but removing the one-in-one-out “gateway condition” had led to costs rising by an extra £8bn instead. Red tape refers to rules governing business practices, which often include health and safety standards, consumer protections and measures to protect the environment.
Kwasi Kwarteng, the business secretary, said the government would consider the findings of the review. “The UK’s competition laws and institutions are highly regarded across the globe. However, as we build back better from the pandemic and start life as an independent trading nation, we have a golden opportunity to strengthen that reputation,” he said.