Dr Clive Black

Non-protected government spending is set to be substantially cut as budgetary policy seeks balance, and difficult decisions will affect the welfare of many families. The Chancellor is expected to elucidate his plans for tax credits and benefits at his 8 July Budget.

Which brings us to the Competition & Markets Authority. The CMA needs to control the excesses of capitalism, catastrophically evident in the banking crisis. Equally, it needs to protect the economy where strategic economic policy is questioned, such as whether or not it is appropriate for foreign capital to control strategically important assets eg Cadbury.

Accordingly, it is with increasing dismay that we observe the workings of the CMA in the consumer arena. The collective malaise of Barr-Britvic, Dairy Crest-Müller, 99p-Poundland and the purchase of three Co-ops by Netto is frighteningly fantastic, terribly costly and to no discernible public good.

Yet one senses that if Mr Patel’s corner shop wanted to acquire Mr Arkwright’s we’d end up with an intention to investigate, a consultation and a phase one investigation based upon mindblowingly narrow criteria predicated on often groundless assertions. At the end of phase one this self-perpetuating bureaucracy would produce a report, defamatory to various parties, that recommended a phase two investigation where some proper process might ensue. In the meantime, companies trying to ‘get on’ through moderate acquisition activity face massive legal costs and management distraction; other companies with a vested interest in a potential merger make mischief; and disinterested organisations are almost subpoenaed to provide information at huge cost. Joseph Heller meets Armando Iannucci.

If the government wants access to low-hanging fruit in its cost-cutting programme, there could be nothing more juicy than the CMA. It needs some scrutiny, accountability and a return to a sense of responsibility. Those low-paid workers losing credits, local authorities bearing further cuts, further education colleges and other worthy causes facing challenges deserve better from public policymakers. It’s time the CMA faces the music.

Clive Black is head of research at Shore Capital Stockbrokers

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