CMA to “brainstorm” growth ideas with business groups as pressure mounts
The competition watchdog is set to be grilled by some of the UK’s biggest business bodies tomorrow as it looks to shore up confidence following the ousting of its chair by ministers last week.
The Competition and Markets Authority (CMA), which has faced anger from both the government and private sector over what has been seen as an overly interventionist approach to regulation, will look to win round executives at an inaugural ‘Growth and Investment Council’ tomorrow morning.
First announced in January, the summit will bring together business groups including UK Finance, the London Stock Exchange, the City UK and the British Venture Capital Association, allowing them to quiz CMA executives on their plans for the year.
However, the event falls just one week after chair Marcus Bokkerink was forced out of his post over a conflict in strategy with Rachel Reeves and Keir Starmer. He has been replaced on an interim basis by ex-Amazon executive, Doug Gurr.
Reeves sent letters to 17 regulators on Christmas eve demanding ideas to unlock growth but is said to have been unimpressed by the CMA’s proposals. Speaking publicly at Davos, she said that Bokkerink had left due to a “different approach” to the government.
An agenda for tomorrow’s summit, seen by City AM, includes a “brainstorm” with attendees and a presentation of the regulator’s plans for the year. Gurr will also offer introductory remarks and a closing summary, in his first public outing in the role.
“I hope it will act as real engagement with industry, allowing us to review issues the CMA is grappling with and give them a business perspective on their analysis,” Bob Wigley, chair of UK Finance, who is attending tomorrow’s summit, told City AM.
“We also need to ensure the CMA is focused on future competitive trends and technologies and the business arguments for facilitating innovation that ultimately benefits consumers and the UK economy.”
Wigley added that he was “impressed” the CMA had launched the new council.
Another person attending the meeting said they hope to see the CMA use the council to “showcase its commitment to the growth agenda and build on some of the recent public comments made by (chief executive) Sarah Cardell.”
The CMA has been under mounting pressure since November when Keir Starmer launched a public rebuke of its strategy in front of international investors. Speaking at the International Investment Summit, he said the body needed to “take[..] growth as seriously as this room does.”
The CMA said weeks later it would look to lean more heavily on so-called behavioural remedies when assessing major deals, meaning that firms may not need to sell off assets to get mergers over the line.
A person familiar with the private capital industry’s relationship with the CMA said the regulator had also been increasing its engagement with the sector in recent months.
Questions over its management have grown in recent days after it emerged the body had overshot its budget last year and begun a voluntary redundancy programme, which will look to cut its headcount by about 10 per cent.
Lawyers also questioned the watchdog’s approach to growth set out in response to the government’s request on the 24th. Jacqueline Vallat, a competition partner at law firm CMS, said the regulator’s proposals were largely a “repackaged” version of its existing plans and failed to include new “concrete proposals”.
The exit of Bokkerink showed a “clear intention to hold regulators’ feet to the fire on supporting growth”, Vallat said, adding that it was “a little unfair” given that ministers set the remit of regulators.
The CMA said earlier this month that the Growth and Investment Council will “have an important advisory role to provide ‘expert knowledge and stakeholder insights’ on opportunities for growth”. A consultation on its annual plans is set to close this week.
Gurr will appear at tomorrow’s session despite uncertainty over the permanent appointment to the role.
Under cabinet office rules, the business and trade select committee (BTC) will hold a pre-appointment hearing ahead of a permanent hire being made. While MPs will be given a chance to grill the nominee, they do not have power to veto an appointment.
The Department for Business and Trade (DBT) did not confirm whether Gurr would be put forward for this role, and pointed City AM to their previous statement: “In the coming weeks, the DBT will set out the process for recruiting a new permanent chairman of the CMA.”
The CMA declined to comment.