With Tuesday's publication of the DTI's Enterprise Bill, the minister for competition, consumers and markets, Melanie Johnson, writes for ePolitix.com.

Our goal is to make the UK the best place in the world to do business. The Enterprise Bill is a major step towards achieving this. It will put in place a modern framework of pro-enterprise measures to drive up productivity in the UK benefiting business and consumers.

The 1998 Competition Act laid the foundations of a modern competition regime. Now more needs to be done - mergers and monopoly provisions were not reformed by that Act and are hopelessly outdated.

Monopolistic behaviour costs the UK from 0.5 - 1 per cent of GDP (around £4.5 billion - £9 billion per annum)[1]. By ensuring regulation promotes strong competition in the UK, we will improve productivity and living standards and make the UK more competitive internationally.

According to the British Chambers of Commerce, 'Fair competition is an essential ingredient of a healthy and productive economy and we should not settle for second best.'

The new merger regime and arrangements for market-wide investigations will be more transparent, predictable and efficient. Competition authorities will be able to make decisions without reference to Ministers, giving business more certainty.

The Competition Commission and the OFT will be more open and accountable. They will publish guidance on the operation of mergers and markets regimes and reasons for their decisions in individual cases. The OFT will have a set timetable to respond to "super- complaints" about markets from designated consumer bodies. The Competition Commission will also publish provisional conclusions part way through their enquiries to allow for more discussion of possible solutions to competition problems.

Hard core cartels - such as price-fixing and market sharing - push up prices and protect the inefficient. Those operating cartels are guilty of theft and should face serious penalties. The threat of imprisonment of up to five years should deter individuals from operating cartels and the Competition Act already imposes civil penalties on firms who engage in anti-competitive activity. The strength of this measure should be in its preventative effects and I hope that the impact on behaviour will be significant.

OFT estimate [2] consumer detriment - losses from defective goods, inadequate redress or poor information - at £8.3 billion a year. The consumer protection measures in the Bill will help address this.

The Enterprise Bill will enable enforcement authorities to take speedy action against traders who cheat consumers. This will also ensure that honest traders do not face unfair competition from rogues.

For good entrepreneurs to flourish, we need modern corporate and personal insolvency regimes. The corporate insolvency law reform will restrict the use of Administrative Receivership, which tends to serve one creditor above all others, and ft the balance in favour of administration. This takes account of the interests of all creditors - secured and unsecured. We will also streamline the administrative procedure, making it quicker, fairer and easier to use.

A modernised, better targeted bankruptcy regime will encourage business start-ups and give a fresh start for bankrupts who are not reckless, irresponsible or dishonest. Those who have failed through no fault of their own will be discharged from their debts and released from restrictions after a maximum of 12 months.

But those bankrupts who abuse their creditors and the public will be subject to a new Bankruptcy Restrictions Order, from between two and fifteen years.

We will abolish the Crown's right to recover unpaid taxes before other creditors - helping unsecured creditors, including small businesses. We will improve the investment return on insolvent estates also benefiting creditors. These measures will free up to £110 million a year for creditors.

The Enterprise Bill will improve our competition, consumer protection and insolvency regulations to support productivity and efficiency. The reforms will be good for consumers, good for business and good for prosperity.

Footnotes

[1] "The social costs of monopoly power", K Cowling and D Mueller, Economic Journal 1978, pp 727 -748.

[2] "Consumer Detriment", OFT report February 2000.