OFT needs more bite, says Brown

Gordon Brown, the shadow chancellor, announced plans yesterday for a more aggressive body to ensure fair competition as he endorsed demands for extra powers by Sir Bryan Carsberg, outgoing director general of the Office of Fair Trading.

Speaking in London, Mr Brown backed Sir Bryan's campaign for a wholesale reform of British competition policy and said of his resignation from the OFT: "It is easy to see why he might be frustrated at the unwillingness of this Government to put competition and the interests of consumers first."

He called for a coherent pro-competition policy enforced by a strengthened OFT which would bring Britain into line with the best European practice.

In a recent interview in the Independent, Sir Bryan said Britain had "fallen behind" world development of competition policy, and he urged the creation of a single powerful competition body on European lines, to replace the Monopolies Commission, the OFT and the competition section of the DTI.

Sir Bryan expressed admiration for the more aggressive enforcement of competition policy on the Continent. He approved of European Union rules that impose fines of up to 10 per cent of worldwide turnover on companies engaged in restrictive practices.

Mr Brown said he wanted to "sharpen the teeth of the OFT" and introduce a "presumption against restrictive practice". He pointed to recent examples of the abuse of monopoly power in computer games, price-fixing in the cement and building industry and restrictive practices in City underwriting.

Mr Brown's speech went further than ever before to signal "New" Labour's embrace of market competition - one of the more significant themes in the new draft of Clause IV of the party's constitution. The new clause commits Labour to "the enterprise of the market and the rigour of competition".

Mr Brown said: "Intense and fair competition is essential if the economy is to work dynamically and in the public interest. Monopolies, cartels and price-rigging spell slow growth, less innovation, stunted competitiveness and higher prices."

These have been Conservative themes in the past, although Mr Brown is keen to undermine the Government's free-market credentials by pointing to the privatisation of natural "monopolies" such as gas, water and the electricity National Grid.

He tried in his speech to counter the image of Labour as intent on stifling firms with red tape. Britain's economic success "can only be guaranteed if greater competition and effective regulation are seen as complementary rather than contradictory. The answer to Britain's economic problems cannot be to pursue regulation at the expense of competition and dynamism, and New Labour rejects that course."

"New" Labour received an awkward setback on Thursday when Labour Euro- MPs voted in the European Parliament in favour of state bail-outs of national airlines.