New UK premier eyes action on antitrust laws, foreign takeovers
11th July 2016. By Lewis Crofts
Energy companies and banks could face tougher regulation in the UK, after Theresa May said national competition law might need changes.
May, the country’s prime minister-in-waiting, also said that a “proper industrial strategy” should enable the government to protect certain industries from foreign takeovers.
This morning, May started her campaign to succeed Conservative Prime Minister David Cameron, who has decided to step down in the wake of the June referendum vote.
After May gave her speech this morning, her rival for the post, Andrea Leadsom, dropped out of the race to succeed Cameron, clearing the way for May to take over. This is now expected to happen on Wednesday afternoon.
In her speech, she proposed a vision for corporate behavior and regulation.
“I also want us to be prepared to use — and reform — competition law so that markets work better for people,” she said.
“If there is evidence that the big utility firms and the retail banks are abusing their roles in highly consolidated markets, we shouldn’t just complain about it, we shouldn’t say it’s too difficult, we should do something about it.”
The UK’s antitrust watchdog, the Competition and Markets Authority, has been reviewing the competitive conditions in retail banking and energy prices.
But the agency has attracted criticism for imposing insufficient remedies on the companies and failing to bring them to heel.
May stressed that it wasn’t “anti-business to suggest that big business needs to change.”
“Under my leadership, the Conservative Party will resolutely remain the party of enterprise and we will help British businesses to stay competitive and create more well-paid jobs,” she said.
May also mentioned a unsuccessful plan by US drugmaker Pfizer to take over London-based rival AstraZeneca.
The transaction was the subject of criticism at the time, partly because of Pfizer’s alleged tax incentive for going through with the transaction and partly because of the loss of a strategic research industry in Britain.
“It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry, and AstraZeneca is one of the jewels in its crown,” she said.
“Yet two years ago the government almost allowed AstraZeneca to be sold to Pfizer, the US company with a track record of asset stripping and whose self-confessed attraction to the deal was to avoid tax.”
“A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain.”