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Press releases 2002 -

Helping government to assess impact of proposed policies on competition

PN 08/02    13 February 2002 

The OFT and Cabinet Office have today jointly launched guidance to policy makers across Government on how to assess the impact that their proposed policies and legislation will have on competition in the market place.

Competition is crucial for strong and effective markets. It drives innovation and productivity, and helps consumers get a good deal. The importance of ensuring that Government policies and regulations do not distort or restrict competition was highlighted in the DTI White Paper, 'Opportunity for All in a World of Change,' published in February 2001.

Policy makers will be required to carry out a Competition Assessment as part of their Regulatory Impact Assessments (RIAs), which are already required, before policies are implemented. 'Guidelines to Competition Assessment: A Guide to Policy Makers Completing Regulatory Impact Assessment' sets out a two stage process for examining the competition implications of proposed policies:

  • A simple first stage filter identifies policies where there is a risk of a substantial detrimental effect on competition.
  • Where such a risk is detected a detailed assessment is required and the guidelines provide a reference manual to policy makers on how to do this.

Where policies have positive effects on competition, these will also be included in the RIA.

The Cabinet Office has published an annex to its guidance on RIAs for policy makers, 'Good Policy Making: A Guide to Regulatory Impact Assessment' briefly covering the Competition Assessment, and also a checklist for policy makers detailing the key elements to consider in the first stage.

The OFT has set up a helpline, which will provide support and expert advice to policy makers on competition issues. The OFT will assist policy makers with the detailed assessment of a proposed policy, particularly where the issues are complex.

The OFT and Cabinet Office have worked together to implement this policy, minimising additional bureaucracy and ensuring a consistent approach to competition issues across government. This initiative will help policy makers design better regulations, with lasting benefits for businesses, government and consumers.

The policy will come into effect 13th February and will become compulsory on 1st September 2002. This provides a six-month period for policy makers to adjust to the new scheme.

John Vickers, Director General of Fair Trading, said:
'The OFT is pleased to be helping government assess the implications that policies may have for competition. Government policy that takes proper account of competition issues helps markets work well for consumers.'

Lord Macdonald, Minister for the Cabinet Office, said:
'Including competition in Regulatory Impact Assessments will help policy makers develop better regulations. This will mean lower regulatory burdens for businesses, charities and the voluntary sector.'

NOTES

1. The Government invited the OFT to advise on the impact of regulation on competition in the DTI White paper 'Opportunity for All in a World of Change' published in February 2001 and available at http://www.dti.gov.uk/opportunityforall/pages/contents.html

2. 'Guidelines to Competition Assessment – A Guide to Policy Makers Completing Regulatory Impact Assessment' can be downloaded from the publications page

3. Details on RIAs and Cabinet Office guidance 'Good Policy Making – A Guide to Regulatory Impact Assessment' can be found on the RIU website at www.cabinet-office.gov.uk/regulation




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