The competition watchdog will be flooded by more than 50 new cases if Britain leaves the European Union without a deal, requiring up to a quarter of its staff to be reallocated, its head has warned MPs.
Lord Tyrie, chairman of the Competition and Markets Authority, said that the regulator was in “uncharted territory” as it prepares for a shift in its workload after Brexit.
At present the European Commission investigates the biggest mergers and competition cases, like the recent proposed merger between Sainsbury’s and Asda, that affect consumers across Europe but once Britain leaves the bloc the CMA will have to deal with any case that affects British citizens, even if the companies concerned are based outside the UK.
“The scale of the adjustment will be very large,” Lord Tyrie, 62, said. “If there isn’t a transition agreement in place, really quite robust measures will have to be taken at speed.”
Lord Tyrie has sought to strengthen the watchdog’s powers since he was appointed chairman in June last year. Last month he said that businesses were getting away with ripping off customers and called for far-reaching powers to protect the public.
Under his watch the regulator has asked the government to grant it the power to disqualify directors for serious breaches of consumer laws and the ability to overhaul company boards.
He has also overseen decisions to block the proposed £12 billion merger of J Sainsbury and Asda and to issue recommendations for reforming the audit market.
At the Commons business committee yesterday, Lord Tyrie said that a “handful” of big mergers and about 50 smaller cases would immediately fall under the remit of the watchdog in the event of a hard Brexit.
The regulator was allocated an additional £20 million in funding this year to cope with the expected increased caseload, but Lord Tyrie said that it was still “essential” for government to secure a co-operation agreement with the EU on the exchange of information. If a deal was not agreed the impact would be “possibly quite serious”.
Lord Tyrie also called for regulations to better protect “vulnerable” consumers who buy goods and services online. He said that the benefit of increasing competition in the digital space was too often not translating into better deals for customers and that a digital regulator was needed to police the sector.
