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Commissioned by the Chancellor and the Business Secretary, the report looks at the state of competition in the UK economy. It is intended to provide a baseline for future analysis and monitoring, by the Competition and Markets Authority (CMA) and others; to inform the work of the CMA; and to contribute to wider public debate on these important issues.
To produce today’s report, the CMA considered the economy as a whole as well as individual sectors, using quantitative and qualitative indicators of how markets are functioning. It analysed key metrics of competition, including entry and exit rates, profitability and market concentration, as well as considering the experiences of consumers.
Although much of the study uses comprehensive analysis covering the last 20 years, with the most recent data from 2018, the CMA has also started assessing early metrics of how the coronavirus (COVID-19) has affected competition.
Key findings include:
Taken together, the indicators examined suggest that competition across the economy as a whole may have declined over the last 20 years.
Concentration rose as a result of the 2008 recession and, though it has decreased slightly since 2010, it remains 3 percentage points higher today than in 1998.
Among the biggest companies in the economy, profits and mark-ups appear to be rising. The biggest firms saw mark-ups increase by 9% over the last 20 years.
Consumer surveys suggest that the UK has a relatively high incidence of consumer problems compared to EU member states and poor complaint handling. In 2018, around 1 in 3 UK customers experienced a consumer problem across all markets, the highest in the EU (where the average is 22%). Evidence also shows that transport, telecommunications/mobile/internet, utilities and property services perform relatively poorly when it comes to satisfaction and trust.
The UK scores relatively well in these surveys on consumer switching in some service markets, although switching is not as common among low income and financially insecure consumers.
In addition, and in order to consider the early effects of the coronavirus pandemic, the CMA placed questions in 2 ongoing Office for National Statistics surveys and considered “business demographic” data: the number of businesses created and closed.
Although it is still early to draw any definitive conclusions about the impact of the pandemic on competition, initial data shows:
Since the start of the pandemic, around 40% of consumers report shopping around less than usual, particularly among older groups (55+) and those with an illness or condition that limits their ability to perform day-to-day activities. The main reason given for shopping round less is feeling safer buying in one place, which could suggest this drop is temporary.
The accommodation and food services, as well as the arts, entertainment and recreation sectors are more likely to report that the number of competitors in their areas had decreased.
Most businesses did not report experiencing any challenge in selling goods and services online during the pandemic.
40% of companies have postponed or reduced plans to expand and the new businesses created up to Q3 2020 appear to be smaller in size than in previous years.
Construction, accommodation and food; and arts, entertainment and recreation saw the biggest drops in the number of businesses being created. There are no clear regional differences in business creation, although London is the only area to record positive business growth in both Q1and Q2 2020 .
There has so far been no spike in business closures, although the overall business population shrank in Q2 2020 for the first time since Q2 2017.
Mike Walker, Chief Economic Adviser at the CMA, said:
Understanding what is really happening to competition across the UK economy is more important than ever as we start to analyse the impact of a devastating global pandemic.
Our findings suggest a need for vigilance – by the CMA and by government – to ensure competition is not weakened because of the effects of coronavirus.
We will be presenting our findings to government and we hope that they will add to public debate around the UK’s economy and markets, as well as providing a baseline for future analysis.
Throughout this work, the CMA has drawn on the considerable internal knowledge amassed during its day-to-day work of enforcing consumer and competition law, assessing mergers and examining markets. It has also sought the assistance of outside experts and other parts of government; and has set out where it thinks further work is needed.
For more information, and to read the report, visit the State of UK Competition report page.
The British High Commission in Cyprus continues its insightful webinar series with an interview with Amanda Pinot QC, who shares her views on the effects COVID-19 has had on the world. The webinar reveals how elements of the UK adapted to the pandemic and how a #DynamicUK continues to innovate to face challenges.
Pinto, who is chairing the Bar Council for 2020 was interviewed by acclaimed lawyer Christophoros Christophi, about the challenges that the legal sector faces, from a legal practitioner’s point of view.
Pinto’s webinar covers two highly insightful and important topics. The first topic analyzes technology, legal technology, the impact of COVID-19 in the legal profession and where the balance lies in justice for the future.
Pinto speaks about the impact of COVID-19, on the ways in which courts and tribunals practice justice and how technology has better enabled access to justice.
When we talk about technology and court or justice and ways of working, particularly post COVID-19, I think that the overriding principle that we must have at the forefront of our minds, is access to justice- in conducting the business of courts and tribunals, from the starting proceedings to obtaining and enforcing judgements. Because if people cannot access the structures that will enable them to exercise their rights and they don’t have access to justice, their rights are underused and maybe even worthless. We have seen that technology and remote access to courts and tribunals is a way of limiting the ways that COVID-19 has been a barrier to access to justice.
In the second part, she focuses on women at the Bar, and highlights the importance of their presence in justice and how to ensure that women do have a chance to reach to the top of their profession.
As the fourth female president of the Bar Council, Pinto explains the various efforts that the Council is undertaking to ensure the representation of women at the top of the profession.
If we don’t keep and nurture the women all the way through their careers to the point where they can become QC’s but also where they become potential judges of the future, then the judiciary will not change; and at the moment there is very poor representation of women in the judiciary.
Pinto has chaired the International Committee from 2014 to 2018 and was called to the Bar in 1983. She specialises in business wrongdoing, international fraud, corporate crime, bribery and money laundering. Moreover, she is a Trustee of the Slynn Foundation, working to improve justice systems and the rule of law globally. Her practice led her to become the Champion of the First 100 Years project, celebrating women being admitted to the legal profession.
Discover more and understand how technology can enable better access to justice, by watching the entire webinar below.
This is the second of six webinars with highly innovative British professionals from various industries to discuss, inform and share their knowledge and expertise on how the current pandemic has affected their fields. Check out our social media channels for more upcoming discussions and if you’ve missed our previous webinar you can find out more about it in the following link:
Director-General, ladies and gentlemen,
Firstly, congratulations Mr Chairman on your election. Many thanks to you, Director-General Arias, and the OPCW Technical Secretariat, for your herculean efforts to support the convening of the Conference amidst the Covid-19 pandemic. Like you, I look forward to a time when more of us can gather in person.
2020 has been a challenging year on many fronts. I want to pay particular tribute to the OPCW Technical Secretariat staff who have adapted to deliver more capacity-building programmes on-line; sought to maintain a programme of industry inspections; and addressed the use of chemical weapons.
The international community’s revulsion at the use of chemical weapons remains undimmed. Great strides have been taken towards eliminating these abhorrent weapons, and the Chemical Weapons Convention is rightly heralded as a global success. But it is not a success that we can take for granted.
In recent years, we have seen chemical weapons used in Syria, Iraq, Malaysia, the UK, and now Russia. This poses a clear threat to the security of us all. It must be addressed.
The UK welcomed the publication of the first report from the Investigation and Identification team in April, a very robust document, and its clear findings. In July, the Executive Council set out very clear steps for Syria to take to come into compliance with the Convention. Regrettably, the Syrian regime’s response was to ignore the Executive Council and to continue a campaign vilifying the OPCW Technical Secretariat.
As recommended by the Council the issue will now be taken up at the Conference. The United Kingdom is co-sponsoring the draft decision condemning the Syrian regime’s use of chemical weapons and suspending certain rights and privileges, until they come into compliance with the Convention.
We cannot stand by in the face of incontrovertible evidence that chemical weapons have been used and that a State Party is flouting its obligations under the Convention. The decision proposes an approach which adheres closely to the provisions of the Convention, and we urge all States Parties to support it.
Mr Chair,
The UK was appalled to learn of a second confirmed use of a Novichok nerve agent to attack the Russian opposition figure, Alexey Navalny, in August. It is less than three years since my own country experienced the deadly consequences of the use of Novichok as a chemical weapon. We wish Mr Navalny well for a swift recovery.
Let us be clear, any poisoning with a nerve agent constitutes a use of a chemical weapon under the terms of the Chemical Weapons Convention. The Technical Secretariat has shared with States Parties the findings of independent sample analysis, confirming German, Swedish and French laboratory analysis. The evidence is undeniable.
The UK considers that there is no plausible explanation for Mr Navalny’s poisoning other than Russian involvement and responsibility for this appalling attack. We call on the Russian Federation to fully declare its Novichok programme to the OPCW.
Russia must fully explain to the Conference how a chemical weapon of a type developed by the Soviet Union came to be used against a Russian opposition politician on Russian territory. Those responsible must be held to account.
Mr Chair,
The OPCW must have the resources needed to fulfil its mandate. The United Kingdom will be supporting the Director-General’s proposed programme and budget for 2021, as recommended by the Executive Council. It is proportionate and reasonable whilst maintaining assessed contributions at their previous level. The budget will enable all capacity building programmes to be sustained and support the organisation’s resilience amidst the challenges posed by Covid-19. We encourage all states to join consensus on adopting the budget proposals.
Mr Chair,
The United Kingdom was pleased to be able to provide an additional £1.9 million in voluntary contributions in 2020. This funding will help support the establishment of the new OPCW Chemistry and Technology Centre; build laboratory capacity in Africa and Latin America; build capacity in Africa to respond to the use of chemical weapons; as well as enhancing the OPCW’s cyber security and addressing Syria’s chemical weapons programme.
Mr Chair,
Recent events have highlighted the imperative of States Parties continuing to come together to reject all use of chemical weapons. We need to remember why we are all here. Upholding the Convention and supporting the work of the Technical Secretariat is central to safeguarding our collective security. It is as important now as it was when we first came together to implement the Convention and establish the Technical Secretariat.
Verifying the destruction of all declared stockpiles is now close to completion. The big challenge ahead is to address the undeclared chemical weapons programmes, the covert caches of lethal substances: only then will we fully realise the object and purpose of the Convention and consign these appalling weapons to the history books.
Thank you, Mr Chair.
To help us improve GOV.UK, we’d like to know more about your visit today. We’ll send you a link to a feedback form. It will take only 2 minutes to fill in. Don’t worry we won’t send you spam or share your email address with anyone.