Government drive on competition

The new team at the DTI are preparing to take on the cartels

Consumers are set to benefit from a radical shake-up of the UK's competition rules for commerce and industry which will lead to a crackdown on price-fixing.

The government looks set to reveal a series of tough new laws to ensure a better deal for consumers in the Queen's Speech.

Patricia Hewitt: media matters in mind

It will introduce tough measures to rein in directors of companies who operate price-fixing cartels, including the possibility of criminal sentences.

The measures are likely to be spelled out in a new competition and enterprise bill which will be published on Wednesday, when the government reveals details of its legislative programme.

The bill will also contain measures to encourage more people to start their own businesses, including an easing of the bankruptcy laws.

And the government plans to take the politics out of merger decisions, abolishing the current system in which the trade secretary has the final say on company take-overs.

"The British economy will do best when enterprise is seen to be open to all," the Chancellor, Gordon Brown said on Monday.

The media and communications industry will also face a new system of regulation under a Communications Bill which will set up a single regulator.

Promotion of enterprise

Promotion of enterprise will form the cornerstone of Labour's economic policy in its second term, following the concentration on economic stability and job creation during its first four years.

The second term will be about promoting a truly entrepreneurial culture in Britain

Treasury spokesman

A new unit will be set up in the Office of Fair Trading (OFT) to seek out anti-competitive practices.

The OFT had previously been limited to investigating complaints of unfair practices.

The Competition Commission will be given the task of conducting in-depth investigations of mergers and monopolies, taking decisions out of the hands of politicians who might otherwise be hampered by political sensitivities.

And the government will also consult on tougher penalties for company bosses found guilty of price-fixing and involvement in cartels, and could follow the United States in imposing jail sentences and heavy fines for breaches of competition law.

However, the main employers federation, the CBI, has expressed its scepticism about criminal penalties for price-fixing.

"UK firms would have the disadvantage of competing in a market where Britain would be the only large EU country with such draconian legislation," the CBI director-general Digby Jones said.

Communications bill

The new trade secretary Patricia Hewitt will be facing a busy legislative session.

As well as the competition bill, the DTI will also have a key role in a new communications bill, which will create one regulator for both telecommunications and the media, and loosen cross-media ownership rules - possibly to the benefit of Rupert Murdoch, whose newspapers backed Tony Blair in the recent election.

Mr Murdoch recently visited Downing Street, and the decision on whether to allow newspaper owners to also own terrestrial television stations is one which is likely to be taken at the highest level.

The main commercial network ITV is also waiting to see whether the bill will clear the way for further consolidation in the sector - including a possible take-over of ITN by its main owners Granada and Carlton.

The DTI will also have to steer family-friendly legislation through Parliament, increasing paid maternity leave to six months and consulting on proposals to give parents of young children the right to return to work part-time.

But the government is understood to have shelved, at least for the time being, plans to relax licensing laws, which would enrage brewers and leisure firms.