HM Treasury

Enterprise & productivity

Competition

Competition is an important driver of productivity performance. Vigorous competition strengthens incentives to innovate and ensures that resources are allocated to the most efficient firms. By encouraging firms to reduce prices and improve the quality and choice of goods and services, it is also the most effective way of ensuring that consumers receive a fair deal.

The Government is committed to strengthening the UK’s overall competition regime.  Productivity and Enterprise: A world class competition regime, published by the DTI in July 2001, set out a wide range of proposals to modernise and strengthen the UK’s competition regime. The Enterprise Act, which came into force in June 2003, implements the Government's reform programme.

In particular, the Government is taking action to promote competition in specific markets. Under the Enterprise Act, the Office for Fair Trading (OFT) has a remit to actively investigate markets that are not working well for customers. Examples of studies that the OFT has carried out to date include pharmacies, store cards, estate agents and extended warranties.

The Government is also committed to putting empowered consumers at the heart of an effective competition regime. The DTI is currently reviewing the UK consumer network and the Government is also in the process of rolling out Consumer Direct, a new consumer helpline to provide consumers with information on their rights and practical advice on resolving problems.

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