It is not surprising, what with the draconian powers of the Office of Fair Trading and the possibility of future appeals, that few bosses are prepared to put their heads above the parapet and comment on the spate of fines imposed upon our industry
However, surely it is time that we fought back and exposed the Office of Fair Trading for the unfair, misinformed organisation that it is?
I am sure few took note of the legislation that set up the OFT but the manner in which it now works has all the hallmarks of a totalitarian state. Once the OFT takes on a case, the greatest sinners then squeal in an effort to be seen to be co-operating and in the hope of a fine reduction. In so doing they then throw as much muck around the system as they can, including the implication of their competitors. Not all of what they say will be true and much of their evidence will be hearsay. There is no fairness, as there would be if such cases were dealt with through the courts.
I am not defending the bid-rigging cases but we all know that cover pricing in one form or another has gone on in virtually every business in the land. The OFT found that in 188 out of 199 of cases in this investigation, in spite of alleged cover pricing, there was still genuine competition on the tenders. We also have to remember that these tenders were not for private individuals with little knowledge of construction but for public bodies which had set budgets and which would be scrutinising the tenders with an army of quantity surveyors and financial experts. They did not have to accept any of the tenders if they were not in line with their expectations.
In addition, the OFT’s Prioritisation Principles document says “we therefore focus our efforts and resources on deterring and influencing behaviour that poses the greatest threat to consumer welfare, and intervene in order to protect consumer welfare and, in the process, drive higher productivity growth. We also recognise the need to avoid imposing unnecessary burdens on business”. The OFT has therefore gone against its own principles for, instead of issuing warnings, so deterring and influencing future tenders, it has gone immediately through an enforcement action and imposed a fine on the industry that, in the present economic climate, can only be interpreted as an unnecessary burden.
John Medlock, managing director, Axter