CBI demands mergers reform

The Confederation of British Industry has called on the government to deregulate mergers where turnover is less than £5m to stimulate growth.

The CBI set out its proposals as part of the government’s consultation on competition.

The body also said the government must drive down the cost of market investigations into failures of competition.

Matthew Fell, CBI director for competitive markets, said:

“The UK competition regime is well regarded, robust and independent, but this consultation is a chance to make the system more efficient, open up markets even more and unlock investment to create growth.

“As an immediate win, the government should deregulate small mergers where turnover is less than £5 million which would stimulate growth through acquisition.”

Fell added: “It’s crucial that the competition framework keeps up with fast moving markets, such as the technology-driven, creative industries sector where business models and life-cycles are rapidly changing.

“Market investigations take a long time, are resource intensive and have a chilling effect on investment, so they should not be entered into lightly or used as fishing expeditions. Instead they must be limited to clear failures of competition and be subject to strict timetables.

“The competition system must deliver timely outcomes, allow companies to invest with a high degree of certainty, and any intervention should be proportionate to the scale of the perceived problem.”