July 2015 Budget: key competition and regulatory announcements

Practical Law UK Legal Update 5-617-2016 (Approx. 3 pages)

July 2015 Budget: key competition and regulatory announcements

by Practical Law Competition

Published on 08 Jul 2015 • United Kingdom

On 8 July 2015, the Chancellor of the Exchequer presented the July 2015 Budget. This update considers only announcements that may be of interest to competition practitioners.

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On 8 July 2015, the Chancellor of the Exchequer presented the July 2015 Budget. This update considers only announcements that may be of interest to competition practitioners. The most notable announcements relate to the government's aims to improve switching in energy markets and insurance markets. In addition, there are announcements about plans to reform funding and other arrangements in the rail sector.

The July 2015 Budget Report makes the following announcements that may be of interest to competition practitioners:

Energy. The government makes a number of announcements in relation to energy, including:
- The government welcomes the provisional findings of the Competition and Markets Authority’s energy market investigation (see Legal update, CMA provisional findings in energy market investigation).
- To help enable as many consumers as possible to be on the best available deal, and as part of wider work to promote competition, the government intends to:
  work with Ofgem with the aim of introducing 24-hour switching by the end of 2018, building on previous action to reduce switching times to 17 days;
  work with industry to introduce a switching guarantee to improve trust in the switching process;
  further develop the use of Midata to facilitate effective price comparisons; and
  work towards improved transparency and visibility on microbusiness tariffs, recognising the particular difficulties microbusinesses face in switching providers.
- To help reduce costs for energy consumers, the government will publish proposals on extending competitive tendering to onshore electricity transmission assets. This could save consumers around £390 million over the next 10 years.
Insurance. The government remains committed to ensuring customers can purchase insurance at a fair price. In particular, it has asked the FCA to review what more can be done to ensure that people are encouraged to shop around when they renew their insurance.
Railways. In addition to asking Sir Peter Hendy, the new Chairman of Network Rail, to do what is necessary to ensure Network Rail can deliver effectively and operate the railways safely, and to report by autumn 2015 with a plan to get the rail investment programme back onto a sustainable footing, the government also intends to take further action to improve incentives and drive improvements in Network Rail and the wider rail industry:
- the government has asked Nicola Shaw, Chief Executive of High Speed 1, to advise the government on how it should approach the longer-term future shape and financing of Network Rail. Nicola Shaw will work closely with Sir Peter Hendy and this work will be concluded before Budget 2016;
- the government has asked Network Rail and the wider rail industry to continue with work to devolve more power to route managers closer to the front line, so that the railways are more focussed on delivering what passengers need and to drive comparative benchmarking of the efficiency and effectiveness of individual routes;
- the government will change the way it channels public money through the industry, directing it through the train operating companies, so that Network Rail focuses firmly on the needs of train operators, and, through them, passengers; and
- the government will introduce a new approach to station redevelopment and commercial land sales on the rail network.
Competition in SME lending. The government will introduce final legislation implementing two major reforms to the SME lending market. The first will require the UK’s major banks to share credit information on their SME customers with other finance providers through designated Credit Reference Agencies (CRAs). The second will require those same banks to offer SMEs they reject for finance the opportunity to be referred to a Finance Platform that can help match them with alternative lenders (see Legal update, Small Business, Enterprise and Employment Act 2015: competition and regulatory issues).

For Practical Law's full coverage of the July 2015 Budget see July 2015 Budget coverage.

Source: Summer Budget 2015.

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