On Dec. 5, 2013, the Chancellor of the Exchequer delivered the UK's annual Autumn Statement for 2013. Included in the announcement were plans to increase the funding for the new Competition and Markets Authority (CMA) for 2014-2015 and measures to address concerns over the supply of tied banking products to small and medium-sized enterprises (SMEs).
The CMA is to benefit from an additional £12 million ($19.8 million) in funding in 2014-2015, increasing its total budget to around £59.9 million ($99.2 million). These additional resources have been provided to help the CMA deal more effectively with cartels and deliver a "step change" in competition enforcement. It is hoped that this will, in turn, help to encourage increased investment, the entry of new participants to the markets, and the adoption of innovative technologies.
Elsewhere, the Autumn Statement highlighted the alleged practice by banks of making loans available to SMEs only on the condition that they open or maintain a business current account (BCA), effectively tying them to the bank in question, and noted that the government has requested that the Office of Fair Trading (OFT) take "decisive action" to end the practice. The OFT is currently conducting a market study of SME banking and a review of undertakings given by nine banks in the aftermath of a 2002 investigation into SME banking by the Competition Commission, which included commitments to limit the tying of BCAs to other banking services. The OFT has not yet reached a decision over whether the undertakings have been breached and has written to the banks to request further information on the systems and procedures they have in place to ensure that they are complying with these requirements.
The Autumn Statement is available here. The OFT's announcement regarding SMEs can be found here.
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