Britons will vote in Parliamentary elections on July 4 for the first time since 2019. The governing Conservative Party is expected to lose its majority and cede power to the opposing Labour Party for the first time in 14 years.1
If Labour secures the overwhelming majority that pollsters predict, we will likely see a legislative and regulatory shift in the United Kingdom. Yet, a Labour government is unlikely to attempt to influence the Competition and Markets Authority (CMA) politically for three reasons. First, the Labour Party has actively sought to be pro-business and pro-investment in the United Kingdom and is therefore unlikely to encourage the CMA to block transactions. Second, even if Labour decides to increase antitrust enforcement, it would likely do so independently of the CMA. Finally, even if Labour chooses to change antitrust policy through the CMA, it would probably do so through the appointments process over time. Therefore, a change in political power will likely have only a nominal effect on competition law in the United Kingdom.
Overview of UK Competition Policy
UK competition law is principally contained in two laws: the Competition Act 19982 and the Enterprise Act 2002.3 Parliament amended these laws when it passed the Enterprise and Regulatory Reform Act 2013.4 This law established the CMA as a non-ministerial department (NMD) that consolidated and replaced both the Office of Fair Trading and the Competition Commission.5 The CMA became fully operational in 2014; therefore, Labour, which last held power in 2010, has never governed during the CMA’s life.
As an NMD, the CMA is very independent of Parliament’s political influence. While the government appoints members to the CMA’s board and panel, political actors have avoided overtly criticizing NMDs,6 which are generally created to shield certain governmental bodies from political influence.7 Thus, when the government wants to change how an NMD operates, it tends to do so by legislating rather than exerting political pressure on the NMD. A recent example in the competition context is the Digital Markets, Competition and Consumers Act 2024, which Parliament passed in May to expand the CMA’s power to regulate the largest tech companies.8 This legislation demonstrates how, as markets shift and new potential antitrust concerns arise, Parliament will more likely legislate than seek to influence the CMA through political pressure.
The Labour Party Has Courted Business
Increased CMA intervention would be all the more unlikely under a government led by Keir Starmer, the Labour Party Leader. While the party moved further left on economic issues under former Leader Jeremy Corbyn, Starmer has moved Labour back toward the center-left9 and has begun cultivating relationships with business leaders across Britain and the rest of Europe.10 While Labour’s manifesto is titled “Change,”11 the party’s overarching promise to business has been economic stability.12 This stability, Labour hopes, will encourage investment and provide an alternative to other European countries that may be less stable and where business may be subject to more political risk.13 Against this backdrop, it is difficult to see why Labour would pressure the CMA to become more aggressive and create uncertainty for businesses contemplating transactions.
There may be a limited exception: Labour may attempt to influence the CMA regarding markets that have been historically scrutinized, either politically or by the CMA. For example, Shadow Transport Secretary and Labour MP Louise Haigh recently called on the CMA to investigate the private motor insurance market.14 Motor insurance prices have been a source of regulatory debate for more than a decade,15 so Labour’s scrutiny is explained by ongoing debates rather than a broader regulatory position.
Therefore, while it is unlikely that a Labour government would pick new fights with businesses by encouraging increased CMA oversight, we should not expect Labour to shy away from previously identified concerns about potentially anticompetitive markets. This is the limited lens through which we can expect a Labour government to try to politically influence the CMA. Further, as mentioned, the CMA is relatively insulated from political influence in any event.
Predicted Mandate, Manifesto Suggest Alternative Measures
The Labour Party also has better alternatives to pressuring the CMA if it hopes to change competition law. First, commentators predict that the electorate will deliver a decisive majority to Labour.16 Therefore, if Labour hopes to increase oversight and enforcement of market competition, the party should comfortably find the votes in Parliament to enact legislation.
Second, Labour’s manifesto suggests that the party intends to protect markets and innovative companies through new means. Among the bureaucratic arms Labour plans to establish are the Regulatory Innovation Office, which would “hold regulators accountable” for regulatory backlogs that prevent companies from deploying innovative products;17 the Industrial Strategy Council, which “will ensure a pro-business environment, with a competition and regulatory framework, that supports innovation, investment, and high-quality jobs” through long-term economic planning;18 and the National Infrastructure and Service Transformation Authority, which will focus on “strategic infrastructure priorities.”19 While none of these bodies would be directly charged with competition enforcement, they signal Labour’s willingness to shape innovation and growth by establishing new governmental bodies, and one could imagine Labour establishing other bodies that are more directly focused on competition enforcement.
Considering its publicized mandate, a Labour government would likely avoid influencing the politically independent CMA when the party could either comfortably pass new competition legislation or establish a new, politically influenced bureaucratic body to implement antitrust policy goals.
Ability to Influence Through Appointments
While Labour may avoid politically pressuring the CMA, it could shift the CMA’s ideology through appointments. The CMA panel, which conducts in-depth merger investigations, consists of 33 panel members who are appointed to terms of up to eight years.20 Of its current members, 18 were appointed between 2017 and 2018.21 Furthermore, only one board member was appointed after 2020.22 Thus, within two years, a Labour government would have appointed more than half the panel, and, within four years, the panel would have seen near-complete turnover. Therefore, if Labour finds it difficult or politically unpopular to change existing competition laws, it could influence the application of current laws by replacing outgoing panel members with new members who are more aligned with the government’s views on competition enforcement.
With thanks to Nicolas Tabio, WilmerHale summer associate.
Footnotes
