Government Announces New Export Help for the UK’s Creative Industries

The Government’s consultation on copyright, addressed the regulatory impact and costs to business of the proposals to impose statutory codes on collective licensing societies, and to introduce new exceptions.

The initial assessments will be reviewed in the light of evidence collected during the consultation process. SBID participated in this process and is pro-active in the Government’s continuing research programme. The consultation published in December 2011 was accompanied by a set of initial impact assessments; the public outcome to date is available from the Intellectual Property Office website.

Great British companies such as British Airways, Shell, Unilever, the Co-op, Tesco, and Balfour Beatty have been investigated over several years for alleged price fixing, fined nearly a quarter of a billion pounds by the OFT, only for each case to collapse because there was no basis in fact, law or economics to support them. The net result is a huge bill for the taxpayer to pay the legal fees. There are 600 employees at the OFT costing us £60 million per annum, let alone compensation to the companies that have been improperly charged so a review is very much needed.

Last year, the Government consulted on proposals to reform the competition regime including merging the Office of Fair Trading and the Competition Commission to create a single Competition and Markets Authority. Among other things, the consultation sought views on proposals to improve the enforcement of the anti-trust prohibitions. The Government will announce their conclusions following the consultation shortly.

One reason why the review looked at merging the Office of Fair Trading and the Competition Commission is to make sure that they are right and fit for purpose for our times and that there are the right resources needed for the world that we live in today. There is no doubt about it that the Office of Fair Trading has had a wonderful reputation in the past, and we would like to think that the new merger, if it goes forward, will take forward the very best of the OFT and the very best of the Competition Commission.

The Government’s aims is to build on the best of the OFT and the best of the Competition Commission in the creation of a world-leading Competition and Markets Authority. The Government recognise that the system for the enforcement of the anti-trust prohibitions is not working as well as it should. Cases take too long and a strong challenge to decisions is often mounted on appeal. It is worth remembering that Britain has a reputation in the world as being one of the best places in which markets work. They are open and fair. We have to make sure that we have timely and effective enforcement. That is what the consultation has been about.

The government Ministry for Fair Trade agrees that whatever reorganisation of the competition authorities is to take place in the future, adequate resources must be made available to ensure that there is effective combating of price-fixing cartels and other anti-competitive practices. The record shows that, on the matter of liability as distinct from the precise amount of penalty, the OFT has been upset on appeal to the Competition Appeal Tribunal only relatively rarely. It has admittedly been told by the Competition Appeal Tribunal that the amount of penalty is sometimes too large and has been reduced. Last year, and I think the year before, the OFT brought in some £60 million to the Exchequer from fines. Fines that had been upheld by the Competition Appeal Tribunal! SBID has been actively involved in the programme to review and reform faults in the current system of interior design and propose methods for improvement over the past three years. The SBID report has been submitted.

The Office of Fair Trading is of course an independent body and is best placed to balance the work that it does; it is not the Government’s place to tell it what to do. However, it is almost impossible for the ordinary consumer trying to deal with the combination of the OFT, Consumer Focus, Consumer Direct, the CBA and the Competition Commission to know where to go when there is an issue and this requires further clarity.

With the restructuring coming, the department must decide where change will take place. It will shortly put some real clarity on its website to direct people under the current structure and with some clear indication where restructuring is going to take us.

The Government will reveal their conclusion in the next few weeks after the finalisation of the consultation…… watch here!

Interior Designers have regularly been regarded as untrained in business acumen, often quite justifiably but often it is due to third party suppliers taking designers deposits and then going bankrupt, leaving the designer without the product and having spent the client’s money.

Edward Davey, the Minister for Employment Relations, has launched a consultation about bankruptcy and company winding up. The consultation document sets out detailed proposals to reform the application process for bankruptcy and compulsory winding up by replacing the current court route with a new administrative process.

Uncontested applications would be determined by an adjudicator and the court would be involved only at the application stage to the extent that there is a dispute that can be resolved only by judicial intervention. The minister proposes to allow electronic applications to be made to an adjudicator, who will be a person appointed for that purpose by the Secretary of State and whose office would be within the Insolvency Service.

Debtors who want to apply for bankruptcy for themselves would have the choice of submitting electronic or paper applications, and the option of making the requisite payment to enter the process by instalments. Where creditors are looking to instigate proceedings, a new mandatory pre-action process would incentivise debtors and creditors to communicate with each other and thereby reach a mutually satisfactory solution to the debt problem without recourse to a bankruptcy or winding up application.

This reflects the government desire that people are empowered to make the right decisions for themselves about their finances, as set out in the government response to the call for evidence about personal insolvency.

Litigation can be costly and time consuming. This new process should therefore deliver a more efficient service as well as saving valuable public and private resources. In order to ensure that the interests of both debtors and creditors are protected, the court would still have an important role and the route through the courts will of course remain as an independant solution of resolve. Not only would it decide the outcome of disputes, but certain petitions for the winding up of companies, such as those based on public interest grounds, would continue to be determined by the courts.

We intend actively to engage with interested parties throughout the consultation period, and welcome views on whether the proposals will deliver a workable and efficient application process for bankruptcy and most compulsory windings up.