Yahoo Finance The CMA should tackle the biggest threat to competition in the housing market: our planning system
The Competition and Markets Authority (CMA)'s had a busy few weeks. Fresh from looking at vets, the watchdog’s now probing the £2.5 billion tie-up between housebuilders Barratt and Redrow to make a firm which would build about 23,000 houses a year.
And of course it’s been only three weeks since that same regulator published its big report into housebuilding as a whole.
The CMA found evidence of sharing confidential information, but it said the real blame for our housing supply crisis lay at the feet of the planning system.
What was the remedy? Well, the regulator says that “Given the wider policy trade-offs and complexities that are inherent in the design and operation of the planning system, the CMA does not consider it appropriate to make specific recommendations to governments”.
So any hopes of reform will go nowhere.
There’s no doubt that a lack of options in the housing market has led to worse outcomes for most Brits. And the CMA identified a culprit. So why can’t anything be done?
When a company becomes too big and stifles competition, the CMA can take action, as it’s threatening to do with the new Barratt/Redrow group.
But when Government stifles competition it seems that it just says “that’s a shame” and moves on.
Maybe the watchdog's right that the specifics get too political for a regulator to wade into, but it doesn’t even have to. Just tell local authorities: "You're harming competition, we don’t care how you solve it, just do something.” Then set a deadline, and if there’s not reasonable progress, it can use its statutory powers to take action.
Last year, when the CMA faced criticism from Microsoft, we saw arguments about whether we want a watchdog with teeth to protect consumers or a muzzled one to encourage growth. But what if it could be strong and pro-growth?
Let's set it loose on the planning system.
