Competition Policy and State Enterprises in the U.K.

Abstract

The application of competition policy to nationalized industries (state enterprises) has been strengthened recently in the United Kingdom. Section 11(1) of the 1980 Competition Act broadened the Monopolies Commission oversight of state enterprises. In practice, the Commission will conduct an efficiency audit of each major nationalized industry every four years. The Commission will focus its review on the quality of services, manpower utilization and productivity, and pricing, distribution and purchasing methods of the state enterprise. These efficiency audits have been fairly well received. Their cost-effectiveness and the follow-through on the Commission's recommendations remain to be demonstrated.