Consumers benefit from increased competition, says report

New cars, economy flights and replica football kits have all become cheaper following government action to increase competition, according to a Department for Trade and Industry report published today.

A University of East Anglia team looked at six sectors where there has been action to enhance competition: retail opticians, retail book sales, replica football kits, European passenger flights, new cars and international telephone calls.

The report concluded that overall, increased competition in these sectors has lead to large price reductions, innovation and product improvement, with little evidence of harmful side effects.

For both international telephone calls and European economy airfares, average price was comfortably more than halved within a decade. In two other cases, new cars and replica kits, "very significant reductions" were found.

A second DTI report published today has concluded that the UK's competition regime compares favourably with those of other major OECD countries.

The 'Peer Review of Competition Policy' found that the UK is ranked third in the world after the USA and Germany. This is a similar result to a previous review carried out in 2001.

Competition Minister Gerry Sutcliffe said: "Our target is to have a competition regime which is level with the best by 2006. I am optimistic that we will be able to achieve this aim, and this report provides a useful marker of the progress we have made."

(gmcg)