The CMA is likely to stay the course given the expected political changes in the UK.

Britons will vote in a general election for the first time since 2019 on July 4. The ruling Conservative Party is expected to lose its majority and hand power to the opposing Labour Party for the first time in 14 years.¹

If Labour gains the overwhelming majority that the polls predict, we are likely to see legislative and regulatory changes in the UK. However, it is unlikely that a Labour government will seek to politically influence the Competition and Markets Authority (CMA) for three reasons. First, Labour has actively sought to be pro-business and pro-investment in the UK and is therefore unlikely to encourage the CMA to block deals. Second, even if Labour decides to increase antitrust enforcement, it is likely to do so independently of the CMA. Finally, even if Labour decides to change antitrust policy through the CMA, it is likely to do so through a nomination process over time. Therefore, a change in political power is likely to have only a nominal impact on UK competition law.

UK Competition Policy Review

Competition law in the UK is contained in two acts: the Competition Act 1998² and the Enterprises Act 2002.³ Parliament changed these laws by passing the Enterprise and Regulatory Reform Act 2013.⁴ Under this Act, the CMA became a non-ministerial department (NMD) that consolidated and replaced the Office of Fair Trading and the Competition Commission.⁵ The CMA reached full operational capacity in 2014, meaning that the Labour Party, which was last in power in 2010, has never been in power during the CMA’s existence.

As an NMD, the CMA is very independent from the political influence of Parliament. While the government appoints the members of the CMA board and panel, political actors avoid openly criticizing the NMD,⁶ which are usually created to protect certain government bodies from political influence.⁷ So when the government wants to change the way NMDs operate, it does so through legislation rather than through political pressure on NMDs. A recent example in the competition context is the Digital Markets, Competition and Consumers Act 2024, which was passed by Parliament in May to extend the CMA’s powers to regulate the largest technology companies.⁸ These provisions demonstrate that, as markets change and new potential antitrust concerns arise, Parliament will legislate rather than seek to influence the CMA through political pressure.

The Labour Party courted business

Increased CMA intervention would be even less likely under a government led by Keir Starmer, the Labour leader. While the party moved further left on economic issues under former leader Jeremy Corbyn, Starmer has moved Labour back towards the left of centre⁹ and began establishing contacts with business leaders in the UK and the rest of Europe.¹⁰ Although the Labour Party manifesto is titled “Change”,¹¹ the party’s most important promise to the business world was economic stability.¹² Labour hopes that such stability will encourage investment and provide an alternative to other European countries that may be less stable and where economic activity may be exposed to greater political risk.¹³ Against this backdrop, it is hard to understand why Labour would press the CMA to act more aggressively and create uncertainty for businesses considering a deal.

There may be a limited exception: Labour may seek to influence the CMA in relation to markets that have historically been investigated, either politically or by the CMA. For example, Shadow Transport Minister and Labour MP Louise Haigh recently called on the CMA to investigate the private motor insurance market.¹⁴ Motor insurance pricing has been the subject of regulatory debate for over a decade,¹⁵ So Labour’s control comes from ongoing debates rather than any broader regulatory stance.

Therefore, while it is unlikely that a Labour government will start new fights with businesses by encouraging increased oversight of the CMA, we should not expect Labour to avoid previously identified concerns about potentially anti-competitive markets. This is a limited lens through which we can expect a Labour government to seek to exert political influence on the CMA. Moreover, as noted, the CMA is in any case relatively insulated from political influence.

Anticipated mandate, manifesto suggests alternative measures

Labor also has better alternatives to pressuring the CMA if it hopes to change competition law. First, commentators predict that the electorate will provide a clear Labor majority.¹⁶ Therefore, if the Labour Party is counting on increased oversight and enforcement of market competition rules, the party will easily find support in Parliament and will have to pass appropriate legislation.

Second, Labour’s manifesto suggests the party intends to protect markets and innovative companies with new measures. Among the bureaucratic arms Labour plans to create is an Office of Regulatory Innovation, which would “hold regulators to account” for the regulatory backlog that prevents companies from introducing innovative products;¹⁷ an Industrial Strategy Board that will “ensure an entrepreneurial environment, with a regulatory and competitive framework that supports innovation, investment and high-quality jobs” through long-term economic planning;¹⁸ and the National Infrastructure and Services Transformation Authority, which will focus on “strategic infrastructure priorities.”¹⁹ While none of these bodies will directly enforce competition law, they are a sign of Labour’s willingness to shape innovation and growth through the creation of new government bodies. It is conceivable that Labour will establish other bodies that will focus more directly on competition law enforcement.

Given the Labour Party’s well-publicised mandate, this government would likely avoid influencing the politically independent CMA if the party could either legislate new competition law or establish a new, politically influenced bureaucratic body to implement antitrust policy objectives.

Possibility of influencing through nominations

While Labour may avoid exerting political pressure on the CMA, it can change the CMA’s ideology through appointments. The CMA panel, which conducts in-depth merger investigations, consists of 33 panel members who are appointed for up to eight years.²⁰ Of the current members, 18 were appointed in 2017–2018.²¹ Furthermore, after 2020, only one management board member was appointed.²² In this way, a Labour government would appoint more than half of the panel over two years, and over four years the panel would undergo almost complete turnover. Therefore, if Labour finds it difficult or politically unpopular to change the current competition laws, it could influence the application of the current laws by replacing outgoing panel members with new members who are more in line with the government’s views on competition law enforcement.

If you have any questions, please contact Cormac O’Daly.¹

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¹ We would like to thank Nicolas Tabio, WilmerHale summer associate.