The Consumer Protection and Markets Authority should have a statutory objective to promote competition, according to the Office of Fair Trading.
Giving evidence to the Treasury select committee this morning, OFT chief executive John Fingleton said the move would be consistent with the Government’s intentions for the CPMA.
He said: “The CPMA should have a top-line objective to promote competition, in other words in setting its rules, in thinking about how it regulates the industry it should think about promoting competition.
“It would be consistent with the intentions of the Government that the CPMA should be a consumer and market facing regulator.”
Fingleton has been tipped as a contender for the top job at the CPMA.
He told the hearing that despite progress from banks over transparency of charges, more needs to be done as it is a key driver for consumer inertia.
He said: “Each step has required a lot of engagement and work and progress has been incremental.”
“What concerns us is the inability of people to understand what they pay for their bank account, and the inability resulting from that for them to make any meaningful comparison between them.”
He said the OFT had “pushed its instruments as hard as it can” and the CPMA must take consumer inertia seriously and be given sanctions to help them.
Fingleton said the merger between Lloyds and HBOS “became a juggernaut that was difficult to stop” and that it was a mistake not to refer it to the competition commission.
He said: “We would have obviously preferred if they had used the reference to the competition commission and gone down that path. I think that was a mistake.”