Housebuilders' £100m offer after probe ‘definitely looks dodgy', Parliament told
Critics at Westminster suggested the developers made the offer to halt the investigation by the Competition and Markets Authority (CMA) 'into potentially illegal collusion … that could have inflated house prices'.
They argued the Government should insist on the watchdog completing its probe.
Assurances were also sought that the housebuilders at the centre of the inquiry would not be involved in building the affordable homes funded by the payout, which would see the firms 'simply get their money back'.
The CMA announced last week that Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry had offered the payment as part of a package of commitments to address concerns following the investigation, which was launched last year.
The settlement, which is set to go into affordable housing programmes across the UK, would be the largest ever secured by the CMA through commitments from firms under investigation.
The CMA will now consult on the commitments until July 24 and, if accepted, it will mean the regulator does not need to rule on whether the companies broke competition law.
As well as the payment, the housebuilders have agreed legally binding commitments not to share commercially sensitive information with rivals, such as the prices that houses were sold for, except in 'limited circumstances', the CMA said.
They also agreed to work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.
The firms have said the offer of voluntary commitments does not mean they admit any wrongdoing.
Speaking in the House of Lords, housing minister Baroness Taylor of Stevenage said: 'The £100 million additional funding proposed for affordable housing will mean more families can benefit from a safe and secure home.'
But Liberal Democrat Baroness Thornhill, a vice president of the Local Government Association, said: 'There could be an alternative version to this – major housebuilders pay £100 million to halt the CMA's investigation into potential illegal collusion through the sharing of competitively sensitive information that could have inflated house prices.
'While this settlement might appear a pragmatic, cost-effective solution, would it not be more useful to have some evidence-led answers about whether the business models of the major developers are a significant factor in the slow delivery of housing?
'Therefore, should not the Government insist that the CMA actually completes its investigation, rather than allowing a financial settlement that obscures the fact and definitely looks dodgy?'
Responding, Lady Taylor said: 'The CMA is continuing its work on this, and on July 9 it announced that it is consulting on its intention to accept commitments offered by the housebuilders in relation to the investigation.
'That consultation closes on July 25, and I have already set out some of the commitments that the seven companies have made.
'The £100 million payment, the largest secured through commitments from companies under investigation, will be split between affordable housing programmes across all our four nations.
'I hope that will make a significant contribution to delivering the affordable housing we all want to see.'
Tory former housing minister Lord Young of Cookham said: 'If the Competition and Markets Authority confirms this £100 million payment for anti-competitive activity, can the minister give an assurance that none of the affordable homes to be built with that money will be built by the volume housebuilders responsible for this activity? Otherwise, they'll simply get their money back.'
Lady Taylor said: 'I am sure that the Competition and Markets Authority, as part of its consultation, will be looking at the best way of distributing that money, so it is not just recycled to the people who caused the problem in the first place.'
Liberal Democrat Lord Rennard said: 'The one-off payment of £100 million towards affordable housing is only about 3% of the operating profit of the five biggest housebuilders this year. Is this a relatively small penalty for them to pay for anti-competitive practices over many years?'
Lady Taylor said: 'This is the biggest settlement ever achieved by the CMA.'
She added: 'We have to consider what is appropriate in these circumstances. I am sure the CMA has done that.'
A CMA spokesperson said: 'Our year-long study of the housing market found that the complex and unpredictable planning system, together with the limitations of speculative private development, was responsible for the persistent under-delivery of new homes in the UK.
'It was also clear that concerns about sharing of confidential information, while important, were not the main driver of the undersupply of housing.
'The £100 million payment we have secured for affordable housing would provide immediate benefits across the UK, without a lengthy further investigation.
'It is in line with fines levied in similar cases that have taken many years to conclude and comes alongside a set of commitments which fully addresses our competition concerns.'
Bellway, which has agreed to pay £13.5 million, said: 'Bellway's offer of commitments does not constitute an admission of any wrongdoing, and the CMA has made no determination as to the existence of any infringement of competition law.
'Bellway welcomes the CMA's consultation on the voluntary commitments and will continue to work constructively with the CMA throughout the process.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sky News
an hour ago
- Sky News
US judge rejects justice department bid to unseal Epstein grand jury materials
A judge in the US has rejected a justice department bid to unseal grand jury materials related to the sex offender Jeffrey Epstein. The US government had filed a motion to unseal grand jury transcripts related to Epstein, a former financier who took his own life while awaiting trial in 2019. Last Friday, Donald Trump said attorney general Pam Bondi had been asked to release the transcripts because of "the ridiculous amount of publicity given to Jeffrey Epstein". The Department of Justice said criminal cases against Epstein and his former girlfriend, Ghislaine Maxwell, were a matter of public interest. The judge's decision is the first ruling in a series of attempts by President Donald Trump's administration to release more information on the case amid calls by some in his MAGA support group for the full details of Epstein's activities to be released. Please refresh the page for the latest version.
The Independent
2 hours ago
- The Independent
Why Angela Rayner's comments on summer riots are part of a power play
At least three times now, Angela Rayner has given a major TV interview where she has insisted she does not want to be prime minister. The problem for the deputy prime minister, however, is that her rejections of the crown are not very convincing. And if there is a reason why nobody in Westminster really believes the deputy prime minister in regards to her own ambitions, the intervention on Tuesday during the final cabinet meeting before the summer recess underlined it. Her warning about a summer of riots, linking them to economic woes and failures on controlling migration appeared to be a masterclass of political timing and messaging. At the same time, though, there is surprise among her allies that the normally dull cabinet briefing used her 'spicier language' in a way which has drawn criticism of her. But whether Ms Rayner was happy with the reporting of it or not, there was no doubt that the intervention revealed a politician who has now emerged as one of the most powerful figures in government. There is widespread speculation among Labour MPs that the deputy prime minister is now positioning herself as the lead option to replace Sir Keir should he fall - and at the same time offer a different type of Labour government to the Starmerite project. In terms of political timing, Ms Rayner's intervention worked because it put a full stop to the end of a deeply troubled first year for Sir Keir. The speed with which the public fell out of love with Starmer's government after last year's election landslide, the anger over welfare cuts, winter fuel and other issues has poisoned the initial 12 months of Labour's return to power for the first time in 14 years. With the party at around 22 points in the polls and Nigel Farage 's Reform UK touching 30 points, they know they are in trouble. The threat (imagined or otherwise) of a Jeremy Corbyn-led party could pull away even more support. Ms Rayner ensured that as MPs headed to off on their summer breaks, the last thing they had in their minds was her as a 'more authentic' voice of Labour. There is an increasing feeling within Labour circles that Ms Rayner's 'real Labour' approach to politics is a more effective way of dealing with Farage and Reform, with the party appearing only too happy to pinch leftwing ideas including nationalising steel and the water industry, as well as paying out more benefits. The other, cruder part of the timing is that it was just a week away from the one year anniversary of the awful murders of three children in Southport, an event which triggered the riots across the country. Those riots were the first major challenge to a new Labour government last July and August, with Sir Keir robbed of any post-election honeymoon as the prime minister cancelled his holiday to deal with the unrest. With protests in Epping and problems beginning to stir with both the far right and far left, Ms Rayner was laying down a marker that this time they were ready for it. But there is a problem. As Michael Gove has pointed out, this cavalier use of a threat makes it look like the government 'is at the mercy of events'. Or at least that is what critics of hers will argue. When she returns after the summer, Ms Rayner is hoping to get an official Office of the Deputy Prime Minister, a real platform to wield power and an alternative centre of power to Downing Street. This has been won on the back of her saving the prime minister's skin in the welfare rebellion and negotiating a peace settlement over benefits cuts. The kicking out of four rebels only seems to have stirred up more discontent about Starmer not putting rebels off. Labour tends to not follow the Tory approach of quickly ditching leaders. But Ms Rayner has finished this first year ensuring that she is the clear frontrunner should the current prime minister's position become untenable.
The Guardian
2 hours ago
- The Guardian
UK competition watchdog to act over Apple and Google's mobile platforms
A UK watchdog has said it intends to take action to open up Apple and Google's mobile platforms to more competition to benefit consumers, businesses and app developers. The Competition and Markets Authority has proposed to designate the tech companies as having 'strategic market status' – as they hold an 'effective duopoly' for access on mobile devices – and now intends to force the two companies to make changes to their mobile platforms. The regulator said that it had published 'roadmaps' for Apple and Google and that it would take a 'proportionate, pro-innovation' approach to 'promote competition in digital markets while protecting UK consumers and businesses from unfair or harmful practices'. The CMA said it would, in the first instance, focus on areas such as the tech companies' app stores – which have been criticised by developers over issues including fees of up to 30% for transactions – to ensure a 'fair and transparent' app review process, as well as making sure that smartphone users could 'steer' away from app stores to make purchases. The watchdog, which launched an investigation into the US tech companies earlier this year, will also address restrictions Apple imposes on digital wallets to ensure that competing financial technology companies can compete. 'Apple and Google's mobile platforms are both critical to the UK economy – playing an important role in all our lives, from banking and shopping to entertainment and education,' said Sarah Cardell, the chief executive of the CMA. 'But our investigation so far has identified opportunities for more innovation and choice. Time is of the essence: as competition agencies and courts globally take action in these markets, it's essential the UK doesn't fall behind,' she said. However, the CMA said it did not at this stage intend to force major changes such as requiring Apple to allow alternative app stores, or alternative payment methods for in-app purchases beyond its existing payment system. Tom Smith, a competition lawyer at Geradin Partners and a former CMA director, said the competition watchdog was 'ducking' taking major decisions 'which might draw political heat'. 'The CMA is implementing the regime in a thoughtful and authoritative way, but it is doing it more timidly than it should be,' he said. 'It is proposing some useful measures that would open up competition in digital markets, but it is ducking issues that would really threaten the entrenched positions of Apple and Google, and which might therefore draw political heat. For example, they have postponed the possibility for alternative app stores to challenge the App Store's monopoly on Apple devices.' Tim Sweeney, the founder and chief executive of Fortnite maker Epic, which has had legal battles with Google and Apple in the US, criticised the CMA's approach as 'surprisingly weak'. 'The monopolised UK app store economy has all of the vibrancy of a Soviet supermarket,' he said in a post on X. 'And consideration of unblocking competing app stores is delayed to 2026.' The company said it could not launch its Epic Games Store on Apple's iOS platform in the UK – as it was doing in EU countries and later this year in Brazil and Japan – and that availability of its globally popular Fortnite game on Apple phones in the UK was 'now uncertain'. The UK competition watchdog announced its investigations into Apple and Google's mobile platforms in January. When the investigation was launched, the CMA said that virtually all smartphones sold in the UK were pre-installed with Apple's iOS or Google's Android operating systems, while their app stores and browsers had privileged positions over third-party products and services. Apple's Safari and Google's Chrome dominate the mobile browser market on iPhones and Android devices. The CMA investigation was launched days after the appointment of Doug Gurr, the former country manager of Amazon UK, as its new chair. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The government, which has pushed for a shake-up of regulation to kickstart UK growth, was forced to deny it was 'in the pocket of big tech' after the appointment. Tech firms, publishers and the consumer watchdog Which? subsequently wrote to the chancellor, Rachel Reeves, raising concerns that Gurr's appointment posed a threat to the independence of the CMA. Gurr said he would make the CMA's investigations into mergers and takeovers 'simple and rapid', and Cardell said in February that a change of strategic direction was needed. Apple responded to the CMA's decision to act by saying the proposed new rules could hamper innovation and threaten privacy and security. 'We're concerned the rules the UK is now considering would undermine the privacy and security protections that our users have come to expect, hamper our ability to innovate, and force us to give away our technology for free to foreign competitors,' a spokesperson said. 'We will continue to engage with the regulator to make sure they fully understand these risks.' Google said its products were open-source and offered choice, security and innovation for users. 'That's why today's announcement is disappointing and unwarranted,' said Oliver Bethell, the senior director, competition, at Google. The company said that in 2022 its Android operating system generated more than £9.9bn in revenue for British developers, supporting more than 457,000 jobs. 'It is therefore crucial that any new regulation is evidence-based, proportionate and does not become a roadblock to growth in the UK,' Bethell said. If a company is designated as having 'strategic market status', that status can last for a five-year period, and breaches of conduct rules can result in fines of up to 10% of global turnover.
