Ensuring that markets work well for businesses and consumers – a strategic assessment of markets in Scotland

Background

Purpose and Methodology

Purpose

The Strategic Assessment of Markets in Scotland aims to:

• provide an overview of the efficient functioning of markets in Scotland and their contribution to economic growth;
• highlight where Scotland's economic, geographic and social circumstances may have an impact on the competitiveness of markets; and
• highlight issues with either current or potential consumer protection or competition concerns which may merit further investigation.

This Assessment of Markets in Scotland brings together existing intelligence and data on Scotland's economy, markets and consumers with evidence and insight from a range of key stakeholders. This evidence has been gathered by the Scottish Government and through consultation with Scottish Government and external stakeholders.

The information and data gathered for the Strategic Assessment of Markets in Scotland has been used to identify the key areas of current or potential competition concern in Scotland. This is the first step in identifying issues that may be causing detriment to consumers in Scotland. In addressing these issues, the Scottish Government will work in close partnership with stakeholders to address the detriment to Scottish consumers. This Assessment contains actions that the Scottish Government will take forward in order to address market failures in Scotland. In taking action on these issues, the Scottish Government will work in close partnership with stakeholders to address the detriment to Scottish consumers.

Methodology

Evidence Gathering

The Scottish Government has gathered evidence from a range of sources including internal policy colleagues, trading standards enforcers, regulators, stakeholders representing consumers and businesses and experts on consumer and competition issues.

The Scottish Government attended a series of workshops held by the Competition and Markets Authority ( CMA) in order to identify issues that could inform the Strategic Assessment of Markets in Scotland, including:

• an internal CMA workshop to consider potential areas of study on markets that might have a particular Scottish dimension, local Scottish markets, or where there may be different causes or levels of detriment to consumers in Scotland; and
• a series of thematic meetings that helped to inform the Assessment on the following topics: vulnerable consumers, disruptive technologies and public services.

The CMA has supported the Strategic Assessment of Markets in Scotland by helping scope relevant issues through its workshops and by acting as a critical friend throughout the entire process.

Filtering of Evidence

Specific markets have been included within the Strategic Assessment of Markets in Scotland for one or more of the following reasons:

• there are indications that the market may not be working well for Scottish consumers;
• the issues in the market disproportionately affect Scottish consumers; or
• the relative size of the market means that the issue may pose a greater level of detriment to Scottish consumers. This includes demographic and geographic circumstances.

SUMMARY OF ACTIONS

Household Expenditure: The Scottish Government will seek to gain a better understanding of the variation in consumer spending based on an individual's social, geographic and economic circumstances.

Productivity: The Scottish Government will seek to gain a better understanding of the links between productivity and competition with the aim of developing metrics to measure this relationship.

Businesses: The Scottish Government will carry out research into Scottish businesses' attitudes to competition and competition issues and will consider how to engage businesses more in competition matters.

Disruptive Technologies: As part of a wider package of work considering the balance between competition and regulation, the Scottish Government will carry out research to consider how to ensure Scottish businesses are able to make the most of the arrival of disruptive technologies and that market structures do not unnecessarily restrict the entry of new disruptive business models.

Consumers: The Scottish Government will consider whether the demographic and geographic circumstances of Scottish consumers have an impact on their behaviour or whether there is a cultural tendency for Scottish consumers to be more loyal to Scottish brands, particularly in the regulated sectors.

Switching: The Scottish Government will undertake a survey to establish the extent of switching and the barriers that consumers face. We will use the results from this survey to identify the characteristics of different types of switchers with the aim of developing targeted policy interventions.

Delivery Charges: The Scottish Government will continue its discussions with stakeholders to explore a range of sustainable solutions for rural communities.

Regulated Sectors: The Scottish Government will continue to ensure that on-going competition and regulatory investigations and studies take sufficient account of Scottish issues.

Legal Sector: The Scottish Government will ensure that consumers are better informed about their ability to switch property factor and of unregulated legal services.

Localised Markets: The Scottish Government will work with key partners to undertake scoping research to establish the features of localised markets.

Public and Private Markets: The Scottish Government will consider how best to provide consumers with the information needed to make informed decisions in complex and difficult markets such as health and social care.

Transport: The Scottish Government will consider whether there is adequate provision of consumer advocacy and redress as the first stage of our in depth research into transport services in Scotland.