The Bribery Act could be good for British competitiveness

The government is concerned about the competitiveness impact of the new Bribery Act and that it might impede the UK's recovery from the recession.

There are two important reasons why this may be a misreading of the reality of the situation.

The first is that the Act could be used by the UK government to make the international landscape more competitive for UK businesses that are competing overseas. The way the US administration is using the Foreign Corrupt Practices Act (FCPA) highlights the point. Eight of the top ten monetary fines imposed by the US have been on European headquartered corporations, not US ones. The US administration has used the legislation in effect to try to help US corporations to compete by pursuing unfair competitors in Europe. The UK Bribery Act, which is cast even more widely than the FCPA can be used in the same way. This is not to say that the UK government should not also pursue corrupting UK companies - as these firms make it unfair for good British companies to succeed.

The second reason is that actions are already being taken in preparation for the UK Bribery Act which are putting enormous pressure on foreign companies to improve their practices and to reduce corruption. SEDEX the not-for-profit information exchange used by the UK retailers to screen suppliers is greatly enhancing the amount of information required from its 17,000 suppliers about their anti-corruption stance and policies. Over 4,000 of these suppliers are in China. A global telecoms company is screening tens of thousands of its suppliers and, like many other large UK companies, is now asking searching questions in its tender and bidding processes to ensure that overseas suppliers are free from corruption, as a price of doing business with the UK firm. Our French and German large clients are all working in the UK in some form and as a result are amending their practices to explicitly acknowledge the Act and to tighten up rules on facilitation payments as a result.

Forget the moral case for the Act and get on with it - if it is implemented and scrutinised well the Act could and should be good for British competitiveness.