The competition watchdog needs to explain its decisions better so that businesses know that they could be challenged, its former chairman has said.

Lord Andrew Tyrie said that the Competition and Markets Authority (CMA) is getting new powers after Brexit, despite not fulfilling its current duties.

“I think there needs to be a change of mindset in the institution as a whole,” he told MPs on the Business, Energy and Industrial Strategy Committee.

“I don’t see any point in giving the body more legislative power if there isn’t a change in mindset. As I said earlier it’s only acting on part of its statutory remit to a level that I think Parliament should be happy with.”

“The CMA is full of very able people, what we need to do is release their energy.”

He said that the CMA can do a lot more without getting new powers through new law.

“In big areas, in areas that concern the public, (the CMA) should hold a press conference and explain why those decisions have been taken,” Lord Tyrie said.

Then businesses “can hear that this body might just be round to see you, and might cause you some difficulties and might start investigating you if your conduct falls short of what’s required by law”.

The former chairman claimed that it was “very difficult” to persuade the authority to do anything on the price gouging during the pandemic.

But in the end the CMA said that it would take action if it noticed overpriced hand sanitiser. Just this was enough to change the behaviour of sellers.

He pointed to better work by competition regulators in Brussels, the US and Germany.

And the peer said that the CMA is nervous about losing cases if they go to court and that many businesses just see CMA fines as the cost of doing business.

“The fines are too small, much too small, and smaller than most other equivalent regulators in other jurisdictions can impose. We need substantial increases in fines.”

Business minister Paul Scully said that the CMA would need to report back to the Government after getting its new powers.

“We’ll clearly make sure that (the CMA) will be resourced for those extra duties that we’re asking them to do,” he told the committee.