All consuming

Dianne Hayter on why World Consumer Rights Day should make the Coalition reflect on its poor record

52 years ago today, President John F. Kennedy sent a special message to Congress on protecting the consumer interest. It began “Consumers, by definition, include us all”; and went on to outline measures to require better lending practices, ensure fair competition by protecting against monopoly, and strengthen laws to improve the availability and affordability of housing. 15 March is now World Consumer Rights Day.

Here in Britain we have a long history of protecting consumers – not least through the co-operative movement, of which I’m a proud member. But the current government has a weak record and might best use today to reflect on this.

The Coalition resisted rules on payday lending which would have protected people from a business model dependent on getting people into debt and keeping them there. The threat of defeat in the Lords forced action, but Ministers ignored Labour’s calls to make last Christmas the final one for rip-off loans; and we remain concerned about the amount of high-cost credit advertising seen by children.

The energy market is still rigged, at great cost to families and businesses - something David Cameron’s government has done nothing to change this. In a truly competitive market, prices would decline as wholesale costs went down. Yet when wholesale prices fell 45%, bills rose by 5%. (By contrast, when in 1962 US steel companies announced a price rise which would have damaged Americans’ cost of living, the Kennedy administration used its power to persuade them to reverse it.)

Ministers also had to be forced into regulating letting agents; and even then only agreed to a requirement for them to belong to an Ombudsman, rather than enabling the OFT to ban the unscrupulous ones, as they can with estate agents. Tenants therefore, remain less protected than home buyers.  

Meanwhile, the government has abolished the much respected National Consumer Council, which championed the consumer interest at home and in Europe. A national regulator with oversight of 25,000 estate agents and their redress schemes has now been replaced by Powys County Council’s trading standards department. 

And the Coalition has produced a Regulators’ Code which forces regulators to work ever more closely with the businesses they regulate, with no mention of the interests of those they are meant to protect: consumers and citizens.

The Consumer Rights Bill, which is set to arrive in Lords this Summer, is in many ways a welcome clarifying measure that will also help with getting refunds for faulty goods. But the Bill as it stands fails both to increase consumer rights in regard to services or permit collective redress even where consumer laws have been broken. It also completely ignores the EU directive on Alternative Dispute Resolution, which must be implemented next year.  

There is now a new consultation on the latter that promises to help consumers, but Ministers have wasted a golden opportunity to provide a single piece of legislation, with enforceable rights and a new system of Ombudsmen to cover all goods and services.

In 1975, Barbara Castle wrote how socialism for her wasn’t just about trade unionism, but “the gentle society in which every producer remembers he is a consumer too”. More recently, Ed Miliband said that “unaccountable concentrations of power wherever we find them don’t serve the public interest and need to be held to account”. Labour has a strong record of protecting citizens and individuals working together, and on World Consumer Rights Day we can and should celebrate that.

Baroness Dianne Hayter of Kentish Town is Shadow Consumer Affairs Minister in the House of Lords. She tweets @HayteratLords

Published 15th March 2014