Selling consumers short

Dianne HayterDianne Hayter on the government’s welcome but weak plans for a Consumer Rights Bill

One welcome thing to come out of the Queen’s speech was the promise of a Consumer Rights Bill – even if it is a belated recognition by the Coalition of the needs and rights of consumers. 

It is good that the proposed bill will consolidate – and simplify – consumer law.  And it is good that it will extend certain rights to digital downloads, whilst enabling redress to all consumers where a company has broken competition law. But is that it?

To date, Ministers have rejected our demands for consumer panels to advise the new Prudential Regulatory Authority and the Competition and Markets Authority. They resisted our attempts to require financial services firms to exercise a fiduciary duty towards their retail savers and beneficiaries.  They closed Consumer Focus against our advice, and cut back funding of trading standards – weakening the help for vulnerable consumers so that consumer scams will be harder to police. They dithered on our demands for letting agents to have to belong to an Ombudsman scheme until the very last moment when Labour’s high turnout in the Lords forced their hand. And they have failed to introduce a register of lobbyists, thereby coming to aid of newspaper proprietors, tobacco, food and drink companies which can afford to pay public affairs companies.

In short, the government has shown itself lacking in resolve to help consumers negotiate complicated or unfair markets. It has failed to put their interests centre stage.

So whilst, as I say, we should welcome the promised bill, it simply doesn’t go far enough. 

We want firms found guilty of consumer law breaches to pay redress to affected consumers without them each having to apply individually. As with our victory over letting agents, we will be looking to ensure the bill provides consumers more widely with strong, accessible collective redress mechanisms (similar to those in Portugal and Australia).

There is also a larger consumer agenda which Ministers have ignored, from cold calling to fuel bills (charged by utility companies making mega profits) which have soared £300 a year since the start of the Coalition. We need a tough new energy watchdog to force suppliers to pass price cuts onto consumers, and to ensure the over-75s automatically get the cheapest tariff.  

Likewise, we’ve seen rail fairs up 9% a year, after the government allowed train operators to increase some fares by up 5% above the supposed ‘cap’.  Passengers should have the right to the cheapest available ticket without having to be a whizz-kid on the internet.  

Consumers are also savers but, on retirement, pensioners are discovering that nearly half the value of their pension fund has been wiped out by hidden costs and charges. We need transparent charges on pensions and savings, with charges capped at 1%.

The touted Consumer Rights Bill will help – but only in the smallest of ways. We need a culture change, to respect and help consumers get a fair deal. We need to tackle rip-offs and sharp practices. And we need government to be on the side of users and consumers, not a voice for powerful producers and service providers.

Baroness Dianne Hayter of Kentish Town speaks for Labour on consumer affairs issues in the Lords

Published 13th May 2013

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