New consumer powers for open competition, not broken competition - Miliband
New consumer powers for open competition, not broken competition – Miliband
Ed Miliband today announces a plan to put consumers at the heart of the next Labour government’s drive to build a new economy that tackles the cost-of-living crisis through greater competition.
Too often in the past regulators and politicians have ducked dealing with markets that aren’t working for consumers – from energy to banking.
Under Labour’s plans to address this, consumer groups including Which? and Citizens’ Advice will be asked to work with regulators to draw up an Annual Competition Audit of Britain’s economy. This will help set the agenda for regulators and government in the year ahead.
The report will identify broken markets and priorities for action. Government ministers and departments will be required to respond to any issues raised which fall within their responsibility within a strict three-month timetable.
This measure, which will be put on a statutory footing by the next Labour government, will ensure that for the first time the consumer will be at the table when priorities for action are decided.
The policy proposal builds on Labour’s plans to use properly regulated markets in energy and banking as a key weapon in the battle against the rip-off culture that has so damaged Britain’s economy.
Ed Miliband said:
“I am determined to lead Labour into the next election as a One Nation party of the consumer, small businesses, working and middle-class families who never thought they would be struggling with this cost-of-living crisis.
“There was a time when the Conservative Party stood for competition and consumers. But that time has gone. This generation of Conservative leaders has been entirely captured by powerful vested interests like the energy firms and the big banks.
“For too long families have been ripped off by the Bi g Six energy firms and young entrepreneurs have been starved of the investment they need by our uncompetitive banks.
“One Nation Labour will build a new economy based on open competition, not broken competition so we can earn our way out of the cost-of-living crisis. We will reset these markets by working with the best of British business and consumer groups.
“No longer will consumers have to shout from the outside. Under the next Labour government they will be given a direct say in the priorities for tackling abuses or concentrations of power which hold Britain back.”
The problem:
Currently decisions about whether markets are working in the interests of the British public are taken by politicians and regulators. And too often in recent years we have seen them drag their feet.
In the energy market
∙ OFGEM has failed to take action even where it identified problems. In 2008, it identified16 things that it thought needed to be improved for the market to work properly. In 2011 it admitted that 12 of these had got worse or stayed the same, but still took no real action.
∙ The Government has refused to back Labour’s plans to spur competition by separating out the Big 6 generation and supply businesses and forcing energy generators to sell their production into a common pool, out of which all retailers could buy.
In the banking market
∙ Mis-selling of interest rate swaps, has undermined 40,000 small businesses who should have been able to grow their way out of the cost-of-living crisis. It was only through the pressure of groups like Bully Banks that the regulator finally started to take action in 2012 and most of the businesses affected have still not received compensation.
∙ Report after report in recent years has highlighted that there is a serious lack of competition in our high street banking sector, from the Independent Banking Commission to the Parliamentary Commission. And the OFT even wrote to the Chancellor spelling out that the problem was not going to materially improve. Yet despite that consensus the Government have failed to act.
In the pub market
∙ In 2010, the BIS Select Committee highlighted an unfair and unbalanced relationship between the PubCos - the large branded pub chains that own the majority of pubs in the UK - who dominate the market and the small business owners who run pubs, and restrictive practices that prevent smaller breweries from accessing huge swathes of the trade.
The Select Committee concluded that self-regulation was no longer viable. The Government agreed there was a problem but have done nothing about it.
In all of these cases consumers were well aware of serious problems with markets not working competitively, and ordinary people and small businesses losing out as a result.
T he public have long known that the energy market was uncompetitive and unfair, with consumer groups leading the way by mobilising mass switching campaigns to get consumers a better deal. And small businesses have for years known that the five major banks weren’t serving their finance needs. It shouldn’t take national scandals to force regulators and politicians to act. And even today the Government and regulators refuse to implement the major reforms needed in each sector.
A new approach from One Nation Labour:
So the next Labour will take a new approach to driving up competition, as one of the long term changes we make to build an economy that can earn our way out of the cost of living crisis. Central to that new approach will be an invitation to the consumers of Britain into the decision-making processes. This will ensure that decisions about what the priorities for improving competition are always taken in the public interest and force p olicy makers to confront problems rather than simply leaving them to drag on.
The next Labour Government will introduce an Annual Competition Health Check, led jointly by consumers and the competition authorities, to ensure regulators and politicians act where markets do not work in the public interest. This will build on the Consumer Protection Partnership, but crucially include consumer organisations rather than simply statutory bodies like the CMA.
We will ask the consumer bodies including Which? and Citizens Advice to produce jointly with the Competition and Markets Authority and other statutory bodies an annual report that sets out both key competition issues in UK private markets and priorities for action. Some action will be for regulators, like the CMA, but some will be for Government. This will force the politicians to respond to the report, and to set out how they intend to tackle the issues raised.
This means the government will no longer be able to ignore problems such as the concentration in power in the energy, banking and community pub sectors.
Grassroots consumer activism is also crucial to driving fairer and more competitive markets. This measure sits alongside the Labour Party’s backing for the Big Switch campaign to get consumers a cheaper deal on their energy bills and wider work looking at measures to boost the role of consumers in encouraging competition on price and value in private markets.
Labour has already called for action to tackle the lack of competition in the energy and banking markets. And next Tuesday we will call a vote on the floor of the House of Commons on the need to introduce a statutory code to regulate the unbalanced relationship between the PubCos that own the majority of pubs in the UK and the small business owners that run pubs.
Ends For more information, please contact the Labour Party press office on 020 7783 1393.
Too often in the past regulators and politicians have ducked dealing with markets that aren’t working for consumers – from energy to banking.
Under Labour’s plans to address this, consumer groups including Which? and Citizens’ Advice will be asked to work with regulators to draw up an Annual Competition Audit of Britain’s economy. This will help set the agenda for regulators and government in the year ahead.
The report will identify broken markets and priorities for action. Government ministers and departments will be required to respond to any issues raised which fall within their responsibility within a strict three-month timetable.
This measure, which will be put on a statutory footing by the next Labour government, will ensure that for the first time the consumer will be at the table when priorities for action are decided.
The policy proposal builds on Labour’s plans to use properly regulated markets in energy and banking as a key weapon in the battle against the rip-off culture that has so damaged Britain’s economy.
Ed Miliband said:
“I am determined to lead Labour into the next election as a One Nation party of the consumer, small businesses, working and middle-class families who never thought they would be struggling with this cost-of-living crisis.
“There was a time when the Conservative Party stood for competition and consumers. But that time has gone. This generation of Conservative leaders has been entirely captured by powerful vested interests like the energy firms and the big banks.
“For too long families have been ripped off by the Bi g Six energy firms and young entrepreneurs have been starved of the investment they need by our uncompetitive banks.
“One Nation Labour will build a new economy based on open competition, not broken competition so we can earn our way out of the cost-of-living crisis. We will reset these markets by working with the best of British business and consumer groups.
“No longer will consumers have to shout from the outside. Under the next Labour government they will be given a direct say in the priorities for tackling abuses or concentrations of power which hold Britain back.”
The problem:
Currently decisions about whether markets are working in the interests of the British public are taken by politicians and regulators. And too often in recent years we have seen them drag their feet.
In the energy market
∙ OFGEM has failed to take action even where it identified problems. In 2008, it identified16 things that it thought needed to be improved for the market to work properly. In 2011 it admitted that 12 of these had got worse or stayed the same, but still took no real action.
∙ The Government has refused to back Labour’s plans to spur competition by separating out the Big 6 generation and supply businesses and forcing energy generators to sell their production into a common pool, out of which all retailers could buy.
In the banking market
∙ Mis-selling of interest rate swaps, has undermined 40,000 small businesses who should have been able to grow their way out of the cost-of-living crisis. It was only through the pressure of groups like Bully Banks that the regulator finally started to take action in 2012 and most of the businesses affected have still not received compensation.
∙ Report after report in recent years has highlighted that there is a serious lack of competition in our high street banking sector, from the Independent Banking Commission to the Parliamentary Commission. And the OFT even wrote to the Chancellor spelling out that the problem was not going to materially improve. Yet despite that consensus the Government have failed to act.
In the pub market
∙ In 2010, the BIS Select Committee highlighted an unfair and unbalanced relationship between the PubCos - the large branded pub chains that own the majority of pubs in the UK - who dominate the market and the small business owners who run pubs, and restrictive practices that prevent smaller breweries from accessing huge swathes of the trade.
The Select Committee concluded that self-regulation was no longer viable. The Government agreed there was a problem but have done nothing about it.
In all of these cases consumers were well aware of serious problems with markets not working competitively, and ordinary people and small businesses losing out as a result.
T he public have long known that the energy market was uncompetitive and unfair, with consumer groups leading the way by mobilising mass switching campaigns to get consumers a better deal. And small businesses have for years known that the five major banks weren’t serving their finance needs. It shouldn’t take national scandals to force regulators and politicians to act. And even today the Government and regulators refuse to implement the major reforms needed in each sector.
A new approach from One Nation Labour:
So the next Labour will take a new approach to driving up competition, as one of the long term changes we make to build an economy that can earn our way out of the cost of living crisis. Central to that new approach will be an invitation to the consumers of Britain into the decision-making processes. This will ensure that decisions about what the priorities for improving competition are always taken in the public interest and force p olicy makers to confront problems rather than simply leaving them to drag on.
The next Labour Government will introduce an Annual Competition Health Check, led jointly by consumers and the competition authorities, to ensure regulators and politicians act where markets do not work in the public interest. This will build on the Consumer Protection Partnership, but crucially include consumer organisations rather than simply statutory bodies like the CMA.
We will ask the consumer bodies including Which? and Citizens Advice to produce jointly with the Competition and Markets Authority and other statutory bodies an annual report that sets out both key competition issues in UK private markets and priorities for action. Some action will be for regulators, like the CMA, but some will be for Government. This will force the politicians to respond to the report, and to set out how they intend to tackle the issues raised.
This means the government will no longer be able to ignore problems such as the concentration in power in the energy, banking and community pub sectors.
Grassroots consumer activism is also crucial to driving fairer and more competitive markets. This measure sits alongside the Labour Party’s backing for the Big Switch campaign to get consumers a cheaper deal on their energy bills and wider work looking at measures to boost the role of consumers in encouraging competition on price and value in private markets.
Labour has already called for action to tackle the lack of competition in the energy and banking markets. And next Tuesday we will call a vote on the floor of the House of Commons on the need to introduce a statutory code to regulate the unbalanced relationship between the PubCos that own the majority of pubs in the UK and the small business owners that run pubs.
Ends For more information, please contact the Labour Party press office on 020 7783 1393.