UK consumer protection must be 'at the heart' of Brexit deal

As the Prime Minister reaches 100 days in office, we’ve seen some early signals that Theresa May is looking to assert herself as a consumer champion.

On the steps of Downing Street she pledged to tackle vested corporate interests and in her party conference speech she said her Government would be ‘prepared to intervene’ in markets that aren’t working for customers.

While that type of rhetoric is certainly encouraging, often words don't turn into action.

However we have had a positive start. We've already seen moves to improve compensation arrangements in rail, with the announcement of a scheme which will see passengers able to claim when trains are more than 15 minutes late, rather than the current 30 minutes, and mobile companies have also agreed to scrap fees for unlocking handsets following pressure from the Government.   

Now we need a comprehensive consumer strategy - a plan that promotes competition and protects consumers where they are at risk.  At the moment, several markets - from banking to telecoms, energy and rail - simply aren’t working for customers and need to be addressed as a priority.

Take energy - as the PM herself recognised in her conference speech, two thirds of people are sitting on the big energy suppliers expensive tariffs. But after a two year competition inquiry, now is not the time to announce new legislation or regulations.

The big challenge at this stage is to get more people to engage with the market - and the energy companies must demonstrate that they are going the extra mile to help their customers.

They also need to prove that they can compete – not only on price but on providing a better service, in a market where people feel there’s nothing to choose between. If suppliers cannot do this then they will be in no position to oppose further intervention. We want to put this industry on notice that they are drinking in the last chance saloon.

In its strategy the Government should also identify other big problems that affect our everyday lives and set out where targeted interventions are needed.

For instance, access to reliable, high-speed broadband is essential for people to participate in the wider economy, and Britain cannot duck the importance of creating and maintaining a modern communications network.

So the Government must continue to ensure that we invest in new infrastructure to improve reliability and access, with people being automatically compensated for service failures. It’s also clear that the level of service people receive through Openreach must improve.

In banking, the cost of unarranged overdraft fees has not been addressed. Our research has shown that these can be much, much higher than the cost of a payday loan - hitting some of the most vulnerable people the hardest.

While we have seen a cap on pay day loan charges, the competition authorities failed to address unarranged overdraft fees - which the banks made £1.2bn from in 2014 - as part of their banking inquiry. Our view is that a consumer strategy should require the financial regulator to review these sneaky fees as soon as possible.

If we’re going to see an end to the mis-selling scandals and poor customer service that have blighted many industries over the past 10 years, and if we are to move to more competitive markets that deliver good outcomes for consumers, then corporate culture must be overhauled.

There is no better example of this than in the rail industry, where the too cosy relationship between the regulator and train companies seems to put the passenger interest last.

At the moment, too many people are enduring miserable train journeys and cancellations, or finding it difficult to get the best fare for their journey, so the Government should press ahead with action to improve fares and ticketing.

A new independent, mandatory ombudsman is also needed to resolve passenger complaints. The duties of rail regulator must change so that protecting the interest of the consumer comes first and the regulator takes on train companies that continually let their passengers down.

A consumer strategy will not be restricted to domestic issues, of course. As the Government prepares to embark on negotiations to leave the EU, ensuring that consumers get a good outcome from Brexit is one of the biggest long-term challenges that the Prime Minister faces.

So this strategy must also ensure that consumers are put right at the heart of those negotiations.

There are good consumer protections that our membership of the EU has brought over the years. Whether shopping abroad or getting compensation when our flights are delayed, people will want to see many of these rights maintained.

But Brexit also presents a massive opportunity. British businesses have long complained about Brussels-based regulations – and of course poor regulation ultimately leads to more costs being placed on consumers, and can stifle innovation that could lead to better services and allow good businesses to flourish.

This will mean both safeguarding the most important consumer rights currently enshrined in European law and also being brave enough to remove Brussels regulations that are not in the best interests of consumers.

And that’s what the consumer strategy should be all about: putting people first.

It needs to be an approach that drives effective action by regulators and businesses across all sectors, and one that ensures that where Ministers intervene they properly consider the consequences for consumers.

The Prime Minister's plans for consumers on boards is a perfect opportunity to test this out in practice, and should be just the start of a much bigger exercise to get businesses listening to their customers.

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