Friday, 10 May 2013
Sharp practice has got out of hand The Tories must give a voice to the embattled consumer Laura Sandys MP Opinion Piece in The Times
Horsemeat in burgers, dodgy supermarket promotions, Equitable Life, product shrinkage, doorstep mis-selling, PPI. . . the list of consumer scandals seems to grow and grow. Big business has some way to fall before it earns the reputation that politicians or bankers enjoy but that is no excuse for letting them take consumers for a ride.
While most large companies offer an honest service or decent products at reasonable prices, there are some unacceptable practices being perpetrated against consumers every day. One particular favourite of some retailers or food manufacturers is the incredible shrinking portion. The packaging misleadingly stays the same shape and size but the contents are dramatically reduced. That explains how that £1 cottage pie can stay the same price despite commodity prices rocketing. According to an investigation last month by The Grocer one chain of bakers had shrunk its bacon rolls by 18 per cent and its pasties by 5 per cent. One retail analyst has explained that shrinkage has become a “common tool”.
Another customer-unfriendly trick is “yo-yo pricing”. A product is sold in a few supermarket branches for a limited period at a deliberately inflated price, then as part of a “promotion” it is sold at a “discount” across all of its stores. This is the normal selling price yet the customer is manipulated into thinking they have a bargain. One chain has been accused of raising and lowering prices so much that it was impossible to even establish what its baseline prices were. Others have had their “value” promises investigated by the Advertising Standards Authority.
Cheap products are sometimes the most expensive in the long term. For instance, a lot of my constituents have been complaining about “giveaway” TVs, half the price of the others. The catch? They are invisible energy guzzlers yet there is no “health warning” to ensure that the consumer knows that the resulting energy bills will quickly eat away any saving.
As well as cheap tricks, there are also more structural problems — in some markets, such as electricity and gas, consumers do not have enough accurate and useful information about the products they are buying. In other markets, such as financial services, it’s simply too difficult or complicated for consumers to get redress when something goes wrong.
Coalition ministers have introduced greater transparency, competition and accountability into the public services; now they must do the same in the private sector. The aim must be to ensure we are as much the champion of the consumer in the high street as of the patient in the NHS or the parent choosing a school.
Too much of current consumer law is “last resort” — helping customers when markets fail. We need to turn the consumer from victim to active participant, making, shaping and even breaking markets and preventing consumer rip-offs.
The current “marketplace” is certainly not of the kind that Adam Smith would approve of. Over the past 15 years, large companies have become mega companies and consumer choice has suffered. Too big to fail does not only refer to the banking sector. In 1997 there were 16 energy companies; by 2010 there were six. There were over a dozen large supermarket chains in 1997 but now the market is dominated by the big four of Tesco, Asda, Sainsbury’s and Morrison’s. That shows we need a much more robust competition policy.
Whitehall needs a consumer make-over with a minister responsible for consumers working across all departments, which tend to be too close to vested interests. The consumer voice isn’t heard often enough when policy is formulated. Similarly, the regulators are too often staffed by industry insiders who don’t naturally see things from the consumer’s perspective.
At a more basic level, we need retailers and utility companies to be better at giving information, free from deceit, distortions and obscurity, that customers can readily understand and use to compare rival products. Do you know what a KWh is? If you don’t you will struggle to make any sense of your electricity bill, yet most utility companies don’t try to make it easy for their customers. And the way food retailers label the contents of their products is sometimes only understandable with a food can require a food science degree.
While it is not the Government’s job to decide what people should and shouldn’t want it is a central responsibility of lawmakers to ensure that the markets are truthful and protect consumers. That’s why much larger public fines should be issued when companies have failed to be straight with their customers.
If the consumer isn't championed by Conservatives then Labour will fill the gap and they will introduce a system of protections that is too bureaucratic and burdensome. As Conservatives are friends of the true market economy it is now the party’s role to ensure that the consumer, rather than the producer, is king.