Urgent action to tackle overcharging by mobile phone companies to the tune of £6bn – equivalent to £100 for every person in Britain – has been promised by Labour.
The planned moves against the mobile phone “rip-off” is the party’s latest initiative for turning the political spotlight on to the cost of living crisis as a way of countering Coalition’s focus on growing evidence of economic recovery.
Helen Goodman, the shadow Culture Minister, claimed households were paying massively over the odds for telecoms, including use of mobiles, landlines and broadband, because the government had failed to regulate the market.
She cited research by the organisation Bill Monitor which found almost three quarters of mobile phone subscribers were on unsuitable contracts, paying an extra £6bn between them to Britain’s four networks.
“The Government have totally failed to address this and so most people are spending £100 each year more than they need to,” Ms Goodman told the Independent.
“At a time when family budgets are under pressure this shows how out of touch and careless these ministers are.”
She said consumers were often confused about their mobile charges because of the complexity of tariffs and the refusal of companies to give clear details of their lowest prices.
“It is extremely difficult for people to manage their bills without proper information and the ability to make straightforward consumer choices,” she said.
Labour would make it far easier for mobile phone users to move between networks by scrapping the rule under which the losing provider is responsible for organising the switch.
It would give Ofcom extra teeth to force through the change, which Labour says would provide a major incentive for companies to publicise their cheapest deals.
Ms Goodman said Labour would also act to force companies to alert phone users when they are approaching the allowance limits of their contracts to stop consumers running up higher-than-expected bills.
The party would give the right to all customers to leave their mobile and broadband contracts without penalty if mid-contract price rises are imposed.
Ms Goodman also called for mobile phone users to receive paper bills without being charged for them. She said: “Without paper statements, customers become more likely to miss payments and less likely to have a handle on their finances.”
She urged quick action to scrap charges of up to 21p per minute most mobile customers face to ring 0800 numbers such as ChildLine and for a cap on the liability of consumers for bills run up on phones that are stolen or lost.
“For three years the Government have been promising reform in the telecoms sector. We are now on our third Secretary of State and still no action has been taken,” Ms Goodman said.
Speaking at the GMB union conference in Nottingham, the Labour leader Ed Miliband promised action on the “broken markets that have held our country back for so long now, driving prices too high, ripping people off”.
He said: “It starts with the energy companies. We've seen the problem this very week.
“The wholesale price goes up, your bills go up. The wholesale price comes down, your bills still go up.
“Not under a Labour Government - we will freeze gas and electricity bills until 2017 to stop them rising and we will give new powers to the regulator to cut prices too.”
He repeated his pledge to raise the minimum wage to bring it closer to average earnings if Labour wins next year’s general election.