Outlook: Rip off Britain
Thursday 02 September 1999
It is famously more common to get divorced than move bank; the Consumers' Association reckons the big high street names are taking advantage of this apparently misplaced loyalty to fleece their customers with poor value products to the tune of hundreds, and in some cases, thousands of pounds a year. This is just another example of "Rip-off Britain", Which? concludes.
New Labour has long believed that there is something structurally wrong with British business that over pricing like this should be allowed to persist over such large swathes of the economy. Along with the Press, it has embraced radical consumerism with evident abandon. But has it fully thought through the consequences of this approach?
Its appeal is obvious. In a world where it is no longer possible to be anti-business as such, consumerism allows left leaning politicians to continue to think that most business, and particularly big business, is theft unless properly controlled and regulated. This is very handy for those still struggling to make the transition to a society where business and the free market are meant to be admired, not denigrated. Business people are all well and good, but they are also on the make and will rip you off given the slightest chance, is the general message.
Fine. Unfortunately for the Government, radical consumerism cuts both ways and in a number of instances it contradicts what ministers are trying to do on other fronts. Take banking. The Government is concerned about "social exclusion" and wants the banks to subsidise elements of society which are excluded from the banking system, or as in the countryside, in danger of becoming so. At a time when the banks are being told by Which?, the Consumers' Association, the newspapers and government ministers alike to stop ripping off their customers and start competing with new low-cost operators, this seems about as likely as a month of Sundays.
In fact, the pressure of low cost competition is rather in the opposite direction. Some banks, for instance, have started charging rival banking customers for using their cash point machines, and their own customers for disloyalty in using somebody else's. Rather than being another instance of "rip-off Britain", as widely portrayed, this is in fact an attempt by banks to make the cost of money transfer explicit. This, in turn, strips out the implicit charge that came by way of cross subsidy from other products, which in turn allows those products to become more competitive with those offered by low-cost newcomers.
So the consequences of radical consumerism are often neither foreseen nor benign. Moreover, even the brave new world of price transparency and product choice promised by the Internet isn't going to stop business from targeting the better off and ignoring the poor. Indeed, the growth of e-commerce might make the poor relatively even worse off, since its benefits are open only to those with access to both knowledge and technology.
Don Cruickshank, the man charged by the Government with investigating whether the big banks are failing the wider economy, has rightly identified lack of competition in financial services as the main bug bear. He also rightly identifies Government imposed supervision and regulation as the biggest barrier to entry, a finding Gordon Brown, the Chancellor, cannot have had in mind when he commissioned Mr Cruickshank to undertake the probe. Consumerism as a policy approach requires rather more than popularist rhetoric about "Rip-off Britain". To work properly it also requires a radical free market agenda, and the stomach to live with its consequences. Nor can a free market economy be regulated into existence. Rather, it has to be deregulated into being.
- 1 Frank Lampard's face drops when Holly Willoughby introduces him as a 'Man City legend'
- 2 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 4 The Visit: Trailer for M Night Shyamalan's latest horror film is terrifying
- 5 9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Tories sack candidate who said she would never support 'the Jew' Ed Miliband
9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Stephen Hawking says he will vote Labour
Manny Pacquiao begs Indonesia president to spare life of drug smuggler Mary Jane Veloso about to be executed
Yazidi sex slaves undergoing surgery to 'restore virginity' after being raped by Isis militants
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
Andrew Lloyd Webber: Phantom of the Opera writer mocked after issuing a warning about Ed Miliband and Nicola Sturgeon
General election 2015: Labour will toughen hate crimes legislation surrounding Islamophobia
HSBC review into moving headquarters from UK 'underway'
iJobs Money & Business
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...
£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...