Outlook: Rip off Britain

SURPRISE. ACCORDING to the latest issue of Which? magazine, Britain's top banks are offering uncompetitive rates on everything from personal loans to insurance and credit cards. Typically, all these products are more expensive when bought from one of the big banks than elsewhere.

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.

u

Arts and Entertainment
books
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
PROMOTED VIDEO
Life and Style
3D printed bump keys can access almost any lock
techSoftware needs photo of lock and not much more
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
News
Dr Alice Roberts in front of a
peopleAlice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
The Digicub app, for young fans
advertisingNSPCC 'extremely concerned'
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Day In a Page

The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution