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

News
news

Emergency call 'started off dumb, but got pretty serious'

News
people

Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'

News
Russell Brand was in typically combative form during his promotional interview with Newsnight's Evan Davis
people

Thought you'd seen it all after the Jeremy Paxman interview?

Arts and Entertainment
On The Apprentice, “serious” left the room many moons ago and yet still we watch
tv

Greatest mystery about the hit BBC1 show is how it continues to be made at all, writes Grace Dent

PROMOTED VIDEO
Voices
Funds raised from the sale of poppies help the members of the armed forces with financial difficulties
voicesLindsey German: The best way of protecting soldiers is to stop sending them into conflicts
Arts and Entertainment
A scene from David Ayer's 'Fury'
film

"History is violent," says the US Army tank commander Don "Wardaddy" Collier

Arts and Entertainment
Liam and Zayn of One Direction play with a chimpanzee on the set of their new video for 'Steal My Girl'
music

Animal welfare charities have urged the boy band to cut the scenes

News
The Edge and his wife, Morleigh Steinberg, at the Academy Awards in 2014
peopleGuitarist faces protests over plan to build mansions in Malibu
News
peopleFox presenter gives her less than favourable view of women in politics
Property
One bedroom terraced house for sale, Richmond Avenue, Islington, London N1. On with Winkworths for £275,000.
property
Sport
Erik Lamela celebrates his goal
football

Argentinian scored 'rabona' wonder goal for Tottenham in Europa League – see it here

Voices
Nigel Farage has backed DJ Mike Read's new Ukip song
voicesNigel Farage: Where is the Left’s outrage over the sexual abuse of girls in the North of England?
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
News
Mario Balotelli has been accused of 'threateningly' telling a woman to stop photographing his Ferrari
peoplePolice investigate claim Balotelli acted 'threateningly' towards a woman photographing his Ferrari
Arts and Entertainment
Paul Anderson plays Arthur Shelby in Peaky Blinders series two
tvReview: Arthur Shelby Jr seems to be losing his mind as his younger brother lets him run riot in London
Voices
Don’t try this at home: DIY has now fallen out of favour
voicesNick Harding, who never did know his awl from his elbow, is glad to see the back of it
Arts and Entertainment
Miranda Hart has called time on her award-winning BBC sitcom, Miranda
tv
Sport
Phil Jones (left) attempts to stop the progress of West Bromwich Albion’s James Morrison on Monday
Chelsea test can be the making of Jones and Rojo, writes Paul Scholes
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

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

CTO / Chief Technology Officer

£100 - 125k: Guru Careers: A CTO / Chief Technology Officer is needed to join ...

COO / Chief Operating Officer

Competitive (DOE): Guru Careers: A COO / Chief Operating Officer is needed to ...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker