The harsher penalties and new rules will be outlined in a consumer protection White Paper to be published by Stephen Byers, the Trade and Industry Secretary, within the next fortnight.
The Government's determination to protect consumers will be reinforced today by Gordon Brown, the Chancellor, who will promise "tough action" to bring down prices. He will tell a conference at the DTI that competition offers "the best prospect of a better deal" for people with regard to essentials such as gas, water and electricity. "It is wholly unacceptable... that some consumer goods cost twice as much in Britain as in America," Mr Brown will add.
He will pledge that the Government will remove barriers to competition wherever they exist, rooting out cartels and restrictive practices.
Existing consumer protection laws, which are regarded by ministers as too restrictive to have any real effect onrogue traders who persistently flout the law, are to be swept away and replaced by a fast-track system. Local authorities trading standards officers will be empowered for the first time to intervene and stop anti-competitive trading by companies, pending an appeal.
This move will reverse the existing procedures whereby complaints against traders have to be exhaustively investigated before any action can be taken. Ministers have decided that faster remedies are needed. "Some companies are going out of business before we can act. We need to speed up the whole system," said a ministerial source.
Traders falling foul of the new rules allowing the intervention, could be prevented from continuing their business, if their activities threaten to harm customers by putting other traders at risk.
Examples mentioned by ministers include privatised bus companies that cream off the best custom from some bus routes to put rivals out of business. Under the new rules, local authorities would be able to prevent the offending bus companies from running services on the routes.
n Lord Trotman, the former chairman and chief executive officer of the car giant, Ford, will today be appointed the Chancellor's "troubleshooter" for small businesses. He will draw up new proposals to foster the growth of small companies.