How the coalition is failing to stand up for consumers

The government has consistently resisted measures which would tackle the living standards crisis.

Last month, David Cameron tweeted that "we are on the right track - building an economy for hardworking people". But people across the UK won’t feel that at all – they only thing they can feel is their pockets being hit. Average earnings are £1,477 a year lower than they were at the time of the last general election. This means that, in real terms, workers are on average earning today the same as they were in 2001.

And the promises were so big. Before the 2010 general election, the Tories said: "We want to see an economy where not just our standard of living, but everyone’s quality of life, rises steadily and sustainably."

It has done anything but. Working families are worse off with energy bills having risen by £300, while the profits of the energy companies have soared. It is yet another year of inflation-busting fare rises will just add to the pressure on household budgets. Instead of standing up for hard-pressed commuters, this government is siding with the private train companies and helping them to increase their profits at the expense of passengers.

Consumers are a key driver of the economy, creating the demand for goods and services which provide jobs, stimulate innovation, create wealth and tax take. In a functioning economy, knowledgeable, informed and empowered consumers can drive up standards, supply and value for money as well.

In government, Labour recognised this and strived to be the party of consumers for the benefit of the economy. We built consumer interests into regulation, supported Trading Standards and created Consumer Focus which was respected by all stakeholders. We got a fairer deal for purchasers of energy and other basic necessities, and ensured an ever increasing standard of living - something this government has failed to emulate, as prices rise higher than incomes.

So what are ministers doing for consumers? Despite the rhetoric, the government’s recently published Draft Consumer Rights Bill, is little more than window dressing. Whilst steps to cover areas such digital downloads are welcome, reflecting arguments which we have been making on the need for protections for consumers in new markets, the Bill is a huge missed opportunity to help hard-pressed consumers by ensuring a fair deal on energy prices, tackling high rail fares and challenging the cost of living crisis engulfing Britain.

On top of this, ministers are ignoring the other pieces of the jigsaw such as enforcement, advice and funding. Their changes to consumer protection since 2010 have been muddled and have created uncertainty and confusion: They’ve abolished Consumer Focus and then set-up a new body – Consumer Futures – to do the same job. This is alongside a slashing of funding to local authorities which has significantly impacted Trading Standards, making it harder for consumers to uphold their rights and seek redress. Aggregate trading standards funding has dropped from £245m to £142m since 2010, with hundreds of jobs being lost estimated to amount to around 15% of the total workforce upholding and enforcing consumer rights. And through the Bill, the government now want to remove the ability of Trading Standards officers to make inspections unannounced. In response, the Trading Standards Institute has said it "would urge the government to refrain from removing the power of trading standards officers to enter premises unannounced. It is an essential tool for them to use and it is vital that when complaints are made, councils can investigate and tackle the problem immediately."

Ministers’ rejection of our calls for better standards in the private rented housing sector and their refusal to adopt a Code of Conduct for the banking and insurance industry reflect how they are standing up for the wrong people and their lack of concern for helping hard-pressed families. Similarly, the limited collective redress measures proposed in the Bill fall short of what groups of consumers across the UK need to obtain effective consumer redress when they have been wronged.

Simply, this government has resisted measures which would tackle the real living standards crisis which people are facing.

However, Labour is clear – if in government we would be taking action to implement a One Nation programme to boost people’s living standards. We need a tough new energy watchdog to force suppliers to pass price cuts onto consumers, and to ensure the over-75s automatically get the cheapest tariff.

Likewise, we’ve seen rail fares up 9% a year, after the government allowed train operators to increase some fares by up 5% above the supposed ‘cap’. We would be put passengers first by banning train companies from increasing fares above the cap set by ministers so that fares would be rising by no more than 1 per cent above inflation under Labour in each year of this parliament

And we are already examining plans to bolster collective action, empowering consumers so they can club together more easily to seek redress, as part of our policy review, led by consumer champion Ed Mayo last year. During the passage of the Bill, we will be pressing ministers for a strong, accessible collective redress mechanism, one which mirrors the Portuguese and Australian models that remove the legal excesses and is not a US-style class action, where litigation is dominant.

We know that David Cameron and his government won’t stand up for consumers. It’s time for him to wake up and adopt Labour’s plan to help working people – not keep filling the pockets of those at the top that exacerbates the cost of living crisis.

David Cameron speaks during a press conference at the end of the G20 Leaders' Summit on September 6, 2013 in St. Petersburg, Russia. Photograph: Getty Images.

Ian Murray is shadow minister for employment relations, consumer and postal affairs, and Labour MP for Edinburgh South

 

Photo: Getty
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.