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

 

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Banishing safe seats, and other proposals to bridge the democratic divide

How to improve key areas of democracy.

Labour’s election train is finally pulling into the station, with its new leader announced in just over a fortnight. However, a summer absorbed in the party’s internal democracy has obscured a deeper truth confronting the country: the general election confirmed that unequal political participation rates in the UK – by age, class, ethnicity and region– have become increasingly hardwired into how our democracy operates.

IPPR’s new report underscores the scale of the democratic divide.  For example, less than half of 18-24 year olds voted, compared to nearly four-fifths of the over-65s, while three-quarters of "AB" individuals cast a ballot, against just over half of "DE" registered voters. Critically, this marks a sharp rise in turnout inequality over time. In 1987, for example, turnout rates by class were almost identical but have steadily diverged since.

Similarly, age-based differences have got significantly worse over time. In 1964 turnout for 18-24 year olds was 76.4 per cent, almost matching the 76.7 per cent turnout rate of those aged 65 or over. By 2005 only 38.2 per cent of 18-24 year olds voted against 74.3 per cent of 65+ year olds, with only a very slight improvement this year.

Underlying growing disparities of electoral voice are striking divergences in perceptions of the fairness and effectiveness of our democracy. For example, IPPR/YouGov polling suggests a striking 63 per cent of "DE" individuals think that our democratic system serves their interests badly, while "AB" voters are evenly split.

Given these signs of democratic distress, there remains a strong case for establishing a wide-ranging constitutional convention to reset how our democracy operates. Yet Westminster shows no appetite for such constitutional reformation, and there would only be so much a civil society-led convention could achieve in terms of practical change.

In our report we therefore propose a series of achievable reforms that could update the civic, institutional and technological architecture of our democracy in the here and now, with the explicit goal of ensuring that all voices are better heard in the political process.

On electoral reform, while we reiterate our support for proportional representation for national elections, we know this simply isn’t going to happen this Parliament. We had a referendum on change in 2011 and it was heavily lost. The energies of electoral reformers should therefore focus on extending PR in local government, where it is more obviously in the self-interest of the major parties, as a means of extending their geographical reach.

In addition, the reduction in the number of MPs provides an opportunity to chip away at the number of safe seats. More than half of seats are "safe", a number that has grown over time, even allowing for the electoral earthquake in Scotland. Safe seats typically have lower levels of participation, lower turnout rates, and less electorally powerful voters. While safe seats will always be with us in a first-past-the-post system, too many can be damaging to democracy.

Given this, we have recommended that the various Boundary Commissions of the UK be given a new duty to consider the electoral competitiveness of seats – ie. to tilt against the creation of safe seats – when boundaries are redrawn. The priority would be to meet their current duties of ensuring the geographic coherence of a seat and roughly equal electorates.

However, where these duties can be met we suggest that the Commissions should consider revising boundaries to reduce the number of safe seats, as a step to increasing participation and the voting power of the average elector. Of course, this will clearly not "abolish" all safe seats – nor should it  but it could help re-empower millions of voters currently with little meaningful say over the outcome of elections and force political parties to up their game in safe seats.

At the same time, the transition to the individual electoral registration process risks excluding millions from the franchise, people who are disproportionately younger, poorer or from an ethnic minority. For example, there are clear inequalities by age and ethnicity in terms of who is registered to vote: in the 2010 general election, for which figures are most accurate, 90 per cent of people aged 55-64 were registered, compared to 55 per cent of those aged 18-24, while nearly 20 per cent of BME individuals were not registered to vote, compared to only 7 per cent of the "white British" population.

There are simple steps the government could take to ensure all who are eligible are able to vote: extending the registration deadline to December 2016, and making support available to local authorities to assist registration efforts, weighted towards authorities with higher levels of under-registration, could help reduce inequalities.  In the longer term, electoral registration officers should be given new duties, and the Electoral Commission more powers, to drive up registration rates, with a particular focus on presently under-registered demographics. 

Finally, we recommend introducing a Democracy Commission. At present, the Electoral Commission effectively regulates elections and party funding. Democracy, however, is far richer and broader than electoral processes. It is about formal representation, but also about participation and deliberation, in what Marc Stears has called "everyday democracy".

A statutorily independent Democracy Commission could give institutional ballast to the latter and help reinvigorate democratic life by providing research, resources and capacity-building to facilitate local, civil society-led initiatives that aim to increase broad-based levels of powerful democratic participation or deliberation in collective decision-making processes.

For example, a Democracy Commission could work with the GLA to introduce participatory budgeting in London, assist the Greater Manchester Combined Authority in instituting a public deliberative body with real teeth over how to integrate health and social care in the area, help the Scottish government conduct citizens’ juries on the future constitutional shape of the country, or support civil-society experiments to bring people closer to collective political decision-making processes in their locality.

We are living in a paradoxical political era, where growing political inequality is accompanied by ongoing social and technological change that has the capacity to collapse unnecessary political and economic hierarchies and build a more inclusive, participatory and responsive democracy. However, there is no guarantee that the age of the network will necessarily lead to democratic revival. The institutions and technologies of our political system, products of the 19th century, are struggling in the fluidity and fracture of the 21st century, inhibiting democratic renewal.

With our economy post-industrial, our ways of communicating increasingly digital and more networked, our identities and relationships ever more variegated and complex, it is therefore critical public policy seeks to update the democratic infrastructure of the UK, and, in so doing, help reverse entrenched political inequality.

Such an agenda is vital. If we simply accept the current institutional arrangements of our political system as the limits of our ambition, we must also content ourselves to live in a divided – and therefore inherently partial – democracy. Yet our democracy is not immutable but malleable, and capable of being reformed for the better; reform today can make democratic life more equal. After all, the story of British democracy’s evolution is one of yesterday’s impossible becoming today’s ordinary.

Mathew Lawrence is a research fellow at IPPR and the co-author of "The Democracy Commission: Reforming democracy to combat political inequality". He tweets at @dantonshead.