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Protecting the consumer: what will our rights look like post-Brexit?

Brexit raises questions around British consumer rights, but how can protections be maintained and strengthened? 

Since taking office last year, the Prime Minister has frequently argued that in a well-functioning market consumer rights are acknowledged and protected. She pledged to make this protection work for “ordinary working families”, and in her recent Florence speech she referred to the importance of “strong consumer rights” in the Brexit negotiations. But what will this look like in practice and how do we deliver on this ambition?

An ombudsman is an important element of the structures that provide consumer protection. We’re there to resolve complaints where something has gone wrong, to investigate when necessary and to ask for redress where appropriate. Ombudsman Services covers complaints about the energy, communications and property sectors. We have a key role to play post-Brexit.

While the approach to redress in many of these sectors originates from and is encouraged by Brussels, the right to independent redress in these regulated sectors, as well as finance, is now enshrined in UK legislation. Providers must engage and decisions are legally binding. It is a well-established part of the consumer and business landscape and is unlikely to be removed when we leave the European Union.

There are, however, other aspects of the redress system that are less certain post-Brexit. As part of the Brexit process much, if not all, of the EU acquis will be reviewed.  This gives an opportunity to look again at the redress landscape.

A mechanism will need to be established to resolve cross-border disputes post-Brexit. The development of the Online Dispute Resolution (ODR) system provides certainty for consumers when buying goods and services online from other European countries. As we leave the EU, it is important to understand how consumers can still maintain this confidence.

The EU Directive on Alternative Dispute Resolution (ADR), which came into effect in 2015, requires that where a contract exists for the supply of goods and services providers must signpost consumers to redress. In principle this is a welcome opportunity for both consumers and businesses and covers both domestic and cross-border disputes. However, in the way that it has been implemented in the UK, providers are only required to signpost towards redress. They do not have to actively participate in the process. This causes huge frustration for consumers and undermines trust in the marketplace.

There is also a danger that the ADR Directive could weaken existing mandatory ombudsman provision.  Implementation in the UK means that, uniquely in Europe, there can be several competing ADR schemes in a sector.  An ombudsman is required to provide more than just dispute resolution; typically an enquiries function for consumers, advice to providers, management information to key stakeholders, a focus not just on individual complaints but on reducing consumer detriment overall.  An ombudsman looks not only at the contract, but also at whether the customer has been treated fairly. As the Directive sets minimum ADR requirements, there is a risk that consumer protection and redress will be diminished to that low standard.

In all regulated sectors, we should be aspiring to deliver a single mandatory ombudsman. Where there is no regulation in a sector we need to be imaginative in how we encourage maximum participation in the redress process by both consumers and businesses. The Government’s forthcoming Consumers and Markets Green Paper will be a perfect starting point.

We must also keep up with developments within the EU that have an effect on consumers and markets or risk seeing the British consumer disadvantaged. For example, the recently introduced Clean Energy Package sets out measures on protecting vulnerable consumers and supporting consumers as producers of energy. Similarly, the Digital Single Market will have huge implications for consumers, perhaps most obviously in the area of data roaming. While the UK will be able to take control of these policy areas itself, we do need to think carefully about the consequences of not being part of the dialogue, and the need to be open to learning from and adopting improvements offered within the EU.

Consumer protection is a key component in building confidence and ensuring markets work effectively for consumers.  We have industrial strategies and business strategies, but industries and businesses are built on customers. It is time we had an equivalent strategy for consumers.

As industry innovations and consumer expectations continue to evolve, it is important that the UK looks at how we can strengthen protection further. If we simply maintain our current position, we will quickly fall behind globally. As the UK explores future trade relationships with the rest of the world, this is our chance to demonstrate the value of consumer protection and the ombudsman model. The concept of an ombudsman may have ancient Viking roots, but its practice of restorative justice and continuous improvement make it an excellent model for solving disputes, helping build trust and contributing to a well-functioning economy. This is our chance to be a world leader.

 

Lewis Shand Smith is the Chief Ombudsman at Ombudsman Services. 

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Thatcher’s long shadow: has the “miserablist” left exaggerated her legacy?

A new book argues that Britain is far from the “neoliberal nightmare” decried by Corbynites.

In the archives of Newsweek magazine is a 2,000-word article credited to Margaret Thatcher, published in April 1992, and headlined “Don’t undo my work”. It is an amazing thing: a vulgar rendering of the basic argument of Francis Fukuyama’s The End of History and the Last Man, mixed with the pain of a once-powerful politician who now had precious little to do with her time, and outrage at the European Union’s Treaty of Maastricht. “I set out to destroy socialism because I felt it was at odds with the character of the people,” she wrote. “We were the first country in the world to roll back the frontiers of socialism, then roll forward the frontiers of freedom. We reclaimed our heritage.” In its final flourish, she refers to herself in the third person: “Thatcherism will live. It will live long after Thatcher has died, because we had the courage to restore the great principles and put them into practice, in keeping with the character of the people and the place of this country in the world.”

Up – or down – in the hereafter, what must she make of the strange point reached by the country she once ruled? Britain’s exit from the EU is an essentially Thatcherite project, which may yet result in the kind of laissez-faire dystopia she and her followers always wanted. But at the same time, we have seen something they thought they had ruled out for ever: the revival of an unapologetically socialist Labour Party, which is seemingly backed by a convincing majority of people under 40, and is possibly on the verge of taking power. Meanwhile, no end of wider developments – from the crises of such outsourcing giants as Carillion and Capita to mounting public unease about corporate tax avoidance – suggest that a sea-change is coming. Perhaps, in the midst of Brexit’s mess, we might be starting to wake up from what some people see as the 40-year nightmare of neoliberalism.

But what if Britain was never that neo-liberal, and there was not much of a nightmare in the first place? This is the argument attempted by Andrew Hindmoor, a professor of politics at Sheffield University. He wants to discredit an oft-told story: that “Margaret Thatcher’s election in 1979 marked the start of a still-continuing fall from political grace”, manifested in “dizzying levels of inequality, social decay [and]  rampant individualism”, and the surrender to free-market ideology of the Blair-Brown governments.

His contention is that “neoliberalism has had a surprisingly limited impact on our collective understandings of the world around us” – and that the realities of inequality, privatisation, and the shrinking of the state have not turned out to be as awful as some people think. He wants to nudge Corbynite readers away from the idea that the New Labour era represented a long period of political drought. Britain, in his reading, has obvious problems but is hardly the scene of a disaster – and the people he maligns as left-wing “miserablists” ought to recognise it.

At a time when polarised argument on social media has obscured the fact that politics is usually cast in shades of grey, his nuanced case ought to be welcome. Indeed, as a trigger for thinking deeply about what has happened in and to this country – particularly since the mid-1990s – the book just about does its job. Part of its argument is based on a familiar script, and a list of (mostly) undeniable New Labour achievements: “significant public expenditure increases, the introduction of tax credits, a minimum wage, devolution, and freedom of information”.

Hindmoor also eloquently sets out evidence that public opinion, in so far as it is measured by pollsters and academic researchers, is now more socially liberal than it has ever been, and also full of the kind of left-of-centre thinking (redistribution of wealth, nationalised utilities) that Thatcher thought she had expunged. From time to time, all this skirts close to the blindingly obvious, but it’s at least built on solid facts about the country’s recent history. Hindmoor’s problem comes when he pushes his arguments into much more contentious areas, and everything threatens to unravel.

Whether his points are always sincere or sometimes part of an academic thought experiment is unclear. Among his other arguments, he underplays the severity of post-2010 austerity by citing both slight increases in real terms in overall public spending, and the Conservatives’ failure to convincingly cut the deficit. But neither detracts from millions of people’s experience of cuts, whether through the NHS crisis or the savaging of services provided by local councils – something he half-acknowledges before dropping a real clanger. “The costs of austerity have not been loaded on to the poorest and most vulnerable,” he writes, which is most of the way to being absurd.

Elsewhere, Hindmoor claims that in education policy, “academisation [sic] is not a form of privatisation”, on the basis that schools run by independent trusts are funded by government and subject to Ofsted inspections. He apparently refuses to entertain the idea that if schools are snatched away from elected local authorities and put in the unaccountable hands of often questionable organisations (some of which are now in grave financial difficulties), something significant has happened. In an equally flimsy treatment of the health service, he says that there should be an argument “whether the contracting out of NHS services to private companies is… tantamount to privatisation”, which is some logical somersault to attempt. And he has almost nothing to say about what has happened to the benefits system, in which a once collectivist, benign set of institutions and arrangements has been replaced by a machine that represents individualism – or, if you prefer, neoliberalism – at its nastiest.

A section about inequality is stuffed with graphs and desiccated numbers that ought to strengthen his case, but end up adding to its weakness. “The UK is a country in which a significant redistribution of income still occurs,” Hindmoor says, which is true, but still leaves open the question of whether “significant” equates to “enough”. His evidence for an upbeat verdict largely rests on a rather laboured concept – also used by the Office for National Statistics – which includes basic public services in its definition of “final income”. The problem there is that you end up trying to make a positive case for the state of the country based on the continuing availability of free roads, schools and hospitals, which strikes me as an argument built on somewhat lowly aspirations.

His reliance on macroeconomic statistics, moreover, cuts him adrift from reality. Inequality is not just about numbers but people’s sense of opportunity, having a stake in the future and connection to the rest of the country. In the end, even Hindmoor does not seem convinced. “Inequality did rise significantly in the 1980s,” he writes. “Wealth inequality is growing. Social mobility is poor.” The abiding impression is of someone needlessly tying themselves in knots.

Does believing that Britain has been repeatedly pushed in the wrong direction over the last three decades make you a “miserablist”? Not at all. Like many others I think Thatcherism wrought damage that has never been healed, and that New Labour swallowed far too much of its legacy and set precedents for subsequent Conservative politicians. The invasion of Iraq was probably the single biggest policy disaster in post-war history, and compared to the hallowed Labour government of 1945-51, the Blair administrations’ institutional legacy – beyond Sure Start centres, which are now being closed at speed – was pitiful. At the same time, I well know that Blair and his colleagues improved the country in lots of ways, and it would perhaps be nice to go back to the halcyon period of 1997-2003. But that is now impossible, thanks to a range of watershed developments that point to the need for something very different.

Hindmoor’s text only briefly touches on them, but in case anyone hasn’t noticed: wages have been stagnating for more than a decade, near-zero interest rates have not triggered any surge in investment, unsecured private debt is at its highest level since the 2008 crash, and the idea that profit-making corporations are the answer to the modernisation of the state looks increasingly threadbare. Put another way, an era that began in the early 1980s may well be in its death throes, a realisation etched on to the upbeat faces of the people who now crowd into Jeremy Corbyn rallies, and rarely look like “miserablists”.

For many reasons, their politics is not really my thing, but I can see why their movement fits its time, in a way that this book’s glossing-over of deep political and economic failures does not. Its author should maybe bear in mind the closing lines of Thatcher’s Newsweek piece: “You always have people who take the soft option. The apparently easy way out is the way that gets you into deepest trouble. The lesson is, you don’t soften fundamental principles. You positively push them forward into the future.” 

John Harris writes for the Guardian

What’s Left Now? The History and Future of Social Democracy
Andrew Hindmoor
Oxford University Press, 285pp, £20

This article first appeared in the 15 February 2018 issue of the New Statesman, The polite extremist