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Vince Cable: ‘Getting the fair deal you deserve’

In his second guest post for our site, Business Secretary Vince Cable reviews how the Government is tackling regulation to improve the rail networks, the energy market and shopping at your local supermarket…

The Government has made some important changes to the competition regime and the consumer landscape over the last year. Together with the Consumer Rights Bill, which is currently before Parliament, we are working to build consumer confidence by making sure that consumers know their rights, and that businesses are clear about what is expected of them. Clarity and fairness sit at the very heart of our approach.

One result is the new Competition and Markets Authority (CMA) which started in full a month ago today. The CMA has enhanced powers, faster decision making processes, and will be able to work better with sectoral regulations to revitalise competition in markets and deliver greater benefits for consumers.

Building consumer confidence

Consumers are not really interested in the detail of competition law or regulatory processes. What matters most to them are lower bills, good customer service and having their complaints dealt with quickly and efficiently. That is why we are tackling these important issues.

Gas and electricity prices are good examples of problems caused by consumer confusion – consumers are faced with more than 350 tariffs and mind boggling bills. There is plenty going on in this area. The joint CMA and Ofgem review into the state of competition in the energy market has identified five areas that need to be looked at. This includes the rising profits for the Big Six that don’t appear to be based on greater efficiency and what barriers there are to market entry and expansion for new companies. This would not have happened without the new collaborative approach that we have been championing.

Ofgem is now consulting on whether it refers these issues to the CMA for a full market investigation.

Reducing regulated rail fair rises

As well as stimulating competition we are also helping consumers in other key areas such as winter fuel payments, rail fares and the relationship between supermarkets and their suppliers.

In addition, we have pledged over £16bn for the rail industry to improve capacity and the quality of the network. As a regular train commuter from my home in Twickenham I am well aware of the frustration about the continued rise in fares and the impact on family budgets. That is why for 2014 we have reduced regulated fair rises to RPI.

Finally, we have introduced the Groceries Supply Code of Practice which is overseen by an adjudicator – Christine Tacon. Her role is to arbitrate in disputes between the 10 largest supermarket chains and their suppliers. She will also have the power to impose fines and to name and shame supermarkets that breach the code.

Together these steps are going to make a real difference for consumers and make sure they are getting the fair deal they deserve.

Which? Conversation provides guest spots to external contributors. This is from Vince Cable, Secretary of State for Business, Innovation and Skills – all opinions expressed here are Vince’s own, not necessarily those of Which?.

Comments
Member

What’s being done to get supermarkets to display unit prices on promotions, the legislation I can find online all seems to leave it up the supermarket to decide on whether they should display a unit price.

Surely they should NOT be given a choice.

Member

As Vince has said – and we all know – energy pricing is confusing and often consumers stay with the same supplier even if better deals are available.

Please can we have simple unit pricing like we have for petrol, so that it is easy to compare prices.

Member

Simple unit pricing for gas and electricity would introduce simple competition between the energy suppliers-it is as simple as that. The energy companies know this and they don’t want it to happen so legislation is needed to make it happen. This issue is likely be important at the next general election.

Member
Marg says:
8 May 2014

I switched energy company from British Gas to Npower after consulting 4 compare sites.
Npower came top on all sites. I phoned Npower and they assured me that my energy bill would remain fixed through until August 2014. At the end of 2013 they announced price rises which I assumed would not affect me. Wrong! I received a letter saying the cost of my energy will rise. I phoned the company asking what was going on as I had joined them with a fixed deal. They informed me it wasn’t fixed but the increase in price would still be below their standard unit price and doubted that I was told my deal was fixed. I demanded that a copy of the telephone conversation was found. Npower came back to me to say they were very sorry that the phone conversation had been deleted but they would offer a £100 for my distress.

I am still with Npower as I cannot see any point in switching when these people pull stunts like I have described. Hearing MP’s and the like blaming the electorate for not switching energy suppliers is at best a JOKE and at worst they are in bed with the suppliers

Member

And returning to supermarket bashing.

BOGOFs and other forms of multi-buys should be banned and replaced with single item discounts. So a BOGOF simply becomes 50% off. I’ll leave you to do the maths on the myriad of other forms of multi-buys.

I’d also like to see that if you order items online at one price then that’s the price you pay when the item is delivered, and not the current in-store price when the order was packaged. Unless they show you at the time you order what the price will be.

And where the online price is specific to online shopping ( I know ASDA do this on some items), they should be forced to state that online. So you don’t see a price, think oh I’m going passed an ASDA I’ll buy it there to save shipping charges and 20 mins later you ask an assistant is this the correct price ? As this isn’t the price online, well that would be a special online only price, grrrrrrr

Member

“£16bn spending on the railway industry to improve capacity and quality of the network.”

Sam’s report clearly demonstrates some of the dire conditions that commuters are facing on a daily basis. I hope that amount will not be used by throwing good money after bad on old outdated rolling stock, propping up an already outdated system.

Question:
Where can you find a system where average delays equal 36 seconds with a 3 minute headway between trains,16 cars to each train, a 1,323 safe, spacious and airy seating capacity, 13 trains per hour, 16% of the carbon dioxide equivalent journey by car, a saving of 15,000 tons of CO2 per year?

Answer:
HS2 – or does this remain just a distant pipe dream. Commuters want value for money, lets not waste it on outdated policies and ideas.

Member
Michael Mason says:
2 May 2014

…and in a decade’s time when (as in France and Spain) all that has happened is that the economic drift to London has accelerated and house prices have doubled, we can blame the short sightedness of today’s MPs and look for new money to build lines connecting the north west and north east.

Member

Every day a new announcement: “The Parliamentary train now standing in a siding in London is the delayed 2010 departure for The North. It is now expected to arrive at The Midlands at 2026 where there will be a connexion to The North at approximately 2033. Passengers wishing to take this service are requested to get on board now.” “We apologise for the delay to this service which is due to objectors along the line and a signal failure at Westminster. Please familiarise yourselves with the emergency procedures displayed throughout the train.”

If I’m lucky, I shall be a nonagenarian by the time the new line opens all the way to Leeds but I still hope I shall be able to travel on it at least once and get something back for the taxes I pay towards it. The Parliamentary process seems to take as long as building the tunnels and track. I am always amazed at how we managed to build hundreds of military airfields in just a few years during WW2.

Member

My view is that we should be cutting down on use of road and rail for business. There is no substitute for visiting friends and family and we have to budget for the cost of transport. With business, the costs are just passed on to the consumer, so there is less incentive to find ways of economising. Modern technology provides many solutions that could help businesses cut down on the cost of transport and the waste of employees’ time spent travelling.

I would rather the money earmarked for HS2 was spent on housing projects to make it practical, desirable and affordable to live near where they work to cut down on commuting.

Member

To add: Where government could help is to reward companies that do make significant cuts in their use of transport.

Member

Well expressed John.

I very much doubt the feasibility of a project of this magnitude could solely be initially financed by the taxpayer. It is my understanding the Japanese Government at the time of their building operation ran out of funding halfway through and had to resort to private investment in order to complete but the financial rewards have long since paid off.

One of the advantages of high speed rail Wavechange would encourage businesses to build nearer to stations which would automatically reduce transport travel on motorways especially, at the same time maintaining important intercity links and improving agglomeration benefits by bringing people and families closer together. With most developed countries now investigating the advantages of high speed rail it only emphasises the importance of keeping abreast of global competition and enterprise.

I very much doubt whether I will still be here to enjoy the experience if it ever comes to fruition but hopefully my children and grandchildren will. I would probably need to consider revisiting Japan again fairly soon in order to capture the innovative delights of the magnetic levitation of the latest Maglev!

Member
Dave says:
6 May 2014

Hi Michael, Money being spent on connecting the North east and North west with good quality trains as far as any Government we have had has been concerned anything North of Luton just does not exist and the very thought of spending money which does not benefit London.. Well thats unthinkable !! ..What are you thinking lol

Member
Richard McMillan says:
1 May 2014

Mr Cable talks a good case sometimes, but the coalition government is too slow. I don;t think they have the right intent to deal with the Big 6 or any other large organisation.

Member
BILL fish says:
1 May 2014

It is four years since this diabolical coalition Tory/Lib Dem government came to power, why has it taken them so long to take some action against the Gas & Electricity companies increasing their tariffs year on year without any action against them. It is only since Ed Milliband threatened to freeze prices, if a Labour Government win the 2015 General Election has forced their hand.

Member

All we are doing here is papering over the cracks. There is a fundamental problem with big business & government in this country, they all want to rip us off. From cartels in the power industry to small print in phone contracts to unfairness in business & employment and to selling off our private information by the NHS and many other bodies, they think up new ideas to circumvent the Regulators all the time.
We don’t want new laws which will be ignored and new levels of bureaucracy, we just want fair dealing and a new code of ethics throughout business and government. Any body which is seen to be acting unfairly should have to repay any profits they have made and the directors should be ostracized. We need to set an example. Fred the shred got away with it. No more.

Member
Ladsdon Wellgood says:
1 May 2014

I am becoming convinced that regulatory systems are no longer adequate and probably lack the will to control what has become international piracy by global corporations. Today’s contributors to this site note many of the symptoms. The danger is that the irresponsible drive to increase profits and evade taxes does untold damage to the lives of the poorest everywhere, and puts the future of the planet at risk. The majority seem no longer interested in engaging with political processes and working for a fairer world. They have too many distractions in televised sport, social media, online gambling, computer games – provided by the very corporations which rip them off and whose filthy-rich executives do little or nothing for the societies on which they prey. The political debate is stultified by smart-Alec upstarts who distract from issues of balance and equity, and derail the process of creating a better society for everyone. Where once we as individuals in every part of the land were exhorted to help the poor, it is the state which is now expected to do all the helping, without the tax contribution of those wealthy enough to hide away the dosh in an exotic island tax haven. Is it too soon to think the revolution might not be so far away?

Member
Vivian Parry Williams says:
1 May 2014

Has anyone given any thought about the reasons we are facing an energy crisis nowadays If we, as citizens had shown any resistance to the Tory governments’ crazy privatisation policies in the late 1980s, we wouldn’t be in this situation nowadays. Back then, the rest of the world looked on in admiration at the efficiency of the Nationalized electricity industry. Those were the days of the Central Electricity Generating Board, the National Grid, and the area boards. When the words ‘power cuts’ were almost unknown. When all the power stations belonged to the nation. When unit prices were affordable to all. Now, almost all the generating plant belongs to companies from all parts of the world, apart from Britain, thanks to Thatcher and her lot selling the family treasures. And for competitions’ sake, which was meant to create a competitive market, and to lower prices. How misled, and stupid we were to believe such claptrap! It was all for selfish, and ideological reasons, Could it be that that the present government is hand in glove with the present, foreign-owned generating companies, knowing that within the next couple of years we shall be facing an energy shortage, encourage these companies to raise prices, so that consumers use less power? The older power stations are reaching the end of their generating days, and the country will be facing power shortages soon. Pretending to be acting on behalf of the consumers by ordering the distributing companies to keep prices low might fool some of the people some of the time… Panic time has arrived, and electricity generating facing shortages. We should demand that this essential industry be re-nationalized, and a programme of new electricity generating plant building be entered into, before the lights finally go out.

Member
Anthony Kennedy says:
1 May 2014

I hate this bogof system, as some supermarkets even have you having to buy up to Five items to get a discount. As a pensioner I mostly only want One item, as my pension does not allow me to buy multiple buys to get it cheaper. What a rip off but the Pensioners army is growing every year, so Supermarkets beware.

Member

Several times in the USA we have bought one item that is on a multi-buy offer and have been pleasantly surprised when paying to find the price adjusted to the offer price.

Why can’t our supermarkets do the same?

One offer that always gets me, is when you have to buy 2 x 500gm of butter/margarine to get the special offer. 1 tub lasts over a month so a second tub would go to waste.

Member

I am continuously appalled at the complete lack of understanding of consumers rights by retailers, cold callers, suppliers of services etc. Most of them just disregard any notion of consumers rights and break the law every time they sell.
Worst still are cold callers who have never heard of the TPS, use pressure tactics, and tell blatant lies about products. I was recently harangued by a conman selling a device to attach to your boiler which would save 35% on heating bills. I told him that I was an expert on energy saving – having written a report on the subject recently – and that 35% savings were impossible with what he was selling. he got really annoyed with me when I reminded him that he cold-called me,and that I was as a TPS subscriber. This is becoming typical behaviour by desperate conmen.
The laws must be upheld and strengthened by our watchdogs.

Member
Paul C says:
2 May 2014

Its quite clear that the Government (whoever is in power) treat us, the voters with contempt, so many empty promises, endless misleading statements such as “we will make the energy companies give a clear billing system, so that people can make a choice, because they understand what they are being charged”.

Please forgive me, but how many voters bombard their respective MP with demands for change? We are a fickle nation when it comes to exercising our most powerful attribute, that being the vote, and the pen. Instead of hundreds of thousands writing to the Government on any issue not just this, there is more likely to be hundreds, therefore, they treat us with contempt, end their comfort seat and get writing/emailing, no MP wants to be deselected!

Member
Alan says:
2 May 2014

What is really required is politicians and Regulators with old fashioned BACKBONE and GUTS to take on these vested interests. Without that this is just window dressing and the Bankers and Energy bosses etc. will continue to do as they please and laugh at us all. Nothing that matters will really change.

Member
Terry Langley says:
2 May 2014

Energy companies in particular have been a hobby horse of mine for the last five years.

I have been involved with taking a company to the ombudsman over billing and charging with some success and have therefore taken a keen interest in the behaviour of these companies and how select committees have approached the major energy firms. Too soft for my liking.

Corporate governance with certain large companies and institutions, not just in energy but banking and other areas in recent years has been a disgrace, and the idea that customers and the general public will continue to cow tow to the practices introduced for sheer profit should be thoroughly investigated where the real truth must come out.

Questions need to be asked and answers given to allegedly possible market rigging, and why the complex structure of how companies are set up to buy/sell the commodity within this structure is deemed acceptable, and whether unscrupulous practices have been going on across the board from very complex tariffs/billing to the process of increasing customers payments to encourage large credit amounts on accounts which favours highly the companies in question.

I am surprised that Ofgem and the regulators have been so slow over the handling of all these matters over such a long period.

Organisation set up to oversee best practice and tight controls should have the teeth to hold these companies to account… This has been far to slow a reaction and hopefully, through seriously tough investigations all will be revealed as time goes on, and by the way, fines do not help dissatisfied customers one jot; redress needs to be given back to customers and not end up in some government coffers where yet again customers are on a loose/loose basis.

I want to see some good old fashioned principles upheld… Good business practice that benefits All, not the top executives who are paid absurd bonuses/salaries/packages for failure.

Directories of these companies have always had responsibilities for the actions and the behaviour of the companies they run and operate, so when failure occurs why are there no repercussions?

Good companies need good governance…. what has gone wrong, and why is it acceptable to engage poor executives, ridiculous remuneration committees setting these absurd pay packages/contracts when failure takes place because of inept leadership..

Loyalty to customers, for without customers you have no business and a pride in the service being provided not some second rate approach that is so dismissive of serving the people that matter and which the business depends.

Member

I feel it is high time we start asking whether our regulators are fit for their purpose. They seem to be listening far too much to the companies they are there to control and not to the needs of the consumer, which they are there to serve.

OFCOM must tackle the problem of nuisance calls by ensuring that marketing calls are only received by those who OPT-IN to these calls. Substantial fines of companies that harass the public with nuisance calls would be a useful source of revenue.

OFGEM is making encouraging noises but does not seem to be doing nearly enough to tackle the problem that directors’ pay and shareholders’ dividends come before the needs of the consumer. The supply companies want us to accept smart meters at a time when genuine concerns have not been addressed and at a cost that suggests that a healthy profit is being made. The consumer is also expected to foot the bill for wind farms when what is needed is renewable energy that will provide power 24/7 and not just when the wind blows.

Are any of our regulators giving us value for money?

Member

Definitely the regulators do need a good kick up the behind. Their far to slow to react, and as you mentioned seem to care more about not upsetting business than protecting the consumer. And if their powers aren’t string enough they just seem to accept that. and that’s not good enough.

Member

I have never understood why the Government does so little to protect British businesses.

As long as our essential services are owned and controlled by foreigners, we will never get a good deal. The don’t own us to be nice to us do they?

Business after business is taken over by foreigners then closed down. Car manufacturers, Cadbury’s, ICI come to mind.

How is it that asset stripping companies are allowed to take over our companies and destroy them?

Where is the monopolies commission every time a company swallows up one of it’s competitors?

And now Pfizer wants to take over AstraZeneca. The government should stop this before it is too late.

Member

Another pet hate of mine is why should I have to pay for caller id just because phone companies have seen a genuine need in it to combat nuisance calls so they’re taking advantage of the situation.

If I had my way they’d be just a liable as the scam artists that kept calling me. They after all are enabling the scammers to go about the evil ways. I bet nuisance calls would almost certainly disappear if that were the case.

Member
Burgmeister says:
2 May 2014

Whilst I agree that a simple tariff showing the fixed prices per unit of energy will help the consumer properly compare suppliers I can not understand why companies are allowed to be both supplier and generator. This clearly puts these combined companies at an advantage to any newcomer that has to purchase their energy from them before selling on to the consumer. Seperate the 2, simplify the tariffs and get the bills down!

Member
Dave R says:
2 May 2014

I fear that the situation has got so bad that an organization like Which? is left very much tinkering at the edges. It is no longer sufficient to request stronger regulation or to appeal to trans-national corporations to play fairer. To protect consumers (and producers: most people will be both for much of their lives), Which? should now be campaigning for a fundamental change to the entire economic system. Judging by the justified anger in the vast majority of the comments on this page, there should be no shortage of support.

Member

International companies have become international pirates with an agenda of paying CEO and others in the hierarchy astronomical salaries for devising systems to rip off and defraud the customer. Regulators and governments are impotent to act and by the time they do businesses have made hundreds of millions in profit and are then onto the next scam and the merry go round starts again! Modern technology has given businesses an unprecedented advantage over the customer with morality being virtually none existent when it comes to treating the customer fairly. It would be even worse if we didn’t have an organisations like Which. Just how multi national companies think it is in their long term interests to avoid paying taxes to the host government but giving profits to their executives thus weakening the government and by inference the democratic process is beyond me. It is short term greed and unless governments deal with this my forecast is for worse to come.

Member

It is all very well Vince Cable saying the government will limit regulated rail fares to RPI all this means is that train operators will simply put up unregulated fares by even more to make up for it. Bring back British Rail!

Member

Looking for fairness in rail fares opens a can of worms because of the different subsidy regimes across the different categories of passenger. Government’s share of rail’s total income has now fallen to around 30%, and as a result of government policies, regulated and unregulated fares are now seriously out of balance. Season ticket commuters are the most heavily subsidised yet the services provided for them are the most uneconomical because of the extra capacity required only in the Monday – Friday peaks, but such is their influence that any above-inflation fare rises are politically unfeasible [and I notice that the Labour Party are now taking the commuters’ corner]. There is, though, a powerful economic case for maintaining subsidies for commuter services because all major cities depend on the efficient mass movement of workers and the alternatives are impractical. Unregulated fares have been rising exponentially for some time, and this will no doubt continue on an upward curve because the income makes up a high proportion of passenger fare revenue; these fares are effectively subsidising the regulated fares even though many of the people making irregular off-peak train journeys, possibly as much as half of them, are the least able to afford them, certainly at full-fare levels. Advance-purchase tickets are the best value for that category but they require considerable forward planning and are quite restrictive. Off- peak ‘walk on’ fares are relatively OK, but ‘anytime’ fares are very expensive in comparison with the other categories. Unless there is a big rise in the taxpayer contribution to redress the imbalance, the only way to level the pitch is to put up regulated fares by more than inflation and to lower, or at least to stop increasing, unregulated fares. No signs of that train coming any time soon it seems.

Member

John, peak travel is a problem we have never tackled – whether road or rail. It is time we looked at staggering working hours – even by an hour or less either side of the peak. It would help both relieve the pressure on capacity of road and rail and speed journeys. I am not in favour of subsidised rail travel – otherwise road commuters would also feel entitiled to help from the taxpayer. I think we should be looking to live nearer work – or put work nearer where we live – to cut down travelling distance, particularly in the southeast. Encouraging business, civil service, and new enterprises to locate in less-stressed parts of the country would be part of a solution.

Member

I totally agree with you Malcolm. We have towns and cities within an hour or so’s travel time of London that are dying on their feet for the want of some good employment opportunities. Personally I think there has to be a degree of government push and some practical and economic incentives for the relocation of businesses to the regions. Norwich – and lots of other cities too I should think – has lots of empty office blocks just waiting for business and government operations to relocate; it also has plenty of good value housing in pleasant surroundings to attract the workers, shorten their travelling time, and enhance the quality of their lives. I have read that planners in the Office of the Mayor of London are thinking of a network of underground toll roads around the capital in order to cope with the predicted rise in population as more and more people cram into less and less space with every terraced house split into two dwellings and the rail and Undeground networks creaking at the seams. Madness.

Member

And there’s more …

Supermarkets should be prevented from constantly moving things around the store. Their excuse of promoting seasonal goods is just laughable. As we all know they do it to get you and I to walk round more of the store where they’ll be tempting the unwary here there and everywhere. And maybe then staff would have time to make sure there are prices listed for all goods, or better still spot obvious pricing mistakes, like the classic 59p each or 2 for £1.50, when it should have been either 2 for £1.00 or 3 for £1.50

Member

…………………as long as the rail fare situation doesn’t develop into another confusing energy tariff debacle where consumers have trouble determining the wood for the trees – currently 350 tariffs! Heaven forbid!!!

Member

I have long since lost faith in any Government Regulator or similar being able to deal with companies overcharging effectively. Problem too many friends in parliament for a lot of our big businesses to care how much the ordinary public pay for goods and services. The only reason it has now reached discussion point can be summed up in three words General Election 2015.