/ Money, Shopping

What would you ask business if you had the chance?

Deputy director-general of the CBI, Katja Hall, wants your views to put to a panel of company CEOs at the Great Business Debate. How do you think businesses could build consumer trust?

As deputy director-general of the Confederation of British Industry (CBI), I spend a lot of my time talking to business people and speaking up for business. Our mission as an organisation is to create the conditions in the UK where businesses can compete and prosper for the benefit of all of us.

Consumers play a key role in all of this: every business is its customers. By voting with their wallets, customers help keep businesses on their toes, encouraging them to innovate and strive to offer better choice and value in order to keep their customers and attract more.

Business hasn’t always got things right

Business in the UK has a great story to tell about the difference it makes overall – from leading the economic recovery, to the jobs it creates and the great British brands we’re all proud of.

But negative stories about business continue to hit the headlines at a time when public expectations are rising. Companies have not always responded quickly enough to address the concerns many people have.

Business cannot reach its full potential when it doesn’t have the confidence of its employees, local communities and importantly – consumers.

The Great Business Debate

Business men and women need to do more to engage with the ongoing conversation about the role and contribution of business. They need to talk about the great many things their companies do, but also address difficult issues – like whether consumers are getting a fair deal. That’s why the CBI has launched The Great Business Debate – to encourage business to do just that.

In a few weeks’ time, I’ll be joining Richard Lloyd from Which? and CEOs from major companies to debate what more business can do to build consumer trust. A debate driven by questions from a live audience and you.

That’s where we need your help – we want you to suggest questions for our panel in the comments below. So what matters to you? Do companies really care? Is making profit at odds with serving customers? How real is competition? Would more regulation benefit customers?

What questions would you put to our panel about consumer trust in business? We’ll use as many as we can.

This is a guest post by Katja Hall, deputy director-general of the CBI. All opinions are Katja’s own, not necessarily those of Which?


Many interesting comments. Perhaps we should not trust any businesses! We should all apply “Caveat emptor”. We should focus on improving education particularly in educating our children in the ways of the consumer world and the value of money and how to manage it. Which? should continue its work of educating us in what is “best buy”. In the end businesses will loose if they are not honest in their dealings with consumers.
I would like to see serious breaches of consumer law be laid squarely in directors laps. They should be personally fined as well as the company. That way shareholders and directors get hit.
To get back to the original question, businesses should just try being honest and upfront with consumers, not out to con them. This applies to product quality and marketing techniques. It also applies to their dealings with suppliers. Suppliers need to be tougher with big businesses and make sure that they write into their contracts “payment in 30 days or pay interest.” If all suppliers did this as is the norm in Germany then fewer small businesses would go bankrupt.

Back in the 70s/80s we were sold the idea of capitalism as good for consumers as competition brought down prices. While this is true to some extent, our version of capitalism seems to have developed into one of charging as much as possible for a product, tying-in consumers, encouraging “upgrades” and failing to take responsibility for problems arising. I am aware this applies particularly to the technology sector and mostly companies based outside the UK but many others follow suit.
• The EU has tackled issues like roaming charges because competition wasn’t effective.
• Utility companies have been shamed into reducing prices.
• Supermarkets use their power to treat their suppliers with disdain changing prices and contractual agreements when the supplier already has commitments.
• Price increases are always passed on quickly but reductions are slow to be applied. Similar for interest rates, though conversely for savings.
• A product that should have a lifespan of 10-20 years is given a 1- or 2-year guarantee and may have built-in obsolescence. Companies do not seem to believe in their products beyond a year or two.
• Insurance companies and banks offer better deals to attract new customers but will not automatically offer those lower prices to their existing, “loyal” customers. Consumers have to do the time-consuming work of comparing deals on products (that I suspect are often intentionally made dissimilar to deter comparisons) and changing companies as we can no longer trust the ones we have used for years.
• I rarely have the option not to have my details passed on to other companies (the default is usually in the company’s favour) and we are obliged to accept terms and conditions detailed in copious small print (which we don’t read) before we can proceed with and online purchase.
• We are annoyed with junk mail and marketing phone calls despite TPS.
• Companies take our money instantly but a refund can take up to 28 days.
• Although we can open a bank account online in minutes, we have to write and post a letter to close it down.
• We (and perhaps more particularly parents) have to accept the marketing pressures pushed their way.
• There is little sense of responsibility from the finance sector following 2007 to the small “businessman” overcharging for shoddy work.
It all gives a sense of unfairness and everything being in favour of the business and against the customer. I have no problem with companies making a reasonable profit but if a company is making excessive profits then surely they are ripping-off their customers. Perhaps we need a definition of “reasonable profit” so we can see how companies fare on the scale.
A lot of contributors so far have put forward good (in my humble view) comments and questions. John Ward made a very good point regarding “good men and women who had principles, a moral compass, a set of ethical values, and an overarching desire to serve us well” but it seems that once a company has reached a certain size it really is all about maximising profit, knocking out competition and, regretfully, using its power to beat down everyone else, including its customers.
My question is this: when will fairness for those who don’t have the power/influence/money (for litigation), and particularly for consumers/customers, be brought into the purview of businesses?
My concern is this: the CBI doesn’t seem to be a likely organisation to turn things away from the many businesses they represent (in so many sectors) towards the consumer. From their website: “The CBI is the UK’s premier business lobbying organisation, providing a voice for employers at a national and international level”.
I welcome, and look forward to, Katja’s offer to feedback following the event on the 25th.
Caveat emptor.

There are good aspects of capitalism, such as competition between companies, which can result in improved services and lower prices for consumers. Unfortunately we now seem to have a considerable amount of corporate greed and exploitation of existing customers.

I agree entirely with both of your sentences, wavechange. My posting should not be read as anti-capitalist by any means. We are, effectively, being asked what is wrong from a consumer perspective.

Wavechange – Input cartels into your favourite search engine and see how many have been prosecuted this century in Europe. The most recent being in France just before Christmas involving a whole host of well-known multi-nationals dealing in household goods and cosmetics.
Cartels can be incredibly difficult to prove so I would guess more goes on than ever reaches the courts.

Until such time as the Directors of companies face prison terms the defence to everything will be is it is our duty to run the company in the interests of shareholders. That the interest coincides with the Executives pay increases is understood.

The increase in worker safety with the change in the law may very well indicate the benefits of removing Director protection and concentrating their minds:

” A catastrophic accident caused by a toppling crane not only resulted in the tragic and avoidable death of a worker but also criminal liability and a fine of £80,000.00 for a Director of the employer (now in liquidation), evidencing that, when it comes to major breaches of Health and Safety, it’s not possible to hide behind the “corporate veil”.
The accident in 2007 happened when the deceased, Richard Thornton was crushed under a 50-tonne crane because the crane was too far away from the steel column it was lifting. The prosecution of the company and director was on the grounds that :-
the work had not been planned and carried out safely
the crane had not been properly maintained – it’s alarm was not fit for purpose and, crucially, override switches were also faulty. Had such switch been working it would have prevented the lift in the first place due to the overload.”

Dieseltaylor – I looked up cartels when I posted about the historic Phoebus cartel concerning light bulbs. Some large companies have been fined. As you say, cartels can be difficult to prove and we may see only the tip of the iceberg. I now dislike the term ‘reputable company’ and would prefer to use ‘well known company’ because you would be hard pressed to find any large company that has not come in for considerable criticism. I suspect that the consumer would be better served if we had fewer very large companies.

As I understand it there is a subtle difference between a cartel and tacit collusion in that a cartel is a formal agreement between companies to price fix and tacit collusion is an informal agreement when a market leader will fix a price and the others (usually a select few large operators) follow suit when it is more difficult to prove any wrongdoing but nevertheless can stifle competition.

Rob Cumberland says:
15 February 2015

I’m astonished that business needs to ask how to re-establish trust. Is it not clear that mis-selling is wrong? That weasel small print and bad terms of sale are a problem? That failure to deliver and poor quality goods and services are what lost trust in the first place?

Where’s the secret? Do consumers really have to have to describe obvious ethical practices for business leaders here? Isn’t this the whole problem? We’re all human, we’re all consumers. Surely business leaders know as well as anybody else how to behave with integrity. Why don’t they do it?

We know profit and competition are not a problem. Many businesses make money and compete without screwing customers. Sadly regulation to safeguard consumers will always be necessary and has been since the first miller added chalk to his flour.

So my question is simply this: what does business expect to gain by acting as though they don’t understand the problem?

Falkenna says:
5 March 2015

This sums it up beautifully, Rob. I hope that there is a real intention here to improve things, but it is a little hard to believe and appears a bit Polyanna.

While consumer rights have in the past been viewed as something of a liberal/left cause, over the years I have found Which? to be very much within a consumerist framework of “Buy more, buy better, have fun with expensive toys, we just want things a bit clearer and safer”. In other words, to me the magazine and many of its subscribers would appear to be proper conservatives, if not Conservatives. This is not the place for a value judgment on this; I only mention it here to say I am a bit shocked at the strength of anti-big business feeling expressed in this forum, and suggest to Katja that it indicates very serious problems indeed, which should be viewed as a wake-up call.

Robert C says:
16 February 2015

Purchasing goods and services is very wide ranging, from a music download to a physical item in a local shop. I suppose 2 things spring to mind:

a) is it clear what I will be getting – clearly described/labelled and fit for purpose ? (so a DVD player that fails after 13 months and costs more to repair than buying a new one is NOT. If it was labelled “will need to be replaced in under 2 years” who would buy it ? ) If they want to sell me an expensive extended warranty, I will take note of the warning !

b) most of us would not want to export jobs unless essential – so of course oranges are grown in warmer countries, but why are call centres overseas? It is particularly important when things go wrong – our first reaction is we want it fixed. Explaining to someone in a busy call centre while all they do is read a script (again) is no help. I want to talk to someone who understands, listens, and then takes action based on their understanding. Also I want some consistency – if I call back I want them to know the history. Good customer service call centres, would help rebuild confidence when things go wrong. (after all, is the company expecting a lot of problems ? If they are dealing with a lot of problems, they should solve the cause not export us all to press 1 for this and 2 for that )

We live in a very uncertain world and as more of our industries are bought by foreigners and moved abroad, we seem to be very reliant on the rest of the world for too many things.

So my questions would be:

What are businesses doing to source and promote British products?

If our country was cut off from the rest of the world tomorrow, what are businesses doing to ensure we can be self-reliant.

I’m also suspicious of a company that has outsourced (aboard) many of the jobs undertaken by its workers but yet still has all its expensive directors.