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Budget 2017: what’s your view?

Budget 2017

The Chancellor has given his first Spring Budget today and maybe, as expected, we’re left waiting for his Autumn Budget to see any big changes. So what do you make of the announcements?

Perhaps waiting around for major changes should’ve been expected today given the Chancellor’s decision to move away from a Spring Budget. This decision means that we’ll have yet another Budget at the end of the year.

In any case, here’s an overview of the key consumer issues that cropped up today.

Consumer and Markets Green Paper

We’re pleased that the Chancellor provided a bit more detail on the forthcoming Consumer and Markets Green Paper. In this the Government plans to tackle T&Cs, in order to make them clearer, simpler and shorter. It also plans to give more powers to enforcement agencies, such as the Competition and Markets Authority.

But we know many of you have been expecting to see tougher action on the issues that you face in critical markets, such as financial services, energy, telecoms and transport.

As per my Conversation last week, Which? revealed that there are millions of working people who are currently struggling to make ends meet.

Many of you shared your stories with us, such as Sharongibbs who explained the difficulty of relying on food banks:

‘My daughter and her family are struggling her partner works and they were on tax credits this has been changed to universal credit and they are getting less money now come the end of the month they are struggling they have had to use the food bank and rely on family to help.’

And for Tony Cave, it’s been a struggle to decide between heating or eating:

‘Just managing for me means spending only what I can afford and living within my means.This means that during the past winter I had to make the choice between eating and heating so my flat was only heated for 2 days at Christmas and not before or after.’

The Chancellor’s continued commitment to making essential markets work for consumers is welcome, but we now need to see comprehensive plans to tackle these markets in the Green Paper.

We also need the Government to urgently set out how consumers will be prioritised in the Brexit negotiations.

Social care

The Chancellor also announced a £2bn investment in social care services in England.

Alongside this, we look forward to seeing the Government’s paper reviewing ways of helping people meet the cost of elderly care. There are rumours that this could include tax-free access to pensions, the launch of a ‘Care Isa’ and a potential cap on the total cost of care.

Savings and pensions

After years of seismic changes to pensions, they barely got a mention in this year’s Budget.

The only major change was announced in last year’s Autumn Statement – a reduction to the amount you can put into a private or workplace pension after you’ve started drawing on your retirement savings.

On the savings front, the Chancellor confirmed something we’ve long suspected – the National Savings and Investments ‘Guaranteed Growth Bond’, which launches in April and will pay 2.2% a year for three years.

Your views

We will continue to track these developments in the coming year.

For now, what are your views on the Budget? Is it ‘see you in Autumn’ or is the Markets Green Paper going to be enough for you to feel that the Government is working to address where things are not working in essential markets?

Comments
Member

There’s a hole in my budget, dear Treesa, dear Treesa,
There’s a hole in my budget, dear sweetshoes, my dear.

Well fix it, dear Philip, dear Philip, dear Philip,
Well fix it, dear Philip, dear spreadsheet my dear.

But how shall I fix it, dear Treesie, dear Treesie,
But how shall I fix it, dear Treesie my dear?

By increased production, dear Philip, dear Philip,
And building up exports, dear Hammond, my dear.

That means working harder, dear Tressie, dear Troosie,
And the workers must have some incentives my dear.

Then decrease taxation, dear chancy, dear figures,
And raise all their wages, dear Philpots, my dear.

But where is the money to come from, dear premier,
But where is the money to come from, dear Treepsie, my dear?

Why, out of your budget, dear Chancy, dear Philip.
Out of your budget, dear chanc’llor my dear.

There’s a hole in my budget, dear Treesa, dear Treesa,
There’s a hole in my budget, dear sweetshoes, my dear.

With apologies to the inimitable Flanders and Swann

Member

The Consumer and Markets Green Paper is what interests me and no doubt others who want increased consumer protection.

Simon highlights the problem of people struggling with energy bills. I believe that Which? should stop urging people to switch energy supplier or tariff and focus on the underlying problem that energy suppliers can legally let their customers pay much higher prices than others if they fail to take action. Obviously the disadvantaged are the main victims but many others are caught out, for example if they have other problems such as family illness.

Member

Hi @wavechange.

I’m actually quite excited by the Consumer and Markets Green Paper. It is a real opportunity to look at where markets are not working for consumers and see if we can iron out some of those practises that leave consumers feeling frustrated.

Where we probably differ though is on switching. You’re right that often it is left in the handa of the consumer to take action to engage in a market. The market should get to a stage where it makes it easier for consumera to engage, and actually undertake better engagement with consumers. Hopefully as data drives innovations in new services and more information is provided to consumers, then consumers engagement in this complex market and switching becomes easier.

I’d love it where the market could get to a place where just a few clicks of a button and you can switch – imagine a time where you can switch your energy company, in confidence that it will all go through ok, before your morning coffee?

The Which? campaign on standard variable tariffs is looking to address some of the issues where companies are leaving their consumers on tariffs without engaging them, and we’ll be doing more in this space in the future.

On vulnerable customers there maybe more targeted interventions that could be made to help vulnerable customers and we’ll have to see what the Green Paper says on that.

As the paper develops I’ll make sure I keep you all updated on its contents.

Member

I have suggested that we abandon fixed price fixed term tariffs that seem to be subsidised by those on standard variable tariffs. The SVTs can then be reduced in cost so the big disparities begin to disappear. We seem to not wish to consider such an obvious improvement; why is that?

However we all have to take action to run our lives properly; a nanny state will not be there (I hope) to do everything for those who are perfectly capable.

The emphasis on “struggling to pay energy bills” ignores the fact that energy is the least cost in most essential purchases. Food, housing, travel for many cost then much more. I don’t like populist bandwagons. Just address all the costs we have to “struggle” with.

Member

Thanks Simon. Regarding unfair practices I think we need to nip them in the bud by taking prompt action or better still prevent them being introduced. It is good that Which? is raising awareness of the many problems that did not exist a generation ago.

One of the best ways to get customers to engage with the energy market might be to sell energy through supermarkets. I certainly did not like the suggestion that energy companies might be allowed to phone us with their deals.

However, I do suggest that Which? looks into the reasons why many are ‘disengaged’ and they would find that the problem is not just people who are too lazy to make the effort. Health and mental issues are becoming a greater problem as people live longer. By playing the switching game, those of us who are able to secure cheap deals are being subsidised by those who cannot, since the companies will maintain their profit margins. It is exploitation of many citizens – and it is legal.

Member

Would not a discussion on energy be better transferred to the “Update: reforming the energy market” Convo? Meantime……………

A comprehensive investigation has already been done, including why people don’t switch and what groups they belong to. No need for Which? to repeat this. One conclusion was that a large number of people who knew the advantages of switching and knew how to switch simply were not bothered enough to do it.

What we should do is concentrate on those who are unable to deal with finding their best supplier and tariff, and look at abolishing subsidised tariffs to make switching less advantageous.

In the meantime, publicising switching to help people save money is worthwhile. The suggestion “Which? should stop urging people to switch energy supplier or tariff” seems a very negative approach until other matters are sorted out as it will unfairly disadvantage those who would gain from switching. Even if tariffs become more equal switching should be facilitated – as Ofgem are doing – to gain a better deal or a preferred supplier as easily as possible. Rather than penalising people who are prepared to switch, we should be helping those who are not able, for whatever reason.

Member

If you want to switch to a different savings account or a different mobile phone contract the high street provides plenty of opportunities and every day hundreds, if not thousands, of people are helped by a customer service assistant to move their money or their phone contract onto better terms or a more advantageous bundle. It is possible that many who do so would not have done it unless there was an accessible facility in their locality. Yet energy, which is a vital necessity, has no such point of service for people to visit, pay bills, query their accounts, find out about different tariffs, or switch suppliers. The logistics of doing it in a competitive industry like energy with around fifty companies would not be straightforward but I think the absence of such a convenient facility is certainly one of the inhibitors.

It’s odd that in the days when you had no choice of energy supplier, the high street had shops and showrooms for the gas and electricity boards. Now that there is ample choice we are left to fend for ourselves on the internet and wait several weeks for a changeover to take place.

I accept that switching tariffs within the existing supplier’s range is relatively easy but the suppliers don’t exactly go out of their way to promote their tariffs – nothing will happen unless the consumer takes the initiative. People don’t like to pick up the phone and deal with a gabbling service agent in a call-centre.