UK watchdogs agree on ‘action plan’ to prevent consumers being ripped off
Britain’s watchdogs have agreed to a suite of measures aimed at protecting consumers from being ripped off by companies during the cost of living crisis, after a meeting with the chancellor.
Jeremy Hunt said the “action plan” agreed to support consumers would “ensure they are treated fairly” amid concerns over greedflation – companies using rampant inflation as a cover to hike prices and boost profit margins.
However, the measures are unlikely to deliver much financial support to Britons who have faced sharp jumps in their household bills at the same time as soaring mortgage costs due to higher interest rates.
The chancellor met the heads of the Competition and Markets Authority (CMA), Financial Conduct Authority (FCA), Ofcom, Ofgem and Ofwat in Downing Street. Each regulator committed to speeding up or deepening existing work in their field.
The CMA is to publish a planned study into the profit margins of supermarkets and fuel retailers on Monday, and will release a study into grocery pricing in the next few weeks. Retailers have been accused of using misleading price tags.
The competition watchdog will also update its inquiry into the rental and housebuilding sector in August.
Ofcom, the communications regulator, agreed to push broadband and mobile suppliers who do not offer discount deals to vulnerable customers, known as social tariffs, to offer them and also waive fees for customers who want to switch to such a tariff.
It will also publish a review into “in-contract prices to ensure consumers are sufficiently aware of what they are signing up to by the end of the year”.
More here:
Full story: MPs probe water industry
Labour’s shadow environment secretary Jim McMahon tabled an urgent question on the financial resilience of water companies, asking the government whether the firms are in a secure state, my colleague Helena Horton reports.
Water minister Rebecca Pow, responding for the government, refused to comment on Thames Water save for saying there was “a lot of work going on behind the scenes” and that there is a “process in place, if necessary, to move us to the next stage.” This would be a SAR which would effectively take the water company into public ownership.
She said: “It’s not for me to comment on the individual financial position of a water company.” and said it was “up to investors to solve any individual issues”, and refused to say when the government had learned about the issues plaguing the company.
Much of the debate focused on privatisation of the water companies, with Labour MPs and Green MP Caroline Lucas saying the situation with Thames Water was yet another sign that privatisation has failed. Labour does not currently have a policy to nationalise water.
McMahon said:
“The news that we are seeing is the result of the Conservative Party’s failed profit above private interest experiment. Handing over the water industry at a knock-down price, together with the entire infrastructure serving the nation, over to private enterprise.”
Labour’s Andy Slaughter pointed out his constituents in Hammersmith had both been without water in recent years and had their homes flooded with raw sewage by Thames Water.
He added: “no one will miss the asset strippers at Thames Water if they go under” and said all he wanted for his constituents was a good service at a fair cost.
However, Pow gave a full-throated defence of the privatised system. She said:
“Since privatisation, capital investment in the water industry has been 84% higher than it was pre privatisation,” and added that “privatisation has allowed clean and plentiful water to come out of our taps.”
The minister insisted the government has taken “significant steps” to ensure the water industry delivers good outcomes and that there has been investments of £190bn since the sector was privatised in 1989. She also said the sector is financially resilient and pointed to the regulator Ofwat’s financial resilience report.
Privatisation of water has been a disaster.
— Rebecca Long-Bailey (@RLong_Bailey) June 28, 2023
Water companies have borrowed billions, diverting income from bills to pay dividends & interest payments. As a result bills have increased by over 40% in real terms since 1989. The case for public ownership couldn’t be clearer! pic.twitter.com/IOjEK504hM
Updated
