| It's a great pleasure to be speaking again at the
Consumers' Association.
For almost 50 years the Consumers' Association has been a powerful
champion of consumer rights. Fiercely independent - and you should be -
we may not always agree on everything, but you know we will always
listen.
With over 700,000 members - the largest consumer organisation in
Europe, that's a pretty impressive voice to have.
It's been said that 95% of IT equipment is wasted because people
don't know how to use it.
It's the same with competition and consumers. We've done a lot of
work installing the framework, but surveys show that when consumers
complain and get an unsatisfactory response - 85% take no further
action.
We have tackled the supply side of competition - the Competition Act
in 1998, the Enterprise Act in 2002. And we've been successfully pushing
for reform in Europe.
But business and consumers will only begin to reap the rewards of the
competitive economy when consumers learn how to use it. So we need to
stimulate the 'demand side' of the competition equation.
This is why I am publishing our Consumer Strategy for consultation
today - and I want to get a broad spectrum of views on the ideas in it.
The strategy sets out the steps we should take to empower people in
the UK to become 'super consumers' - well informed, confident and
active.
By -
· giving them access to information;
· simplifying the law;
· making it easier to resolve complaints; and
· protecting them from rogue trading.
I'm going to talk to you about those 4 key elements of the strategy
today, but before I do, I want to set out why I think 'super consumers'
are absolutely central to the UK's continued economic success.
In 'Alice through the looking glass' the narrator advises Alice
"it takes all the running you can do to keep in the same place.
If you want to get somewhere else, you must run at least twice as fast
as that."
It's the same in the global economy:
China - now producing four times as many graduates as a decade ago.
India - three million graduates a year and the new Central and Eastern
European Member States of the EU - many with wages a fraction of ours -
now in the single market.
This is the 'looking glass world' UK companies' find themselves in.
And they have got to run fast to maintain their competitive edge and
move into new markets ahead of competitors.
So, huge challenges, but also huge opportunities in these expanding
markets.
And it is consumers who will drive companies to innovate, to produce
more, to provide better services and to succeed at home and abroad.
Britain in the 21st century is wealthier than ever before. With
unemployment at its lowest level for 20 years and disposable income at
an all time high.
Companies will only invest more in R&D if consumers demand new
products and technologies. Companies will only innovate if they are
rewarded by keeping their customers and finding new ones.
The US has some of the most innovative companies in the world and
more world-class companies - it is no coincidence that they also have
the most active consumers - driving their companies to be more
successful at home and abroad.
Because competition only begins when consumers start picking and
choosing. When they show their dissatisfaction with a product or service
by taking their money elsewhere. Money makes the world go round, but it
is consumers who are doing the spending.
So we need to think about what we can do on the demand side to get
consumers driving competition. Our consumer strategy sets out the
possible options. We've focused on the key things that could help turn
today's consumers into the 'super consumers' we need to drive
competition - and we want you to give us your views.
First - Consumers' needs information. There is already a lot out
there, but some of it is difficult to access and it's impossible to tell
what is good and trustworthy advice.
On Monday I launched our Consumer Direct service in Scotland - a
great leap forward. 3 more regions will be on line in the next two
months. And it'll be accessible across the whole of Great Britain by the
end of 2006. A £30 million service - a new national helpline and online
consumer advice and information. Providing immediate advice and the
front door to a wider range of help and knowledge.
For the first time we'll have a national database of all complaint
information - Trading Standards will have data at their fingertips to
clamp down on the rogues and support legitimate businesses.
It's not just about giving information out to consumers. It's about
getting information about what concerns them.
Things like 'small print' on credit agreements, which we've already
set about tackling through the Consumer Credit White Paper I published
in December and the four Regulations we delivered last month. And
requiring lenders to provide standard information when advertising
financial products so consumers can compare like for like and find the
best deal.
But we think there is more we can do to give consumers the
information they need and help them recognise good traders. We're
considering two options -
We support the OFT codes approval scheme - we want to see this gain
maximum possible recognition by consumers and expand to cover more areas
of trading.
And we want to improve access for consumers to information on
individual traders - we propose to do this by bringing together publicly
available information about traders.
Secondly, we can go a long way to help consumers understand their
rights, and exercise them, by making the law simpler. At the moment
we've got some 65 Acts of Parliament and 27 statutory instruments
governing consumer affairs.
We want a clearer legal framework. Easier for consumers to
understand, easier for them to know their rights and easier for business
too.
The existing patchwork of legislation is out of date in many areas
and inflexible in others. We need to bring it up to date and future
proof it to withstand the rigorous demands of rapidly changing markets.
We'd like to see a simple system based on a few general principles -
but we need to balance our ambition with practicality. The consultation
will ensure we get it right.
It stands to reason that our empowered consumers are going to stand
up for themselves more often and hold businesses to account. So the
third strand to our strategy is how we can make it easier for consumers
and for business to resolve their disputes.
Successful businesses already recognise the importance of good
customer service - they listen to all their customers - the ones they
lose and the ones they keep - because it helps them learn how to serve
their customers better, how to keep them and how to attract new ones.
When companies get it right - good dispute resolution really works.
70% of consumers who have a dispute with a company will continue to
trade with that company if the dispute is resolved effectively.
Listening to complaints, responding to and coming to agreement with
the customer is the right approach.
Where disputes cannot be resolved, we want to see better use of third
party dispute resolution. As with information and advice, it can be
difficult to tell what works and what doesn't. Consumer Direct will
signpost people to good quality dispute resolution services.
Finally, we want 'super consumers' to be confident to shop around
without the fear of being ripped off.
A fair trading environment is essential for business and consumers.
Helping business to comply with the law, and stopping those who are
deliberately dishonest from ripping off consumers.
But current enforcement is patchy - a postcode lottery. So we're
consulting on setting minimum standards to improve the quality and
consistency of trading standards services.
We want to take action to stop criminals slipping through the borough
boundaries and setting up shop next door. We need more targeted,
joined-up enforcement by Trading Standards - through partnerships,
pooling resources on regional basis, sharing expertise and intelligence,
with an enhanced coordination role for the OFT. This will enable more
focus on real priorities, on the scams which intimidate and exploit the
vulnerable and isolated, such as rogue doorstep trading.
I very much welcome the OFT's market study on doorstep selling. The
report includes some important conclusions and recommendations. We are
determined to act on it to protect the most vulnerable in our society:
the old and house-bound on whom criminals prey. To inform consideration
of how to proceed we are launching a public consultation on the
legislative options OFT have put forward.
Our international benchmarking study showed that consumer advocacy at
a national level in the UK is among the best in the world. That is a
tribute to Consumers Association and the National Consumer Council and
many others here today.
We strengthened your hand by introducing supercomplaints in the
Enterprise Act and I'm pleased to announce that from today the Consumers
Association, National Consumer Council and Citizens Advice are now all
officially designated to make supercomplaints.
For the future we've got the challenge of changing demographics and
changing markets. We can meet it by boosting the competitiveness of our
businesses and ensuring our consumers get a fair deal.
We've had some great successes in Europe leading to lower airfares
and car prices - the next challenge is to open utility markets. And the
UK is well placed to lead.
I also strongly support the creation of a single market in services
in the EU. Services currently account for 70% of EU GDP and employment,
but only 20% of intra-EU trade.
At home - Consumer Direct will be a key vehicle - bringing together
advice in one place. And it will also help with enforcement - feeding
vital information to Trading Standards.
We want to develop it further as markets change. Already the
utilities markets are coming together. Electricity companies offer phone
lines and gas companies will install your heating system, as well as
provide the fuel. The boundaries are blurring. The 'super consumer' will
be best served by a single point of contact.
We want to explore bringing utilities consumer bodies together so
they work more efficiently and make a stronger policy contribution, less
focused on routine queries. In time Consumer Direct should be able to
take on routine queries which these bodies currently deal with, enabling
them to focus on forward looking strategic issues to the benefit of
consumers.
The strategy we're publishing today for consultation sets out our
vision of how we can help consumers make the most of the competitive
market place we have created - so that they - and business - can reap
the rewards of competition.
Our vision is for 'super consumers' with information and advice at
their fingertips. Benefiting from a simple legal framework, confident
that, they won't be ripped off and secure in the knowledge that if
things do go wrong, a solution will be found. We want you to tell us if
we've got it right.
The consultation on the strategy will help us get it right and I very
much look forward to hearing what you think of it
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