Focusing on a false economy

3 Nov 2010

We now know the big picture about the public spending cuts but people don't deal in billions so the human scale is still academic.

Furthermore, many cuts and benefit changes won't begin for some time. The meaning of other cuts is unclear because bodies such as councils still have to decide how their budget cuts will be passed on.

However, very specific cases of injustice will hit the headlines and make people think twice about the strategy behind it.

It's reasonable to reduce the deficit and encourage the private sector to create more wealth. It is ludicrous to do this in such a short timescale and without more use of taxes which can target those with the broadest shoulders and be altered as circumstances change.

I will ensure than wealthy and cosseted ministers know in no uncertain terms about the consequences of their decisions on ordinary people.

There's one particularly crazy decision that I want to highlight now. There's been a welcome increase in consumer rights in recent years - fewer people take rip-offs and bad service for granted.

Two years ago, Labour established an independent organisation called Consumer Focus. It has successfully empowered consumers by devising practical solutions and named and shamed bad companies.

For instance, it negotiated the repayment of £70 million to 1.8 million npower customers who over-paid for gas, recovered £1.4 million for less well-off energy consumers, saved consumers at least £15 million each year in lost interest on cash ISAs and cracked down on rip-off garages and other rogue traders. They reckon that they have won £500 million for consumers.

They are run on a £5 million grant from central government plus £9 million from a levy on the energy and postal industries. Yet the government is to scrap it although it is worth its weight in gold. The Times Personal Finance Editor Andrew Ellson rightly says this is the definition of false economy.

The minister acknowledges Consumer Focus does good work but wants to transfer its functions to the Citizens Advice charity. This is an excellent voluntary network but is already overwhelmed and doesn't have the clout and expertise to challenge big business.

Without Consumer Focus spivs and con-men will have a field day. That just cannot be right. The Times expert rightly says there cannot be a clearer case of ideology triumphing over common sense and the decision should be reversed forthwith.

Newcastle Chronicle and Journal

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Promoted by Paul Foy on behalf of Dave Anderson, both of St Cuthbert's Church Hall, Shibdon Road, Blaydon, NE21 5PT