In the last month alone we’ve seen Chancellor George Osborne’s claim to be presenting a Budget for working families undermined somewhat by the average £511 that around a million of those very households face losing under new tax and benefit changes.
Osborne also argued in his speech that he was simplifying the tax system, only for the following week’s Finance Bill to weigh in at a record 686 pages, prompting some tax experts to complain that they couldn’t lift it. He also made changes that will drag millions more people into the self-assessment system. And let’s not even get started on the insistence that we’re all in it together or the double-speak over the NHS or, more recently, civil liberties.
In May 2010, as the ink dried on the coalition agreement, Prime Minister David Cameron said more action was needed to protect consumers, particularly the most vulnerable.
That’s presumably why – in yet another cost-cutting exercise dressed up as simplification – it has now scrapped the consumer watchdog.
Consumer Focus was established four years ago as a new state-funded body. Over the coming years its responsibilities will transfer to Citizens Advice – a charity, don’t forget – which will now be a one-stop shop for consumer issues.
Meanwhile, much of the work of the OFT, which in recent years has led the way in challenges such as the fights against unfair overdraft fees and airline card charges, will be handed to local authority trading officers more used to clamping down on small-scale rogue traders.
Consumer Focus has a role that doesn’t involve taking on complaints from individuals. But it has been very effective in taking the consumer argument to those in power, not least regulators such as Ofgem, and has saved consumers more than £500 million in less than four years.
In seeking to justify its latest spending cut as a necessary streamlining operation, the government claimed that people have for too long been unsure where to turn for advice and support. There is no evidence to substantiate that claim. Public awareness of Citizens Advice is high, and understanding of what it does – and doesn’t do – is clear. The same goes for Consumer Focus and the OFT.
Citizens Advice is to get an extra £10m a year in state funding to take on its new responsibilities. It suffered funding cuts of 9 per cent in the last tax year and bureaux finances are under growing pressure at a time when demand for their services is on the rise.
Citizens Advice has long needed greater resources to support the invaluable work of its bureaux. Citizens Advice Scotland was approached for help every minute of every day in the 2010-11 financial year, its figures show, thanks largely to a sharp rise in debt issues.
Landing it with entirely new responsibilities is not what it needs, however – not least because there’s a huge difference between advice and advocacy.
Where Consumer Focus sought to challenge regulators such as Ofcom and Ofgem on issues of consumer interest, Citizens Advice primarily helps people by providing free guidance.
The Consumer Focus work isn’t being taken on by individual bureaux directly and the charity seems confident that it won’t affect its advisers.
But in the long term its effectiveness in helping the growing number of people needing advice on debt and other financial issues will inevitably suffer as a result of this ill-advised skake-up, leaving vulnerable consumers with even less support at a time when the government is stripping millions of their rights and benefits.