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Thursday 23 November 2017

Charlie Weston: Pussy-footing regulators are costing us all a fortune

Charlie Weston tweets at @CWeston_Indo
Charlie Weston tweets at @CWeston_Indo
Charlie Weston

Charlie Weston

The list of goods and services that consumers in this country are getting fleeced on is long - and getting longer.

Motor insurance, pharmacy prices for the half of the population that does not have a medical card, electricity and gas tariffs, rents, variable mortgage rates, childcare costs, and petrol and diesel prices are just some of the items that we are paying too much for every day.

The reasons for the pillaging of our pockets to pay the high costs of these goods and services are sometimes complex. But often the reason is simply because companies can get away with it.

There are many reasons families are being asked to pay around €300 more for motor insurance this year. But mismanagement by the insurers and regulatory failures are among the main reasons. And the net result is that consumers are being asked to bail-out a troubled sector.

The ESB made operating profits of €635m last year, yet consumers have only seen annual bills fall by €29 at a time when wholesale gas prices have fallen by 44pc. With 1.2 million residential customers, the ESB plays a big role as a price-setter for its rivals.

For the most part, the gouging of consumers has to do with poor levels of competition and pussy-cat regulators.

On the surface we are well served by regulators, funded at a cost of millions of euro by the taxpayer.

On the telecoms side there is ComReg; with the Commission for Energy Regulation looking at the electricity and gas markets; banks, insurers and brokers are regulated by the Central Bank; with the Competition and Consumer Protection Commission in place to look out for consumers. For those with financial complaints, there is the Financial Services Ombudsman.

However, what we get are poodles rather than the intrusive and robust regulation we were promised by former Central Bank regulator Matthew Elderfield after the banks collapsed.

The regulators will argue that they are hamstrung by legislation, have funding problems, or have been rendered toothless by politicians who use them as a mudguard to deflect attention from themselves.

Whatever the reason, our regulators are so tame, the bottom line is that consumers are paying far more than we need to be for items that we find it hard to avoid buying.

The failure of the last government to grasp the need to control over-charging is one of the reasons it lost so many seats. Whoever forms the new government should realise that voters will no longer tolerate a situation where consumer interests are not taken seriously in this country.

Sunday Indo Business

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