Tuesday 23 January 2018

Poor protection from pussyfooting regulators one reason cost of living is so high here

'In this country we do not do proper regulation or consumer protection. We do pussyfooting. No wonder we have the second highest prices in the EU.' Stock Image
'In this country we do not do proper regulation or consumer protection. We do pussyfooting. No wonder we have the second highest prices in the EU.' Stock Image
Charlie Weston

Charlie Weston

Is it any wonder consumers are cynical about energy companies, banks, insurers, airlines, and their regulators? Businesses that feel they are unfairly criticised need to pause and consider just how unreasonable their actions are at times. Take energy companies. In the last three years wholesale gas and electricity prices were at record lows. Wholesale gas prices were down 40pc in March compared with the same month a year previously.

Did we get large cuts in our electricity and gas bills to reflect this? Not a bit of it. We got miserly 2pc and 3pc cuts, and these reductions were slow in coming. Fast forward to now and energy companies have reacted with incredible speed to a change in direction in wholesale gas prices. SSE Airtricity and Bord Gáis kicked off the new price-hiking season with rises for consumers in electricity and gas prices being announced within hours of each other. And they were far higher rises than any of the measly reductions we got in the last three years, with some prices going up by 6pc.

And Electric Ireland joined them on Friday, announcing a 4pc electricity price increase that comes into effect next February.

Consumer energy prices are not regulated here, but the energy regulator has been blamed by the suppliers for hiking some of the costs that providers face. Maybe we should regulate consumer prices. Ryanair has disgraced itself in its dealings with consumers affected by flight cancellations. It took the Civil Aviation Authority in the UK to put manners on it.

The authority threatened "enforcement action" against Ryanair for failing to give customers accurate information about their rights. Banks and insurance companies have been involved in the wholesale rip-off of customers. Variable rates are outrageously high, and motor insurers are exploiting drivers to help them rectify their management mistakes.

The Central Bank does not take its role of protecting consumers seriously. Allowing banks to miss a deadline to ensure they refund tracker mortgage customers who were overcharged, after giving them two years, indicates that consumer protection is way down the list of priorities.

In this country we do not do proper regulation or consumer protection. We do pussyfooting. No wonder we have the second highest prices in the EU. Tuesday's Budget will have middle-income earners hoping for some relief from the financial pressure of having to keep the show on the road.

But any modest gains it delivers will be wiped out by the sky-high cost of living.

The small nature of our economy, poor levels of competition, high taxation and the power of vested interests combine to ensure that householders get poor value for money.

Sunday Indo Business

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business