Introduction

On 22 July, the UK Government published a White Paper "Modern Markets: Confident Consumers" which set out a strategic framework for the development of consumer policy in the United Kingdom. The White Paper proposed policies to help consumers get a fair deal in open markets and, at the same time, boost the competitiveness of UK businesses. There is a virtuous circle between well-informed and demanding consumers and strong businesses, which the White Paper sought to reinforce. The drive for fairness and efficiency were not contradictory.

The starting point was that open, competitive markets offered the best guarantee of a good deal for consumers. The UK Government sought to drive vigorous competition by building on the tough sanctions and investigative powers introduced by the Competition Act 1998. The Government also sought to empower consumers to look after their own interests through better education, information and advice. A new regime was proposed for codes of practice, based on core principles described in the White Paper and hallmarking by the Office of Fair Trading (OFT). The White Paper set out targeted enforcement against rogue traders (including powers to ban continual offenders from trading) while reducing burdens on honest businesses to allow them to focus on giving good customer care. The government proposed modernising the trading standards service, by encouraging better collaboration between authorities and providing more resources for training. Finally, the government wanted to bring consumers to the heart of the policy-making process. It set up a committee, formed of consumer, business and enforcement groups, to provide independent advice to Ministers and recommend key areas for action. It also allocated more money for research to identify the concerns, now and in the future.

Budget allocation to consumer questions

In 1999/2000, the Government contributed GBP 23.6 million to consumer bodies [the National Consumer Council, the National Association of Citizens’ Advice Bureaux (NACAB), Citizens Advice Scotland (CAS) and the National Industry Consumer Councils], of which GBP 16.1 million went to NACAB and CAS. Local authority funding of local CABs in 1998/99 was GBP 48.7 million (latest figures available).

Food Standards Agency

A Bill to establish a UK Food Standards Agency was introduced in Parliament in June and received Royal Assent in November. The Food Standards Act 1999 establishes the Agency from 1 April 2000. Its functions are: to develop policy and advise Health Ministers and other public authorities; to provide advice and information to the public; to monitor and set standards for food law enforcement; and to keep under review scientific and other developments relevant to its remit.

Financial Services Authority

The Financial Services Authority (FSA) will soon become the single regulator for the UK financial services industry. The FSA will have statutory objectives to promote public awareness and to secure appropriate consumer protection.

The Office of Gas and Electricity Markets

The offices of the electricity and gas regulators have been brought together to create Ofgem.

Consumer Credit Licensing Regime

The Consumer White Paper committed the Department of Trade and Industry (DTI) to a review of the consumer credit licensing regime established under the Consumer Credit Act 1974. The aim of the review is to determine whether OFT’s resources should be more effectively targeted to deal with real abuses and less on the mechanics of the system.

The Unfair Terms in Consumer Contracts Regulations

In October, new Regulations came into force which extend the power to take action against unfair contract terms to trading standards authorities, statutory industry regulators and a private consumer organisation (Consumers’ Association). Previously only the OFT could prevent the continued use of such terms.

Consumer Credit

As well as implementing the latest amendment to the EU Directive on consumer credit (98/7/EC) to amend the formula used in calculating the way the annual percentage rate of charge (APR) is calculated for all loan agreements, the United Kingdom also supplemented this for certain low-start and discounted mortgage agreements by introducing a requirement for this calculation to take into account the move to the standard variable rate once the discount period ends.

Distance Selling

In November DTI published a second consultation document seeking further views on proposals to implement the EU Directive on the protection of consumers in respect of distance contracts (Directive 97/7/EC) which has to be implemented by 4 June 2000.

Codes of Practice

In the Consumer White Paper, the government reiterated its belief that effective codes of practice will benefit consumers and business alike. Working with consumer groups, business and local authorities the government has provided core principles, that will act as the basis for effective codes of practice. OFT will be given powers to give a seal of approval to codes that embody these principles and this will enable consumers to easily recognise a good code.

Rogue Traders

In the Consumer White Paper, the government has proposed reform of existing law so as to give both OFT and Trading Standards Departments new powers to tackle rogue traders.

E-Commerce

The UK Government was involved in a variety of initiatives aimed at raising consumers' confidence of e-commerce. In particular, the Consumer White Paper announced that government was working with business and consumer organisations to develop a self-regulatory scheme, TrustUK, to accredit codes of conduct for e-commerce which met minimum standards and offered consumers good protection. In Europe, it has participated in negotiations on the E-Commerce Directive to ensure that the Directive provides a clear legal framework to aid consumer confidence. The Directive is expected to be adopted in 2000.

Price Marking

In November, DTI introduced legislation amending the price marking rules in shops to come into effect in March 2000. Goods offered for sale within a shop will have an easily identifiable price so that the consumer does not have to ask what it is. Also, unit pricing (indicating the price per kilogram or litre) of pre-packaged products sold by quantity was extended so that consumers can compare easily and accurately the prices of products in different types and sizes of container. Small shops are exempt.

Weights and Measures

In July, DTI issued a consultation paper about updating and simplifying regulatory controls on transactions in goods by weight or measure, with particular emphasis on packaged goods and draught beer. The proposals take into account the considerable body of EU legislation on packaged goods and the recommendations of the International Organisation for Legal Metrology (OIML) for the labelling and net content of packages.

Review of Personal Pensions Mis-selling

The Government aims to ensure that the victims of the personal pensions mis-selling scandal of the late 1980s and early 1990s receive fair redress as rapidly as possible. Individual firms which may be responsible for mis-selling are required by the financial services regulators to review their sales of personal pensions. By the end of 1999, over GBP 3 billion of redress had been paid to the victims of mis-selling. The Government hopes that all phases of the review will be completed by June 2002.

Free-Standing Additional Voluntary Contributions (FSAVCs)

FSAVCs are a form of pension top up. In August, the regulator warned investors that they may have been mis-sold and has since been considering how the problem of FSAVC mis-selling could best be addressed.

Financial Services

The FSA’s Consumer Relations Division has started work to promote public understanding by publishing consumer guides and factsheets, setting up a consumer helpline and launching a Consumerhelp Web site. Progress has been made on long-term education of young people, and personal finance will in future be included in the national curriculum in schools. Good progress has been made in establishing the new Financial Ombudsman Service and Financial Services Compensation Scheme, to replace existing fragmented arrangements.

Home Buying and Selling

In December 1998, following research that fewer than half of buyers and sellers were satisfied with the home-buying process, the UK Government published a consultation paper "The Key to Easier Home Buying and Selling". In October, the government announced proposals to simplify and speed up the home-buying process. The principal proposal is that sellers should be required to assemble a pack of prescribed information before marketing their home for sale. The proposal is currently being piloted.

Car Services Enquiry

In April OFT announced an inquiry into car servicing and repair to report in 2000.

Electricity and Gas

The response to the "Future of Gas and Electricity Regulation" was published in October and outlined the government’s proposals for legislation of the utilities.

Telecommunications

The Telecommunications (Data Protection and Privacy) Regulations 1999 require the Director General of Telecommunications (DGT) to set up opt-out schemes in relation to unsolicited direct marketing by phone and fax. Following a competitive tender held in February 1999, the DGT appointed the Direct Marketing Association to set up and manage these schemes. The schemes became operational in early May 1999.

A Web site was launched in December by five of the main telephone companies providing direct to the home telecoms services for UK residential consumers with the endorsement of the regulator OFTEL. The service enables the consumer to compare their phone bill with other participating operators in their area. OFTEL is also encouraging the four mobile network operators in the United Kingdom to publish comparable quality of service information. The first results were published in October.

Water

In 1999, the Office of Water Services (Ofwat) completed its periodic review of water charges for England and Wales: water bills across England and Wales are set to be reduced by an average of 12.3% in April 2000. Ofwat has also completed a review of the Guaranteed Standards Scheme, which awards compensation to customers for basic failures in service. It has recommended to the Secretary of State that service standards should be tightened and compensation for some service failures should be increased.

The Water Industry Act 1999 came into force in June, providing: i) the end of disconnection for non-payment of household bills; ii) the installation of water meters free of charge for domestic customers; and iii) new restrictions on when water companies may require domestic customers to have water meters. Ofwat has overseen the implementation of these new policies through the Director’s new power to approve water companies’ charges schemes

Consumer Advice

In its Consumer White Paper, the UK Government undertook to promote a more joined-up, quality assured network of consumer advice agencies. These agencies will be clearly badged so consumers will know where to go for reliable advice, information and practical help.

This initiative on consumer advice links with the government’s proposals for a Community Legal Service (CLS), which will be launched in April 2000. The aim of the CLS is to improve access to good quality legal and advice services so that people with potential or acute legal problems are aware of their rights and how to enforce them.

Consumer Education

DTI, in partnership with the Consumers’ Association, the Basic Skills Agency, FSA and the Department for Education and Employment, were successful in a bid for EU funding towards a project to improve consumer education. This project, entitled "Developing New Approaches for the Delivery of Consumer Skills and Knowledge to Adults and Young People", started in December and will run for 18 months.

OFT-Mencap Initiative

In September, OFT and Mencap, the United Kingdom’s largest learning disability charity, jointly launched a new booklet Your Rights when Shopping to give people with learning disabilities the confidence to complain about poor goods and services.

Civil Justice Reforms

The first phase of the Civil Justice reforms came into effect on April. The reforms based on Lord Woolf’s report "Access to Justice" aim to make the civil justice system simpler, less costly, quicker and more certain.

Environmental policies