16th September 2008
LABOUR CANDIDATE WANTS BETTER BIG BUSINESS REGULATION
In the wake of the latest crisis to hit the financial markets, Donna Hutton, Labour’s Parliamentary Candidate for Clwyd West constituency, has called for big business to be regulated more tightly. Early on Monday morning (15th September) it was announced America’s fourth biggest bank, Lehman Brothers, had failed.
Donna Hutton said:
“Some senior figures in the financial sector would have us believe Lehman Brothers Bank going bankrupt will not really affect us, as they only had corporate and rich clients. But they borrowed from other banks – who have our money – for their gambling stake, so there is bound to be a knock-on effect.
"Big business is clearly not regulated adequately, as the keep making huge profits at the expense of hard working families, but their methods can have a bad effect upon our lives. There are a lot of examples of this, such as:
- Banks’ gambling - having been happy to gamble with our money, many banks and financial institutions are now recouping their losses at our expense. Instead of passing on lower interest rates as intended by the Bank of England, they are keeping rates high to build up their reserves. We can all see the effect all this is having on the housing market – especially refusing to lend money affordably to first time buyers.
- Construction - 112 construction companies were accused earlier this year by the Office of Fair Trading of bid rigging for public contracts like schools and hospitals. This cartel may have cost the taxpayer £300m.
- Big supermarkets – they have been entrenching their position over recent years, squeezing out the opposition. They are now exploiting the “credit crunch” and may even be distorting the market, by changing what items are available or put on offer.
- Bank charges - the High Court has decided banks have been imposing unfair fees for things like bounced cheques, unauthorised overdrafts and unpaid direct debits. This has been a huge source of income, with fees profits estimated at £8.6b over last six years.
- Energy profits up – these have risen because of higher demand which has caused huge speculation. And without doing any more work or making any extra investments, energy companies are making massive profits. BP alone makes £25,000 profit a minute and British Gas parent Centrica’s profits went up by 40%.
- Energy prices still up - although gas prices fell in 2007, Consumer group Energywatch pointed out energy companies did not pass on the full reduction to householders and has called for a Competition Commission investigation. And recent petrol price hikes were not mirrored in full by reductions when oil prices fell again.
- Telecoms sharp practices – for instance, it seems it is not unlawful for your telephone service to effectively be pinched by a company without your say so, called “slamming”. But individual complaints to the regulator are not pursued, instead they say they keep an eye on “trends” in complaints!
- Utilities incompetence – have you ever tried to change address, get a bill corrected or change supplier for any of your utilities? Whilst there must be people doing good work out there, the overwhelming experience of consumers is of disinterest or incompetence.
“Ordinary consumers are largely unprotected against these financial giants. We are paying for their enormous profits and deserve to know they are playing fair, so I shall be calling for an overhaul of regulatory regimes wherever these affect us.”
ENDS.
FURTHER INFORMATION ON SOURCES:
- Construction cartel – Office of Fair Trading news, 17 April 2008
- Energy profits - Guardian, CNN 30/07/08, BBC Business News et al – BP half-year profits £6.7b
- Supermarkets – National Consumer Council news, 1st September 2008