---

Confident Consumers

It is a mixture of both. The Information Commissioner’s department is snowed under with freedom of information inquiries, so he may well have a resource problem. If he had effective resources, he might be able to make use of the sanctions and fines. However, as fines have not been levied, he might need more powers to make it easier to impose sanctions. I have a worry about the regulation of financial services. There have been attempts to protect consumers from buying products that are not suitable, or do not deliver what is expected, and to ensure that consumers are informed. However, as financial products become more effectively regulated, it is possible to link them more imaginatively to products that are less regulated. Financial products for buy-to-let might be well regulated, but the information that a person gets about the underlying property, such as its value and the likely expectations built into the product, might well be less regulated and effectively delivered. As the world becomes ever more complex, it is important that regulators are able to see beyond the part of a product that they are regulating and examine the underlying substance of what is being sold to the consumer so that consumers can make informed and effective decisions. We could, as a nanny state, stop people from making their own choices, but we should not do that. If people want to expose themselves to high-risk property speculation, they should be able to do so, but they should do that in an informed way, with the knowledge that the underlying product is at risk. The Government have not only the role of enforcement and ensuring that the right regulations and systems are in place, but the fundamental role of setting an example through the way in which they deal with consumers. A classic example of the way in which the Government are setting a bad example is the Post Office card account. Consumers took out the account in good faith and the belief that it would be a permanent product. They did not know that behind the scenes the Department for Work and Pensions had always assumed that the accounts would come to an end in 2010. The Government preach to the private sector that they should treat customers in an open and transparent way, but they are setting a poor example. The Minister talked about the danger of over-indebtedness. The Government need to understand that many people use the card account specifically to avoid the risk of over-indebtedness. Many such people have a bank account for savings, but choose to use the card account for their regular budgeting, in part because they know that they are at absolutely no risk of being exposed to charges, or £20 or £30 letters from the bank to tell them that they are overdrawn. The preferable option would be to keep the card account, but if the Government are not going to, they must ensure that there is a Post Office product in place that offers the same protection from indebtedness as the card account. The Government could have given a lead to industry with the way in which they treated the ombudsman’s report on pensions. However, given the way in which they rejected the report quickly and summarily, what kind of example did they set to the wider industry on how it should respond to an ombudsman service, which is the Government’s preferred solution to ensure that there is effective dispute resolution?