The UK's productivity predicament is indeed a monumental pain for consumers, with many feeling swizzed by small print in their contracts, bamboozled by insurance products, or locked into subscriptions they signed up for by mistake. The root of the problem lies in the markets for key services where competition is limited, regulation ineffective, and market structures hurt consumers.
The Labour government has promised to tackle cost-of-living pressures through tax rises and measures like VAT cuts on energy bills. However, economists Andrew Sissons and John Springford argue that a more muscular approach is needed to make these markets work better for consumers and the economy.
They point out that lack of proper competition is a key driver of the UK's "sticky" inflation, particularly in services where goods drove post-Covid price increases. Rising wages, especially at lower ends of the scale, have also contributed to this issue.
The authors argue that regulation has failed to make these markets work for consumers, with limited competition, ineffective regulation, and problematic market structures causing problems. They highlight examples like energy and transport, where investment in net-zero transition and costly infrastructure upgrades are needed.
Sissons and Springford suggest that regulators need to be better resourced and more interventionist to make markets work better. Their proposals include restricting the use of price increase contracts pegged above the retail prices index (RPI) and introducing a new rule that allows consumers to cancel services online.
The authors also propose drawing up definitions of standard products, like plain vanilla insurance contracts, to allow companies to compete on the basis of price and service rather than small print. They argue that better regulation is needed to foster more dynamic markets for essential services, which will ultimately help stop consumers being shortchanged.
For Labour, this may mean a significant shift in its language on regulation, moving away from the laissez-faire playbook of the Tories. The government's proposed measures so far have focused on cost-cutting levers and tax rises, rather than more fundamental changes to regulation. However, it will take better regulation, not less, to make these markets work for consumers and drive economic growth.
The Labour government has promised to tackle cost-of-living pressures through tax rises and measures like VAT cuts on energy bills. However, economists Andrew Sissons and John Springford argue that a more muscular approach is needed to make these markets work better for consumers and the economy.
They point out that lack of proper competition is a key driver of the UK's "sticky" inflation, particularly in services where goods drove post-Covid price increases. Rising wages, especially at lower ends of the scale, have also contributed to this issue.
The authors argue that regulation has failed to make these markets work for consumers, with limited competition, ineffective regulation, and problematic market structures causing problems. They highlight examples like energy and transport, where investment in net-zero transition and costly infrastructure upgrades are needed.
Sissons and Springford suggest that regulators need to be better resourced and more interventionist to make markets work better. Their proposals include restricting the use of price increase contracts pegged above the retail prices index (RPI) and introducing a new rule that allows consumers to cancel services online.
The authors also propose drawing up definitions of standard products, like plain vanilla insurance contracts, to allow companies to compete on the basis of price and service rather than small print. They argue that better regulation is needed to foster more dynamic markets for essential services, which will ultimately help stop consumers being shortchanged.
For Labour, this may mean a significant shift in its language on regulation, moving away from the laissez-faire playbook of the Tories. The government's proposed measures so far have focused on cost-cutting levers and tax rises, rather than more fundamental changes to regulation. However, it will take better regulation, not less, to make these markets work for consumers and drive economic growth.
I'm telling ya, the UK's productivity predicament is a real mess! 
According to data from the Office for National Statistics (ONS), the average Brit spends around £1,300 per year on energy bills alone 
. And it gets even worse when you consider that 75% of people are locked into contracts they didn't fully understand 
.
. That's crazy! 
Their proposed solutions, like restricting price increase contracts and introducing online cancellation options, would make a huge difference.
... I mean, you gotta balance making things work for the economy with helping out the people who are struggling financially 
... And I'm not sure what to make of these proposals from Sissons and Springford, they sound kinda reasonable 
... Maybe we'll see some changes soon 
- Martin Luther King Jr.
It's like companies are intentionally trying to confuse us into signing away our rights. And don't even get me started on subscriptions... I mean, who hasn't accidentally clicked 'accept' when they meant to cancel? 
It's all about finding that sweet spot between letting businesses thrive and protecting consumers.
and don't even get me started on the energy bills - who needs that kind of stress in their life? 
.
It's about time regulators started putting consumers' interests first instead of just letting companies do whatever they want.
can't even get a decent deal without getting lost in tiny print? it's all about the money, man... governments need to step up their game & give regulators some serious juice 
like restrictions on those awful price increase contracts and online cancellation rules 
. and wat about the tax rises? thats just another way to suck more cash from our pockets. we need to wake up, people! 
. They need to take a step back and look at the bigger picture - or rather, the lack of it. The government's all talk no action on regulation... that's just enabling companies to screw consumers over even more 
.
. I mean, tax rises might help a bit, but that's just a band-aid on a bigger problem. We need more than just a few tweaks to regulation - we need a complete overhaul 
. We need more market pressure, more regulation that's actually gonna help us out 
That's a disaster waiting to happen if we don't do something about it ASAP 
. Investing in net-zero transition and infrastructure upgrades is not just a nice-to-have - it's a must-have 
. Let's get serious about this, folks!
. But have you ever stopped to consider that maybe we're the ones who need to change? I know it's easy to blame the market or the government when things go wrong. But what if we're all just stuck in this cycle of consumerism and competition? We want cheaper energy, better insurance, but are we willing to dig deeper and find out why these prices are so high? 
. It's like, I get it, companies need to make a living but shouldn't we be getting better value for our money? 
And the concept of standard products with clear definitions? Genius! 
We need better regulation, folks!