Experts Call for Stronger Regulation to Combat Rip-Off Bills and Boost Economic Growth
Economists Andrew Sissons and John Springford have highlighted how the lack of competition and weak regulation in key services markets—including energy, telecoms, and personal finance—contributes to persistent inflation and harms consumers.
Their analysis points to issues such as information asymmetry and shrouding, where firms exploit consumer ignorance through complex contracts and hidden fees, leading to significant producer surplus captured by companies at consumers' expense.
The authors argue that regulation must be modernized and strengthened to reduce these inefficiencies, ensuring that savings benefit households and contribute to broader economic growth.
Among their proposed reforms are restricting or banning RPI-plus price increases, enabling consumers to cancel online subscriptions online, and limiting automatic contract renewals except for essential services like car insurance.
Sectors of concern include energy, mobile and broadband services, and insurance, particularly the prevalence of complex contracts with automatic price increases often linked to the Retail Price Index (RPI) since 2022.
The paper also notes Labour MP Rachel Reeves' focus on cost of living and regulatory reform, including possible VAT changes on energy, but stresses that stronger regulatory intervention is crucial to improve market functioning and economic growth.
They conclude that better-resourced, more interventionist regulators are essential to tighten competition and protect households and the economy from excessive charges and market distortions.
