In Rome with family, soaking up Italian for GCSEs – and watching the children having a go at Gladiator School. They don’t teach hand to hand combat in schools nowadays in quite this way. Wonder if I will have a go myself?

Reflections on the credit crunch

There is a lot of ‘I knew it would end in tears’ chat around the credit crunch at present, but less in-depth thinking about what it means and how to respond. Here are some points from conversations I have had in recent days:

  1. No-one is making an apology, but at the same time we may all be complicit, as we benefited as consumers from more extended and less expensive credit. Talking with Richard Lambert, CBI (who says “good luck to Consumer Focus in your early days!”), I floated the idea of a Truth and Reconciliation Commission on the credit crunch. We need to understand and not just condemn, or alternatively, just move on.
  2. The credit crunch was foreshadowed in the collapse of Enron, which was before a model of corporate success, but based on creative /illegal off-balance sheet accounting and disguised through charismatic leadership that was hard to question. But Enron had a whistleblower, which the credit crunch has not had. There are dissident economists who have been warning of risks for years, but they do not enjoy the protection and rights that whistleblowers now have. Perhaps we need, as a culture, to listen more to voices of dissent.
  3. One of the weaknesses of regulation has been that it has assumed that financial transactions between consenting professionals does not need the scrutiny and attention that financial deals with consumers attract. Those who work in financial markets are assumed to be alert to the risks. But what was missing, as one friend from Reuters argues, is God’s eye – in the sense that it was nobody’s role to have a look at the overall system. Regulators are not God, that much we know, but they ought to have an eye on the system overall and the incentives that led the professionals to stray.
  4. The fallout for you and I and the public at large could be awful, in the sense that the economy has been propped up high levels of employment, but with many having no savings to speak of and no real safety net, for example in public housing, is we see genuine economic distress. Annuity rates are falling for peole retiring now. Banks are busy withdrawing access to borrowing and, talking to John Fingleton of the OFT, we could see that mortgage costs may rocket in the same way that energy prices have. All of this adds up to millions of cases of what is essentially a personal credit crunch.
  5. If banks are too big to fail, and have the implicit guarantee of state protection, then we should argue that they have a reverse obligation to society, to provide payment and credit services on an equitable basis of access to all.

Welcome your views on this. I am away this week with family.

Christmas comes early?

One of the odd things about Christmas is that at the time you most want what you send to arrive on time, the quality goes down (as the volume goes up) so that paying for first class is a poor bet. I understand one or two other countries (Netherlands) offer a discount over the period as a result – do correct me if this is wrong, by the way. So, it is altogether good news (Santa early in at Royal Mail?) that Adam Crozier has asked the regulator for permission to drop some of the charges made when people are picking up mail from a Post Office if it couldn’t be delivered or fit through the letterbox.  To have to queue and then pay 50p for the privilege is not good for happy customers.

If you support the idea of a happier Christmas post, you can add your views by emailing Postcomm on

Shout to the top

Well, the outcome of our campaign to bring forward energy price cuts has paid some dividends – as at least companies are now saying that energy bills should fall. Just not yet.

I met Deirdre Hutton, Chair of the Food Standards Agency today. Apart from talking food policy, she recalled what she saw as her best days of consumer campaigning in the early 1990s. Along with some big steps forward, she recalled doctors, lawyers and local government all shouting at her! So, I was pleased then to go to the Local Government Association and get a warm welcome. What is more, they are very supportive of action on energy prices, having produced a report last month on energy company profits. Energy suppliers, they reveal, have dramatically increased their dividend payments to shareholders by £257 million over the last year despite claims that high profits are needed for re-investment in energy infrastructure. Dividend payments have risen from £1.378 billion in 2006 to £1.635 billion in 2007, a 19 per cent increase and equivalent to £75 per household.  

Lower energy prices? It’s worth a shout.

How to lose friends?

Every passing bus seems to parade the advert for the film How to Lose Friends and Alienate People – and it is a little bit how I feel. The advertising industry took deep exception to proposals I sent them to clean up marketing on children’s websites. One of the energy company CEOs stopped by today to say how the Telegraph headline today, where we call for prices to come down, is irresponsible (because people will get into more debt expecting it to happen, but companies can’t deliver until wholesale prices stay low longer) and now the Independent is reporting that we are lining up to clean up the mobile phone industry, which is all too right, but no doubt will lead to a good deal of corporate huff and puff.

The film, by the way, is written by the wonderful Toby Young. Toby is, in turn, the son of Michael (Lord Young of Dartington) who founded the National Consumer Council. Michael told me always to be persistent, always keep going, to make change, so that’s what I will do. I can only hope that we influence more than we alienate!

Recovery Plan for the Household Sector

We held a roundtable with civil society colleagues today at Consumer Focus 

from unions, thinktanks, consumer groups and ethical investment participants. Mick from Financial Inclusion Centre kicked off and what was clear was the sheer breadth of action that is required in terms of immediate support for consumers, like tackling mortgage arrears sensitively and maintaining access to credit; issues of regulation (e.g. ‘do you build up the FSA or carve it up?’ as one asked) and the role of investors in responsible practice. Peter Kenway described it as the need for a “Recovery Plan for the Household Sector”.

Why websites should be classed as advertising

I gave a speech to the AGM of NSPCC today – on a subject that I am passionate about, which is children’s rights in a commercial world. I argue that children’s websites should be classed as advertising and so subject to the rules of the Committee on Advertising Practice, and the Advertising Standards Authority. The idea that you can get away with anything in terms of marketing to children simply because it is online has surely had its day, because so much marketing has moved online. You could say the same for all commercial content on websites, but the case for action on behalf of children has to be a priority. I have written an open letter on behalf of Consumer Focus to the Advertising Association to ask nicely whether they will open the door to this.