How to Make Companies Act with Integrity

When considering private sector regulation it is sometimes asserted by vested interests and their allies in parliament that competition from a state owned enterprise, or one that was operated by what remains of Local Government, would be unfair to the rest. But as the continued ruthless exploitation of consumers demonstrates, an effect on the rest is precisely what is needed.

The financial barrow boys who misled the country and dragged down the economy - and who have since had further shameful practices exposed -are not alone. This ‘industry’ is just one example of the unprincipled way in which private sector outfits now operate. Effective action – not simply cosmetic – needs to be taken if the interests of ordinary people are to be brought back to the fore. Government promises and procrastination until anger over the latest outrage subsides will not do.

‘Competition’ has come to mean little more than competition for maximum profit by whatever means. These include misusing the loyalty of longstanding – usually elderly – customers and by the use of complex charging schemes designed to confuse. In banking there is the common practice of slipping people into accounts with even more derisory rates of interest when bonds mature and salami slicing interest in ISAs so there’s hardly any difference to taxed accounts.

Creeping cartelisation is a feature of a number of other so-called competitive industries too – witness the power companies managing their latest round of price hikes. The regulators range from inadequate to useless. Orthodox consumer groups complaining into the ether and taking little action have also proved to be ineffective so it is good to see some direct action taking place.

Governments, not infrequently ideologically driven, not wanting to upset important political donors, do as little as they think they can get away with (and then complain about ‘apathy’ and low turnouts in elections). Unmitigated ‘competition’, meaning little more these days than an economic free-for-all, is well past its sell-by date.

But there is a way of making finance, fuel, power and other industries heed the public interest and behave with a measure of integrity. If each of these sectors had a publicly owned firm within it acting as an exemplar, treating people in a respectful, honest and straightforward fashion rather than merely as profit fodder this would introduce a form of competition that is worthwhile to society as a whole. It would offer security and fairness to ordinary people, presently suffering relentless abuse by commercial predators.

As I’ve often suggested, there would be no better place to start than with the recreation of Municipal Banks – in so far as the Government would still allow fully-fledged Municipal Banks to operate in a meaningful way. Once the success of this was demonstrated we could then move on to other areas, starting with the railways and the franchised companies’ love of cancellations, outrageous fare hikes, complex pricing schemes and overcrowded carriages.