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Wednesday, 1 March, 2000, 08:31 GMT
Byers looks to hit rip-off Britain
Volvo admitted price-fixing
By BBC News Online's political correspondent Nick Assinder

The idea of new laws to protect consumers from unscrupulous businessmen creating a "rip off Britain" appears a classic Labour move.

Trade Secretary Stephen Byers must have welcomed it with open arms when he started his job - probably seeing himself as a champion of the people.

But, as the Competition Act finally comes into force, the jury is still very much out over whether or not this legislation will produce great benefits for ordinary people.

There is no doubt that British consumers have the impression they are regularly being ripped off by international cartels using cynical price-fixing measures to steal the last penny out of their wallets.

And there have been some infamous examples where these fears have been confirmed.

Only last year the Swedish car giant Volvo admitted price-fixing in Britain but escaped any punishment because there were no available powers.

More recently the banks have come under fire over charges for customers using competitors' cash machines.

And there have been ongoing rows over price fixing in the construction and fine arts sectors.

Tory proposal

If the new act - originally introduced by the last Tory government - allows future action to be taken against such alleged stitch-ups, then few will complain.

Mr Byers recently declared: " Price-fixing by cartels hits ordinary people in the pocket. It means lower quality at higher prices. The vast majority of businesses which work so hard to compete also deserve better protection from the few that cheat."

His message was swiftly welcomed by consumer groups and ordinary punters. But the proof of the pudding will, as ever, be in the eating.

There are widespread fears that the measures will have little real effect on some of the larger international businesses, but could hit big domestic companies who are unsure of their position under the new laws.

Alienating business

And, potentially more importantly for Mr Byers and the prime minister, the laws could easily alienate exactly the people they have spent the last few years desperately trying to win over.

All Gordon Brown's work on the City's rubber chicken circuit could easily be blown away if the new laws are seen as a return to Old Labour style interference and antipathy towards business.

There are also worries that the measures could even lead to job losses.

This is not because jobs are being created by rip-off merchants operating price-fixing cartels but, again, because smaller companies may be hit by confusing new regulations.

Supporters, however, insist that the government can only reap huge rewards from any measures that appear to address the widely perceived view that British consumers are being taken for a ride.

And, in politics, impressions usually count for more than reality.

See also:

01 Mar 00 | Business
01 Mar 00 | Business
25 Feb 00 | Business
29 Feb 00 | Business
29 Feb 00 | Business
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