LONDON: David Cameron is under fire. The British prime minister is accused of making up energy policy in the middle of the rough and tumble of parliamentary questions. That may be less than ideal. But it is better to improvise than fail to speak out against abuse. Cameron is right to highlight the ugly sides of capitalism.
UK energy and utility companies, roundly criticised by the prime minister, certainly have a case to answer. There are estimated to be more than four hundred different tariffs offered by the UK's energy utilities.
That over-abundance gives providers ample chance to bemuse. Choice - which ought to be good for competition - too often morphs into befuddlement which acts against consumer interests.
In sectors as different as telecoms and finance, confusion hinders the search for keen pricing and efficient service. Bewildering variations make it all but impossible to make meaningful judgments about the relative merits of rival mobile phone tariffs. Banks' savings and mortgage products, sold at attractive initial rates, too often come with painful stings in the tail.
Payment protection insurance (PPI) policies sold in the UK became a scandal by taking unfair advantage of consumers. The products looked like they would help in times of financial stress. No doubt some people did find value. But the size of compensation bills now stacking up suggests banks, including Barclays which increased its provisioning by an additional 700 million pounds on Oct. 18, gave most people woefully poor value.
The authorities, it is true, are keeping operators under pressure. Ofgem, the UK energy watchdog, said on Oct. 19 that it wants to see a "simpler, clearer and fairer" tariff regime that also promotes keener competition. Consumers also help themselves and, in the age of web-based information, are better equipped to do so - though this may not help the older, poorer and less savvy.
Product providers also respond to such pressures. They ought to have the common sense to appreciate the value of treating customers fairly, and raise their games. Governments, however, have the power to champion the cause of consumers too. Cameron is right to strike.
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