6th July 2022

The impact of Trading Standards

Consumer confidence has been on a steady decline, with things only set to get worse. What role does Trading Standards play in giving the economy a jump-start?

By John Herriman
Chief Executive, CTSI
We have to recognise that for the system to operate effectively it needs all the components – national, regional and local – to work together

In many of my conversations with those outside of Trading Standards there is often a narrow and seemingly stereotypical view of the work of the profession. That is a view of the role being solely about enforcement activity. The reality as we know is very different, with many Trading Standards services pushing a much broader and very successful prevention agenda tuned into their Local Authority’s needs. And we must not forget the role of Trading Standards professionals who are working in other sectors, from Government through to private business and not-for-profit, all driving the consumer protection mission and purpose.

I think the role of Trading Standards is still underplayed because ultimately we help to ensure the consumer confidence that is critical to the success of the UK economy which, as we all know, is built on consumer behaviour. This was brought into sharp focus recently with the publication of the Government’s Consumer Confidence Survey. Produced every three years, this one being 2020-21, it showed consumer detriment was at a staggering £54.2bn, up by £4bn on the previous survey. The harsh reality is that since this survey was completed the economic situation has become more challenging and consumers have been facing even greater risks. The likelihood is that consumer detriment must now therefore be running at an even higher figure, all of which impacts on consumer confidence.

It has been interesting to see over the past few weeks a building narrative in the media about falling levels of consumer confidence. This is based on the very obvious cost-of-living crisis where prices of essentials have rocketed. It is also down to product and service availability, evidenced by flight cancellations for example, as well as increasing levels of concern about rising interest rates. Levels of confidence in April, according to researcher GfK, fell for the fifth month running, and the YouGov/CEBR Consumer Confidence Index has reported similar declines. The importance of this is that consumer confidence has been steadily falling for months and is now at its lowest level since the 2008 crisis according to GfK.

What we have also just seen, as reported by the CMA, is that households are now being hit by the impact of reduced competition. The end result is that that companies that are being ineffectively regulated are marking up prices by as much as 35% with little or no consequence to their actions. The CMA is flagging a concentrating of markets with fewer providers, from energy through to other essential services, that have a particularly hard impact on the most vulnerable and poorest in society. This is a group that has already been hit by the longer-term social and economic consequences of the pandemic, so the new challenges add another layer of pain for them to deal with. We also know that in times of economic crisis the likelihood of risk to consumers increases and we are seeing it now.

Trading Standards professionals know consumer behaviour better than anyone because they deal with the impacts of harm on a daily basis, as well as supporting legitimate business as they seek to ensure their customers are protected – what is good for consumers is also good for business.

Trading Standards professionals operate at every level in every layer of the system protecting consumers, from frontline services to regional coordination and both national and devolved nation level. That is alongside those Trading Standards professionals who work in business and the not-for-profit sectors. This collective group, bound by the single social purpose to protect the public, have faced increasing challenges to the regulatory world they operate in but have stayed true to their mission regardless.

It is of course this layered defence system, made up of consumer protection professionals protecting consumers, that we are reflecting in our new Vision for CTSI. In this we recognise that in a complex and dynamic consumer protection landscape it has never been more important to have a strong professional body that is able to support members representing every facet of the work of Trading Standards. Now is also the time, with falling consumer confidence, when they are really needed and Government should be placing greater emphasis on the collective critical role they play.

Joined-up thinking

As we look to the future and seek to build a consumer protection system that is world leading post-EU Exit, we have to recognise that for the system to operate effectively it needs all the components – national, regional and local – to work together. We must also recognise that when one element is unable to the others will be less effective too – the national cannot work without the local. Of course, our role in Trading Standards will not cover all the issues affecting consumer confidence such as price rises or shortage of goods, but we do play an absolutely critical role protecting consumers from everything from product safety through to scams.

Against this backdrop the recent Government response to the Command Paper was good at one level, because it seeks to bring the law up to date for e-commerce and to give increased powers to the CMA as well as other positive change such as increasing the impact of administrative schemes and support for business to protect customers. All of these represent progress and will provide better redress for consumers, which should in turn help to protect consumer confidence.

The Command Paper response was less effective however – in fact it was somewhat underwhelming – in dealing with what happens at the regional and local level, especially after a decade of funding cuts. It naively assumes that the administrative and other mechanisms it proposes will deal with the increasing issues consumers face there. They won’t. Nor did it respond to calls from business membership organisations like the BRC for the need for increased local Trading Standards activity to ensure a level playing field for businesses.

Protecting consumers at the local, regional and devolved nation level happens as a result of the interplay of all of the different layers of the consumer protection eco-system operating across all sectors. However, one thing is certain: it needs well-resourced and sustainable frontline Trading Standards services.

We now also know what can happen when the Trading Standards resources are put in place, as evidenced in Northern Ireland, which has seen an increase in capacity as a result of the Northern Ireland Protocol. As a result, consumers have realised they now have more effective redress and are increasingly reporting the increasing harms they face. This in turn means Trading Standards teams are able to tackle them, which in turn leads to increased consumer confidence. This is proof, if it were ever needed, that the model works very effectively when it is given the right support. It also indicates what we need to apply elsewhere, because the rising risks facing consumers in Northern Ireland are likely to be representative of those faced by consumers in England, Scotland and Wales as well.

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