Business

Championing the consumer goes local

BBC business editor Robert Peston on merging the Office of Fair Trading and Competition Commission

I disclosed here last month that the Office of Fair Trading and Competition Commission would be merging to form a super competition regulator.

That will be confirmed later this morning.

And what will also be disclosed is that most of the OFT's consumer protection functions will be stripped out - in a way that the coalition government hopes will be seen as a manifestation of its determination to devolve power to local bodies.

So the Citizens Advice Bureau will be given the OFT consumer complaints line, Consumer Direct.

And the CAB will take on the OFT's role in championing consumers in their relations with the big energy and telecoms companies.

But when it comes to the OFT's highest profile work, such as challenging the way the banks charge for unauthorised overdrafts or the way that low cost airlines show their prices, that will devolve to local Trading Standards offices.

As for the OFT's consumer credit responsibilities, they'll go to the new Consumer Protection and Markets Authority that is being created from the break up of the Financial Services Authority.

It's a huge reform agenda and one which seems in tune with David Cameron's localism and Big Society visions. Does it make sense?

Well I'm not sure the consumer lobby groups, such as Which, or the business lobby, including the CBI, will be overjoyed.

Because the big question is whether local trading standards offices will have the resources or expertise to really challenge the behaviour of giant businesses.

There's a risk of balkanisation, that sees tight restrictions imposed on smaller companies but fails to check the anti consumer activities of the biggest businesses.

Also, it's slightly odd that the CAB will be asked to fight for consumers in their battles over gas bills, but not in their struggles over bank charges - where the CAB has tons of expertise.

And it's not clear that the CAB is the best place for Consumer Direct - in that 20% of the complaints it receives result in enforcement action by trading standards and the OFT.

The Business Department will publish a consultation paper on all this. I would expect something of a backlash against the blueprint and I doubt all of it will go through. ‬‪

You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.

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