Labour leader Ed Miliband says he would introduce a new Consumer Bill to give the Financial Conduct Authority powers to stop “rip-off surcharges” by banks and pension companies.
Speaking at an event in London ahead of this week’s local elections, Miliband laid out what the party would announce in next week’s Queen’s Speech if it were in power.
He said: “Labour’s Consumer Bill would give new powers to the Financial Conduct Authority and Competition and Markets Authority to stop rip-off surcharges by banks, low-cost airlines and pension firms.”
Under current proposals the FCA is intended to be a “value for money” regulator. It will not directly regulate prices but will try to spot consumer detriment and flaws in competition by looking at “comparative prices”.
In February, shadow Treasury financial secretary Chris Leslie said he wanted the FCA to regularly review product pricing and make recommendations to ministers if it identifies a need for intervention.
Hargreaves Lansdown head of pensions research Tom McPhail says most pensions are good value for money and that additional undisclosed costs mainly relate to the buying and selling of investments and regulation does not require them to be disclosed.
He adds: “Ironically one the most significant undisclosed charges on pensions is the stamp duty levied on share purchases. This money goes straight to the government. Is Ed Miliband proposing to scrap this tax charge? If so I think we should be told.
“It seems you do not have to be posh to be out of touch.”
Miliband first raised the issue of pension fees and bank charges in January as part of an attack on “rip-off” Britain. He warned against “underhand and predatory” practices and said if pension charges do not come down he would push for them to be capped, though the practicality of doing so was questioned by advisers.
Miliband also said this morning that the party would reverse the cut in top rate income tax to 45p and use the money to help those hit by the “granny tax”.