Osborne’s blitz on rip-off bills

He’ll crack down on NINE industries We’ll get right to switch water firms

AN assault on rip- off Britain to increase competition and cut prices for everything from mobile phones and broadband, to water bills and school uniforms will be launched today. George Osborne is to unveil a 25-page ‘blueprint for a better deal’, which Treasury sources claimed last night could save the average family £470 a year.

Speaking ahead of the launch, the Chancellor said he was determined to ‘make markets work better for families’ by increasing competition, cutting red tape and driving down prices for essential items.

The initiative will look at cutting costs in nine key markets that account for about 40 per cent of the average household budget – equal to almost £ 10,000 a year. A Treasury source said: ‘Many of these bills are unavoidable so those with low incomes feel the burden the most – and can benefit most from a boost to competition that pushes prices down.’

Proposals include allowing businesses and families to switch their water supplier for the first time. Firms will win the right to switch from 2017, with the regulator Ofwat then being ordered to look at extending competition to households by 2020. Water companies have resisted competition for years, arguing that it is impracticable for consumers in one part of the country to buy their water from hundreds of miles away.

But the lack of competition has led to wide variations in bills. Families in Yorkshire pay an average of £360 a year, while those in the South-West pay £482, a third more. Government sources were unable to explain how switching suppliers would work, but said ministers wanted competition in the household sector by 2020.

Schools will be ordered to end relationships with monopoly suppliers and to base uniforms on items that can be ‘purchased cheaply’ in supermarkets or other clothing stores. Official guidance, which will be enshrined in law, warns school governing bodies to ‘give highest priority to the consideration of cost and value for money for parents’ when selecting uniforms.

Mobile phone firms will be required automatically to unlock customers’ handsets when their contracts expire to allow them to move to another provider. Some users are forced to pay up to £20 to unlock their phones, costing consumers more than £48 million a year.

Broadband providers will be forced to make it easier for consumers to understand the costs they are likely to face. Treasury sources said pricing in the industry ‘often lacks transparency’. The Advertising Standards Authority is investigating whether introductory rates are misleading consumers, who then face bills that can be £240 a year higher than the headline rate.

Ministers also plan to boost competition in the banking sector by encouraging new start-ups, in the hope that more consumers can be persuaded to switch.

And the Government will try to break the legal profession’s stranglehold on straightforward issues such as conveyancing and probate, making it easier for other professionals, such as accountancy and IT firms, to compete for work.

The initiative will also try to inject momentum into existing efforts to persuade people to look for savings by switching energy suppliers.

And it confirms plans announced by the Chancellor last week to end compensation for minor whiplash injuries – a move predicted to slash up to £50 off car insurance bills.

A new ‘ crown marketplace’, designed to make it easier for small businesses to compete for government procurement contracts worth £44 billion a year, will also be established.

Today’s announcement will also see ministers work with the consumer group Which? on a new campaign to persuade companies to make their terms and conditions easier to understand.

Mr Osborne said the moves would help end ‘market distortions’ that stifled competition and led to consumers paying higher bills.

‘This broad package of reforms will make markets work better for families,’ he said. ‘ Driving competition will improve choice for people and ensure they get a better deal. And cutting red tape will help businesses grow and thrive.’

‘Ensure they get a better deal’