Hammond Budget ban on baffling small print
COMPANIES that use confusing and misleading small print will face a government crackdown as part of a package of measures to protect consumers in next week’s Budget.
Philip Hammond will announce plans for new legislation designed to eliminate confusing jargon used in “terms and conditions” sections, which are in some cases longer than Shakespeare plays.
He will also introduce new powers to hit companies that mislead consumers with fines, which for the worst offenders could be worth as much as 10 per cent of their annual turnover.
The planned new legislation will be aimed primarily at mobile phone providers, online shops, banks and other financial institutions, but all consumer-facing companies could be affected.
Under the plans, they will be told to shorten their terms and conditions and summarise them in a handful of bulletpoints or face being named and shamed in “league tables” of bad practice.
Firms will be banned from taking customers’ debit or credit card details for so-called “free trials”, and they will be fined for promoting “fake deals” that offer customers misleading discounts.
Mr Hammond will make the announcement in his Budget on Wednesday, his first as Chancellor.
He is also expected to say that Britain’s economy has grown at a significantly faster rate than expected in the wake of the EU referendum.
The improvement in Britain’s economy means that Mr Hammond will borrow around £12 billion less than expected, enabling him to provide more money for social care and relief for small firms facing significant hikes in business rates.
Officials have emphasised, however, that the Chancellor wants to keep a tight rein on spending and said that there is no “pot of money”.
Mr Hammond is expected to announce further cuts in public spending as he prepares the economy for Brexit. Other plans that are being considered by ministers but could be delayed until after the Budget include a scrappage scheme for diesel cars and death taxes to fund social care.
The Government’s crackdown on small print will address concern that terms and conditions sections are now so long and full of technical jargon that customers cannot be expected to read or understand them.
An investigation by Which?, the consumer watchdog, found that those used by insurance companies run to 38,000 words – longer than Shakespeare’s
Hamlet or Romeo and Juliet. James Da- ley, co-director at Fairer Finance which has campaigned for a small-print crackdown, said: “These new rules have the potential to reset businesses’ relationship with consumers, ensuring that customers only part with their money for goods and services that they want and understand.”
Ministers and consumer groups are concerned firms are using small print to automatically tie people into long contracts after free trials or leave them open to unexpected fees.
THE world’s biggest tobacco company has for the first time asked to be taxed more – claiming it will encourage smokers to switch to healthier alternatives.
Philip Morris, which makes brands such as Marlboro, said it backed a rise in taxes on its cigarettes as part of its plan to move to a “smoke-free future”. In a Budget submission sent this week to Philip Hammond, the Chancellor, the firm said “we support proportionate tax increases”.
Nicolite e-cigarettes and Iqos cigarettes – which heat, rather than burn the tobacco so are thought to carry less risk of cancer – are cheaper and attract lower excise duty and VAT.