Tony Blair condemned and promised to address what he called Rip-off Britain. That’s the same Tony Blair whose government greatly ramped up use of Private Finance Initiatives (PFI).
PFIs were an expensive wheeze dreamt up by the Tories in the1990s to involve the private sector in funding major public works. A 2018 report by the National Audit Office didn’t contain the words “rip -off” but implied as much. The report concluded PFI projects cost the taxpayer between 40% and 70% more than would have been the case had they been financed through government borrowing.
But then again, the public sector has long provided rich pickings for rip-off merchants. The privatisations of the 1980s were driven not by economics, but political dogma and greed. Privatisation was a massive con trick on the public. The British Gas “Tell Sid” sell-off bore the mark of the snake oil salesman. Hard-edged privatisation was rebranded touchy-feely.
At a stroke, 40 state-owned industries and 600,000 workers were removed from the public sector. Utilities including gas, electricity, telecoms and Royal Mail passed into private ownership, along with the billions siphoned into company accounts and shareholders’ pockets.
The 1980s fire sale of North Sea assets epitomised the myopic short–termism of the time. Private gain was prioritised and legitimised over public interest. Ironically, there is renewed government involvement in our railways, telecoms and power generation. Unfortunately, they’re the governments of France and China. To no one’s surprise, privatised utilities have put corporate profits and shareholders ahead of reinvestment and public service.
The history lesson is important, because privatisation and PFI rip–offs brought about a sea change in ethics and morality. Ripping off the public purse became acceptable, even in the midst of the pandemi. Shameless profiteers exploited the crony-virus to enrich themselves through PPE contracts. Much of their ill-gotten gains will have been moved offshore, hidden in numerous opaque shell companies.
The chancellor has warned the bills have to be paid. We should be used to it by now; we all had to fork out for bankers’ greed and irresponsibility in 2008. Mr Sunak had an attack of the vapours at the very thought of a windfall tax on those who have had a good pandemic. As “Queen of Mean”, Leona Hemsley, said, “only little people pay taxes”. We little people will see our taxes and costs rise as, abracadabra, the rip-off billions are vanished into offshore accounts.
The rip-off culture has backwashed into all levels of economic activity. Businesses as diverse as dentists, opticians, restaurants and hairdressers are out to recoup their pandemic losses, real or not. A third of purchases are online, offering novel and technological opportunities for ripping off the unwary.
The Competitions and Marketing Authority (CMA) has launched an “Online Rip-Off Tip Off” site to raise awareness of misleading online practices. These include hidden charges, subscription traps and fake reviews.
Even big insurance, energy and telecoms companies are at it. For them, loyalty is something to be exploited not rewarded. Huge profits can be made from the unwary who allow contracts or cover to automatically renew.
The elderly and those lacking communication or IT skills are most at risk. A Which survey suggested around 40% of us have never haggled with service providers. Yet, 86% of hagglers successfully obtained reductions from their insurance, phone, broadband and pay TV providers.
Which? has provided a useful guide to winning a reduction. A couple of weeks before a contract expires is the optimum time to strike. It’s not always straightforward though. Using Covid as a smokescreen, even major companies are slippery and evasive. Clunky and impenetrable websites, FAQ diversions, making phone contact difficult and interminable delays in answering, are all in the rip-off merchant’s toolbox.
I’ve decided to fight back and “I’m being ripped off, until you prove otherwise”, has become my default position. After all, Velcro isn’t the only rip-off out there. (Joke ripped off from Tim Vine.)
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