WORKING people will be protected from profiteering and unfair price rises as the Chancellor clamps down on firms who rip off their customers, the Government announced today.
But while business owners said cracking down on profiteering is reasonable, one observed that “doing it while pretending your own tax rises didn’t push prices up proves the government has more front than Blackpool”.
Another questioned whether the new powers are more about “diverting attention away from a cost of living problem that remains unresolved”.
A new framework will give the Competition & Markets Authority (CMA) and other regulators stronger, more targeted powers to act quickly to tackle excessive and unfair price rises.
Price gouging
Price gouging is when a company puts prices up to an unfair and unjustifiably high level during a crisis. When a major supply shock hits, these powers will help regulators spot trouble early, move faster, and protect consumers.
Where regulators identify concerning practices, they could ‘name and shame’ by publicly sharing information on how individual firms have changed their margins in response to an economic shock, and the reasons behind this.
Should the CMA or other regulators observe price gouging in an emergency and conclude that they needed further powers to tackle it to support consumers rapidly, the Government says it stands ready to act — including with highly targeted enforcement powers to give them the ability to direct firms to stop exploitative pricing practices and where necessary, impose penalties if needed.
Chancellor of the Exchequer Rachel Reeves said: ”When global events drive up costs, working families feel it first. I will not tolerate anyone exploiting a crisis to make a quick buck off the back of hard working people.
“We are backing families, backing fairness, and building a stronger and more resilient economy through our long-term economic plan.”
Striking irony
Paul Denley, CEO at London-based Oakham Wealth Management, said the new anti-profiteering push is reasonable but the process itself is not as simple as it seems.
He said: “The principle sounds reasonable. Few would defend firms exploiting a crisis to raise prices unfairly. The problem is execution. Distinguishing genuine price gouging from normal market forces is far harder than this announcement implies.
“Energy costs, wages, supply chains and currency movements feed through differently across sectors. What looks like profiteering may simply reflect firms rebuilding margins after years of pressure.
“There is also a striking irony. Many businesses already feel squeezed by the state through higher National Insurance, business rates and the Employment Rights Bill. Being told not to pass on costs while absorbing more of them is a difficult message to swallow.
“The deeper risk is that crackdowns become political theatre rather than serious economics. The real question is whether this is about protecting consumers, or diverting attention away from a cost of living problem that remains unresolved.”
More front than Blackpool
Colette Mason, AI Ethics Consultant at London-based Clever Clogs AI, was also sceptical of the announcement: “The government promised to ban ticket touting in its 2024 manifesto but Oasis dynamic pricing came and went, enraging gig-goers. Two years, one consultation and a letter from half the music industry later, the King’s Speech delivered a draft bill, not legislation, just more consultation.
“Now, it announces anti-profiteering powers to stop businesses raising prices unfairly. The pattern is familiar: promise big, legislate slowly, announce again.
“Cracking down on profiteering is reasonable. Doing it while pretending your own tax rises didn’t push prices up proves the government has more front than Blackpool.”
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, also said the Government should look closer to home: “Maybe if the Chancellor had actually facilitated a stronger economy, people might have been less impacted by potential short-term shocks.
“Consumers have long memories when people try to take advantage of the situation. The Chancellor needs to focus on how she can improve the lives of the UK population through economic growth and by understanding the needs of SMEs. This is something she has not demonstrated so far.”
