Lord Andrew Tyrie, the Tory peer charged with cleaning up the banking industry following the financial crash, has claimed that regulatory failures have left time-poor middle class Britons as “the new vulnerable”.
Tyrie accused regulators of failing across the board, creating a “crisis in capitalism” where consumers felt they were regularly being ripped off and not properly protected.
The former chair of the Competition and Markets Authority — who also led a post-crash Parliamentary Commission on Banking Standards — told the Financial Times: “We have widespread public dissatisfaction with capitalism.
“People feel alienated, they feel they live in a rip-off economy and it’s run for others, not them. These attitudes run deep into the middle classes, who are the new vulnerable.”
Tyrie claimed consumers’ use of digital platforms has left them prey to rip- off renewal charges by companies, which exploit customers who do not have time to shop around.
“People are time poor,” he said, adding that traditionally vulnerable consumers — such as the elderly or people with low educational attainment — were now being joined by the middle classes.
Tyrie said regulators had widely failed, as he accused them of not protecting consumers from renewal penalties, not being ready for the energy price shock, or stopping the discharge of effluent into rivers.
“Hardly any of them have done enough,” he added. “Regulatory failure has contributed to the crisis in capitalism, both in the UK and in other countries.”
He claimed some watchdogs have been “captured” by the companies they were supposed to regulate and that the statutory basis on which they operated was flawed.
Last month Tyrie, who grilled bank chiefs as chair of the House of Commons Treasury committee following the 2008 crash, gave a speech in parliament setting out a range of potential remedies.
He said the statutory footing on which regulators were set up should be strengthened to place consumers’ interests as paramount in law, with a “duty of expedition” to make decisions as quickly as possible.
Tyrie, who has made recommendations to the government on potential regulatory reforms, said watchdogs’ objectives should be simplified, with rigorous targets and regular reviews.
The Tory peer also advocated an improvement to the governance of regulators to “improve the internal challenge”, with an enhanced role for non-executive directors.
Tyrie has proposed an “A-team in the Cabinet Office” to oversee watchdogs, with powers to send in hit squads of people “into the regulators to conduct investigations”.
Noted for his caustic interrogatory style, Tyrie left the CMA abruptly in 2020 following colleagues uneasy over his reformist agenda threatened a vote of no confidence, according to people briefed on the matter.
Tyrie quit citing frustrations with the “inherent limits” of his role. At the time he indicated he was moving on to lobby more freely for the consumer-orientated reforms he had called for at the CMA.
He said: “I was unable to get the board to realise there needed to be a strategic shift in the way the CMA was run. I realised I was up once morest a brick wall. I was better off leaving.”
The CMA declined to comment, but its new management team has said it wants people to be confident they are getting “great choices and fair deals” and to create an environment where fair-dealing businesses can thrive.
The business department said it disagreed with Tyrie’s comments. “The government is committed to ensuring consumers get a better deal and protecting their hard-earned money,” it added.
The department highlighted reforms including a new technology regulator called the digital markets unit, and a review of the UK electricity market that is meant to cut the cost of power for consumers.
