Consumer groups will be given a greater role in identifying and fixing “broken markets” under plans set out by Ed Miliband for a shake-up of the way competition across the business world is regulated.
The Labour leader said he would legislate to ensure Which? and Citizens Advice would be given a say in setting the agenda of the Competition and Markets Authority.
He said Labour would be “the party of the consumer” and the plan for an annual competition audit of the economy would help ensure that areas where regulators were failing would be identified and tackled.
Appearing on BBC1’s Andrew Marr Show he said: “Unless you bring the consumer into the heart of these things, we are not going to get the change we need, we are not going to shine the light on these broken markets.”
He added: “The Competition and Markets Authority scrutinises competition across the board. They will be working with Which?, the CAB and others to say ‘where are the areas where competition isn’t working, what are your members telling you about where we need to act?’
“They will be sending a report to parliament and it will be framing the work for the year ahead.”
Mr Miliband has already promised action to reform the energy sector, including a freeze on bills if he wins the 2015 election, and last week set out measures to promote competition in banking.
Shares in the predominantly state-owned Royal Bank of Scotland and Lloyds came under pressure after Mr Miliband unveiled his plans to break up Britain’s big five high street lenders.
The Labour leader said: “Share prices go up and down but what really matters for the economy is getting the banking system right for the future.”
Bank of England Governor Mark Carney told MPs before Mr Miliband set out the details of his plan that capping the banks’ market share would not lead to a “substantial improvement” in competition.
But the Labour leader said: “He, to be fair to him, was asked about my speech before I made my announcement. He made the point that simply a market share for banks on its own isn’t enough, he is right.
“We also need greater portability of accounts, businesses and individual customers being able to move their accounts around more easily, that’s really important for proper competition.
“So he is right about that, it’s got to be a whole set of changes to make our banks work for our businesses rather than our businesses working for our banks, which is what so many of our businesses in this country feel they are doing at the moment.”
Mr Miliband said he wanted to see the deficit eliminated in the next parliament, but there were “fairer choices” that could be made about achieving that.
“We do want to see that happen, yes,” he said.
“What we’ve said, we want to get the current account into balance by the end of the next parliament, we want to see debt falling. They are important things that Ed Balls has said.”
But he added: “If we come to office after 2015, there won’t be lots of money to spend, things will be difficult. That’s partly why the proposals I have on the economy – competition policy, banking – they are so important to change things.
“Because the task for the next Labour government will be to earn and grow our way to that higher standard of living, not being able to engage in lots more spending.”
Pressed on whether the 50p rate of income tax for high earners would be reinstated, he said: “We want a fairer tax system and, as you would expect from an opposition, we will set out our plans in due course.”
Asked about the controversial Channel 4 TV programme Benefits Street, Mr Miliband acknowledged there was an issue around a minority who refused to work, but insisted it was wrong to “demonise” people on benefits.
He said: “There is an issue about a minority of people who could work, but aren’t doing so. That’s why Labour has clear plans to say to every young person who has been unemployed for more than a year that they need to go back into work, and we’ll make sure they get a job, and every older person unemployed for more than two years.
“But … I don’t think we should demonise every person on benefits. I think there are lots of people who are looking for work, who are desperate for work and who find that Britain is in the midst of a massive crisis of being able to find work in some places, a big cost of living crisis that our country faces.
“That’s why we are talking about the big changes that we need in our economy to put those things right.
“I think we need big change in our country. When I talk about the cost of living crisis it’s not just about the squeeze on wages, it’s about insecure work, it’s about the prospects to people’s kids, it’s about whether you can get houses at affordable prices.
“So there’s big change that our country needs, I’m not going to settle for the status quo. We need that big change and that’s what our plans are about.”