Documents considered by the Committee on 24 November - European Scrutiny Committee Contents


13 Consumer Markets Scoreboard

(32092)

15407/10

SEC(10) 1257

Commission staff working document: Making markets work for consumers. Fourth edition of the Consumer Markets Scoreboard

Legal base
Document originated22 October 2010
Deposited in Parliament28 October 2010
DepartmentBusiness, Innovation and Skills
Basis of considerationEM of 9 November 2010
Previous Committee ReportNone
To be discussed in Council10 December 2010
Committee's assessmentPolitically important
Committee's decisionCleared

Background

13.1 In 2008, the Commission issued a Communication announcing its intention to publish "consumer scoreboards" based on indicators which would help identify which parts of the internal market are not functioning well for consumers.[59] Consumer Market Scoreboards were published in 2008 and 2009 and, from this year, the Scoreboards will be published twice a year, in spring and in autumn.

The autumn 2010 Scoreboard

13.2 The Commission says that the Scoreboard is "a key diagnostic tool" to help implement the objectives of the EU's 2020 Strategy for Jobs and Growth which depend on "well-functioning and well-connected markets where competition and consumer access stimulate growth and innovation."

13.3 The Scoreboard is based on the results of a market monitoring survey conducted between March and May 2010 in all EU Member States and Norway and which covered 50 consumer markets (goods and services) accounting for 60% of household budgets. Housing, most medical products and services, and education are excluded from the survey. The market monitoring survey tested opinion on the following:

  • Comparability—how easily can consumers compare products and services and make informed choices on price and quality?
  • Trust—do consumers trust businesses to comply with consumer legislation?
  • Satisfaction—do markets deliver what consumers want?
  • Problems—do consumers encounter problems in particular markets? and
  • Switching—how easy is it for consumers to switch products or providers?

Each consumer market was given a ranking based on the combined score for each of these indicators.

13.4 The Scoreboard also includes information on consumer complaints and prices, with data on the latter adjusted to take account of different levels of purchasing power in different Member States.

13.5 The market monitoring survey indicates that the lowest ranked consumer markets for services were in the financial sector (investments, pensions and securities), real estate services, internet service provision, and railways; and for goods, second hand cars, clothing and footwear, meat and house maintenance and improvement goods.

13.6 Most consumers (52%) thought that it was relatively easy to compare goods and services, but difficulties were encountered with regard to banking services, telecoms, utilities (gas, water and electricity), real estate and legal services and accountancy. Levels of trust varied considerably across consumer markets, and were particularly low (30% or less) for real estate services, second-hand cars and financial services. 11% of consumers said that they had experienced one or more problems, with most concerning financial and real estate services, railways and internet services. Consumers were generally reluctant to switch products or providers or to complain if dissatisfied with their purchase, with the frequency of complaints tending to reflect the value or importance of the goods or services concerned, and 57% of consumers surveyed considered that the market delivered what they wanted.

13.7 The data on prices suggested that there were wider divergences in the pricing of services than of goods. Differences were greatest for internet service provision and banking (current accounts). There appeared to be a strong convergence of prices in areas where competition is intense and there are opportunities for cross-border trade, for example, pre-tax car prices and prices for electronic goods.

13.8 The Commission concludes that the data contained in the Scoreboard provide the basis for a deeper analysis of consumer markets which appear to be performing less well. The Commission therefore proposes to undertake two follow-up market studies. The first, on internet service provision, is justified because of the high number of reported problems in this sector, poor levels of consumer satisfaction, and significant differences in price. The second survey, on the meat market, is justified because it is a highly regulated and frequently purchased product accounting for a significant proportion of household expenditure and the survey revealed low levels of consumer trust.

13.9 As the Scoreboard also includes, in Annex II, national rankings for each of the consumer markets surveyed, the Commission invites Member States to use these to identify the best areas in which to concentrate their resources and enforcement effort.

13.10 Data for the UK show that the level of consumer satisfaction was high in 30 of the 50 consumer markets surveyed, middle to high in 11 markets, middle to low in eight and low in one (investments, pensions and securities). Compared with the other countries surveyed, the UK ranked much lower than the EU average for new cars and the provision of personal care services but much higher for clothing and footwear, meat, fruit and vegetables.

13.11 The data also show that "third party compliant collecting bodies" in the UK, for example, consumer organisations or regulatory bodies, received a large number of complaints relative to other Member States, but the Commission suggests that this may reflect a high level of consumer empowerment in the UK and effective systems for handling complaints.

The Government's view

13.12 The Parliamentary Under-Secretary of State at the Department for Business, Innovation and Skills (Mr Edward Davey) says that the Scoreboard demonstrates that the UK has performed well in a large number of the markets surveyed. The data gathered by the Commission will provide a useful evidence base for the Government in identifying priorities for consumer policy. The Minister notes that the Scoreboard has no direct policy implications for the UK and that the follow-up action proposed by the Commission largely concerns further market studies and analysis.

Conclusion

13.13 As we noted in our Report on the version published in spring,[60] the Scoreboard contains useful indicators for the Commission and Member States to determine how well the internal market is functioning and whether it is meeting the needs and expectations of consumers. The Scoreboard is for information and we see no need to keep it under scrutiny. We draw the document to the attention of the House because of the importance of the subject and the useful comparative data which the Scoreboard contains.





59   (29422) 5942/08: see HC 16-xiv (2007-08), chapter 7 (5 March 2008). Back

60   See HC 428-i (2010-11), chapter 25 (8 September 2010). Back


 
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