A ‘digital revolution’ was at the heart of the Queen’s Speech yesterday, including a new legal right to fast broadband under plans to bring rural areas and unconnected households into the 21st century.
That’s according to this morning’s front page of The Times. The paper reports that a law enshrining the right to broadband will mean that up to a million people in rural areas, who have long suffered terrible coverage, can demand a better service. It brings internet connectivity into line with the right to get electricity, telephone and postal services.
Other measures in the speech included the capping of exit fees for savers who want to access their cash under new pension freedoms and a Better Markets Bill to encourage householders to find cheaper deals for other services, from bank accounts to energy suppliers.
Simon McCulloch, director at comparethemarket.com, said: ‘On the face of it, the Better Markets Bill is designed to stoke competition and help people switch providers, which is extremely positive. In the UK, we have a very effective infrastructure to enable switching financial and energy providers. However, the main factors holding consumers back, keeping switching levels relatively low and bills high are fear and a lack of awareness. Any Bill brought forward needs to focus on tackling these two barriers.’
Commenting on proposals to smooth the path for driverless cars delivered during the speech, Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: ‘The momentum behind the development of autonomous and fully driverless cars seems irresistible. But all concerned need to keep insurance right to the fore. The main concern is who would be liable in the event of an accident – the occupant of the car, or the firm that made the onboard controls and sensors?
Meanwhile, The Telegraph reports that higher taxes on landlords introduced by the Government are unlikely to cool rampant demand for buy-to-let investments, according to Bank of England research. In a sign that policymakers could take further action to rein in the market, the Bank said tax changes, including the introduction of a 3 per cent stamp duty surcharge on buy-to-let purchases and second homes last month, would not ‘on their own’ lead to a ‘substantial reduction’ in purchases over the long run.
New figures from Gocompare.com Energy show that people are rejecting the ‘big six’ suppliers’ expensive tariffs in favour of best-buy-dominating deals from the UK’s smaller energy suppliers. So far this year, almost six out of every ten energy switchers opted for one of the UK’s growing number of smaller energy suppliers, turning their backs on ‘big six’ tariffs that, for some time now, have rarely featured among the top ten cheapest deals.
Ben Wilson, spokesperson for Gocompare.com Energy, said: ‘Smaller energy companies have been offering the cheapest energy deals for quite some time, so it’s no wonder that they are eating the ‘big six’ suppliers’ lunch.’
In other news, a UK exit from the European Union could wipe thousands of pounds off house values over the next three years, estate agents have claimed. Homeowners in London could lose as much as £7,500, while homes elsewhere in the UK could lose £2,300, the National Association of Estate Agents said.
The report, jointly commissioned by the Association of Residential Letting Agents, said rents could also fall. And it claimed that a Leave vote could lead to fewer homes being built.
The study suggests that prices in London would be hit by a slump in demand from foreign buyers, particularly those from EU countries. In 2013, 17 per cent of homes sold in the middle of the capital went to EU nationals.
Finally, if you find the subject of pensions baffling, then you are in good company. Bank of England chief economist Andy Haldane confessed to ‘not being able to make the remotest sense of pensions’, the Financial Times reports.
‘Conversations with countless experts and independent financial advisers have confirmed for me only one thing – they have no clue either.’ He added that while we have been given more freedom in handling our pension savings, we generally lack the financial knowledge to make informed decisions.
‘In the years to come, there will be a mixed fleet of vehicles on UK roads, with varying degrees of autonomy, so the industry needs to be tackling these issues as of today.’
Also in the speech was the Pensions Bill 2016/17. There was a muted reaction to this announcement from industry experts. Steve Webb, director of Policy at Royal London, said: ‘This is a very disappointing Bill. While measures to improve the regulation of workplace pensions and reorganise financial guidance are welcome, the elephant in the room is the under-saving crisis in the UK, and this Bill will do little to address that problem. The DWP’s own figures show that more than 12 million people are not saving enough for their retirement and this Bill will barely scratch the surface of that problem.
‘Urgent action is needed to get employees saving more than the statutory minimum of 8 per cent of their pay, and also to get more than two million self-employed people into pension saving for the first time. Regulators also need new powers to protect people’s pensions when corporate transactions leave workplace pension rights at risk. Unless new powers are added to the Bill during its passage through Parliament it will simply fail to address the big issues in pensions.’
Kate Smith, head of pensions at Aegon UK, said: ‘I’m extremely disappointed that the Government has failed to use the Queen’s Speech as an opportunity to tackle the ever-growing threat of pensions fraud via legalisation. We still need to look at ways for the industry, regulators and pension industry to work together to raise the profile of pensions fraud to stamp it out and protect savers.’
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