Labour Conference 2011: Denham attacks ‘rip-off’ financial services

Shadow business secretary John Denham will today announce an investigation into companies that knowingly 'rip off' consumers, with a focus on financial services.

Denham will today tell the Labour party conference the consumer champion Ed Mayo will lead a year-long investigation into tackling "bad companies".

"If you look at the things that have ripped off consumers, whether it is payment protection insurance, credit card scams, insurance referrals, they all have in common [the fact that] people at the top of the company knew they were wrong and no-one thought they had a responsibility to do anything about it," Denham told the Guardian.

Denham said standard customer care practices do not appear to apply to financial services in the same way as to other services.

He said, for example, that faulty appliances such as cars would be recalled, but products such as financial services are not treated in the same way.

The shadow secretary said he hopes a new set of consumer rights will be applied over all sectors, in the same way the Advertising Standards Authority works across all areas of business.

His criticism of financial services comes after Labour leader Ed Miliband told the BBC the party would apply corporation tax to financial services to help subsidise university tuition fees.

The coalition government plans to reduce corporation tax from 28% to 23% by 2014.

However, Miliband said Labour would exclude financial services providers from the corporation tax cut and use the revenues raised to maintain a £6,000 per year cap on university tuition fees.