Minister announces plans for 'collective shopping'

Neighbours will be able to club together to get better deals on loft insulation and energy-saving light bulbs in a new government initiative.

Consumer Minister Ed Davey said so-called collective purchasing could also eventually help households save money on utility bills and insurance.

The measure is one of a number aimed at giving consumers more power.

Mr Davey said he also wanted to give people better access to the data held about them by businesses.

And he suggested the creation of a "kitemark" for consumer feedback and price-comparison websites to help customers know which ones they can trust.

Switching tariffs

As part of the government's Better Choices, Better Deals initiative, Mr Davey said he wanted to harness "the power of the crowd" to help individuals save money.

The first collective-purchasing scheme will be piloted later this year by DIY company B&Q and will focus on helping people buy energy-saving products.

If successful, the idea will be expanded, with the government aiming to recruit 5,000 community organisers to help arrange collective-purchasing deals in their areas.

These could involve signing up, as a group, with an intermediary business or organisation which would then switch the households en masse between energy tariffs to make sure they are always on the best one.

Mr Davey also announced on Wednesday that more than 20 big companies, including banks, energy suppliers and retailers, had so far signed up to the "mydata" scheme, which is designed to give customers better access to information on their spending habits.

They should then be able to analyse that information themselves - or recruit a third-party company to do it for them - and hopefully find ways to save.

"At the moment we have a situation where businesses know more about us than we know about ourselves. That's barmy," Mr Davey said.

He gave the example of mobile-phone companies, saying that according to a recent survey by comparison firm Billmonitor, the average mobile-phone user is overpaying by about £200 a year.

He said that with mydata, customers would be able to analyse their phone usage more easily and get independent advice on the best deal for them.

Security and privacy

Other applications would include allowing customers to analyse their supermarket shopping or energy consumption and get suggestions on where they could save.

The UK Cards Association has also agreed to start issuing annual credit-card statements that make it easier for people to understand what they have spent, what they have repaid and any fees they have incurred.

The statements will also compare their cards with others that could be better value.

Jim Killock, from campaign group Open Rights, said: "We welcome the idea of allowing consumers to get their data back, but the other side of the coin is the confidence they have in data-protection regulation.

"This is a very opportune moment for the government to reinforce that confidence by reorganising our data-protection regime."

Mr Davey said he was very aware of the need to reassure people about security and privacy, and had appointed Prof Nigel Shadbolt, an expert in online data usage from Southampton University, to consider ways to avoid any problems.

Ann Robinson, from USwitch, said she thought the idea of giving customers more power was "brilliant", but there had to be some kind of public education campaign to help people to understand the new opportunities.