ECONOMY

UK needs to sort out messy PCR test market

Competition & Markets Authority updates

Price gouging, tests that arrive late or not at all, and refusing refunds: these are just some of the types of shoddy behaviour travellers to and from the UK have put up with this summer from private companies supplying compulsory Covid-19 tests. Widespread sharp practice in the provision of PCR tests is unacceptable in a market created by a government that has then also mandated demand. Sajid Javid, the health secretary, has launched a crackdown on “cowboy” providers that advertise misleading prices; the Competition and Markets Authority has pledged to take companies that flout consumer law to court. Coming at the tail-end of the summer holidays, that is still too little, too late. 

Travellers are directed to a government website with a list of 400 private providers of PCR tests. These are considered more accurate than rapid lateral flow tests, but can range in cost from tens to hundreds of pounds. Contrast that with countries such as Greece and France, where prices are capped at around €50 (France even provided them for free for tourists until July).

The UK is also more insistent on PCR testing than many other countries, requiring travellers to be tested on arrival — or face a fine of £2,000 — even if they are double-vaccinated against coronavirus. The government maintains that this is because as well as being more accurate, PCR tests can be sequenced, unlike lateral flow tests. In reality, only about 5 per cent of tests are sent for such analysis.

There are barely any checks on companies that appear on the official website. Yet even if the government insists that it does not endorse any of the providers, inclusion on such a list acts as a kind of imprimatur for an unsuspecting public. Of the 400 providers, just 25 are actually fully accredited by the official watchdog.

Creating a market with few barriers was an express aim of the government in an attempt to boost supply. The idea was that competition would stabilise prices to benefit the consumer. But this is not a normal market, and it is not working well: a cursory check by the Department of Health found that 85 providers displayed misleading prices, such as not including hidden charges. The companies had a deadline of last week to rectify the issue, or face being struck off the list. 

Meanwhile, the CMA has threatened court action and even criminal prosecution against providers that refuse to adhere to rules on clear pricing and fair terms. Unlike when it finds antitrust infringements, the CMA can currently only go to court to argue its case against companies that treat their customers badly. This is anachronistic: the prospect of a drawn-out court battle over PCR tests may, with luck, provide some impetus to pass draft legislation that is intended to equip the CMA properly with consumer powers, enabling it to fine companies directly.

Ensuring fair and transparent pricing is key, but any court judgment will be some time off. The government should go further, sooner. A price cap may be anathema to a free-market Conservative government, and to a Treasury that is collecting 20 per cent VAT levied on the tests. But such a poorly functioning and unusually conceived market means that such a robust remedy should be considered. This could be in conjunction with other measures, such as the government charging travellers a flat, affordable fee and then ensuring competition by directly contracting with suppliers itself. As it is, the government has created a market in PCR provision with few safeguards for consumers, enabling a Wild West to flourish. It cannot then be surprised to find cowboys.

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