Burnham brings forward ban on ‘subscription traps’ to ease cost of living

Beyond subscription reforms, the government is also moving to outlaw shops from making false claims about products having previously retailed at much higher prices. This practice, often seen in sales advertisements, is a common tactic used to create an illusion of a substantial discount, thereby tricking shoppers into believing they are securing a better deal than is genuinely on offer. Burnham stated that these combined efforts are crucial for empowering consumers and ensuring fair market practices.

The package of changes, initially announced by his predecessor, Sir Keir Starmer, had been slated for implementation at a later date. However, Burnham’s government has decided to fast-track these reforms, bringing them forward in a concerted bid to give families "room to breathe" as inflationary pressures continue to strain household budgets. The move comes as the Prime Minister embarks on a nationwide tour while Parliament is in recess, a period during which he has pledged to deliver a series of "everyday fixes" aimed at directly addressing the financial challenges faced by ordinary people.

Shadow Chancellor Mel Stride, however, was quick to brand the measures as "reheated," arguing that the Prime Minister "has already run out of ideas." Stride highlighted that the core plans were indeed first unveiled under Sir Keir Starmer’s leadership in April, implying a lack of original policy from the current administration. Despite this political jousting, the government insists the accelerated timeline demonstrates a decisive response to current economic realities.

Regarding the subscription reforms, the government has detailed that the changes will mandate businesses to provide "clearer up-front information" to customers at the point of sale, ensuring they fully understand the terms of their contract. This will be supplemented by "regular reminders" about upcoming renewals and, critically, a "much easier exit" mechanism for cancelling unwanted contracts. The aim is to eliminate cumbersome cancellation processes, such as lengthy phone calls, mandatory written notices, or obscure online portals, which often deter consumers from ending subscriptions they no longer need or want. These regulations are designed to prevent consumers from being unknowingly rolled onto expensive contracts or struggling to extricate themselves from services they intended to be temporary.

While originally anticipated to come into force next spring, Burnham’s government has now committed to implementing these vital consumer protections by January 2027. This revised, accelerated timeline underscores the urgency the administration places on addressing these prevalent issues. When first announced in April, the Department for Business and Trade estimated that these plans would collectively save UK consumers a staggering £400 million a year, equating to a potential saving of up to £170 per person.

The scale of the problem is significant. Data from the Department for Business and Trade revealed that there are an estimated 10 million unwanted, active subscriptions across the UK. Furthermore, a substantial 3.5 million people are reportedly being "quietly rolled from free or discounted trials into fully costed contracts" without adequate warning or explicit consent. An additional 1.3 million individuals are caught out annually by unexpected auto-renewals, often leading to charges for services they have forgotten about or no longer wish to use. These figures paint a stark picture of the financial drain caused by these "subscription traps" on millions of households.

In addition to the already planned changes concerning subscriptions, Prime Minister Burnham is also vowing to tackle the widespread use of "pretend prices" by retailers. This measure aims to stamp out misleading promotional tactics such as the use of inflated "was" prices, made-up discounts that don’t reflect genuine prior pricing, or misleading recommended retail prices (RRPs) designed solely to highlight an artificial "deal." The government intends to launch a public consultation this autumn to determine the most effective methods for implementing these new measures, inviting input from businesses, consumer groups, and the public. This consultation will explore various mechanisms to ensure retailers provide transparent and honest pricing information, preventing consumers from being manipulated into purchases based on false value propositions.

Consumer advocacy group Which? has been a vocal proponent of such reforms, stating that it has "repeatedly exposed businesses, including trusted household brands, ripping off customers with dodgy deals that aren’t what they seem." Sue Davies, head of consumer rights policy at Which?, welcomed the announcement, emphasising the need for the government to bring the new rules into effect "swiftly." She highlighted that the group’s research consistently shows the detrimental impact of these practices on consumer trust and financial well-being.

However, Mel Stride reiterated his criticism, asking, "The cost of living didn’t become a problem last week, so you have to ask why it has taken Labour so long to enact legislation passed by the previous government." He specifically referenced the Digital Markets, Competition and Consumer Act, passed under the Conservative government in 2024. This comprehensive legislation already aimed to crack down on hidden fees, combat fake online reviews, and simplify the process for customers to cancel subscriptions. Stride’s comments suggest that Burnham’s government is merely implementing existing frameworks rather than introducing novel solutions. While it is currently unlawful to use false "was" prices for items on sale, this practice is not yet on the Competition and Markets Authority’s (CMA) list of automatically banned practices. This list includes egregious violations such as operating pyramid schemes or displaying an unauthorised quality assurance mark, which are considered illegal without needing to prove consumer harm. The new measures aim to elevate misleading pricing tactics to a similar level of enforcement, providing stronger consumer protection.

The Liberal Democrats urged Burnham to "go further" to protect consumers. Treasury spokesperson Daisy Cooper called for "strengthened protections against rogue traders" and decisive action to tackle "shrinkflation"—the insidious practice where products are subtly made smaller, yet continue to be sold for the same price, effectively a hidden price increase. Cooper argued that while the announced measures are welcome, a more comprehensive approach is needed to address the full spectrum of unfair practices impacting consumers.

This announcement is the latest in a series of interventions by Prime Minister Burnham aimed at alleviating the pressures of the cost of living crisis. Previous initiatives have included the introduction of a £2 bus fare cap across England, designed to make public transport more affordable, and a VAT cut on household electricity bills, directly reducing energy costs for families. These "everyday fixes" reflect a strategy to deliver tangible, immediate relief where possible.

Despite these efforts, Burnham is widely expected to face considerable pressure to announce more significant and far-reaching changes in the upcoming Budget. Chancellor John Healey is scheduled to deliver this crucial financial statement on October 28th. However, Healey has consistently made it clear that he will oversee "strong fiscal discipline," a commitment that will undoubtedly limit the government’s capacity for substantial new spending or extensive tax cuts. This disciplined approach suggests that while consumer protection measures can be enacted through regulatory changes, large-scale financial interventions may be constrained, leaving the Prime Minister to rely on a combination of targeted reforms and existing legislative frameworks to deliver on his promise of easing the cost of living for British families.