Question: You are organising a parliamentary event on March 12 to discuss key aspects of the enterprise bill. Which aspects of the bill will you be wanting to focus on?

Sheila McKechnie: Our main concern is the reform of the Fair Trading Act because for years rogue traders have been able to get away with exploiting consumers and the law has never been fast enough to catch up with them. So that is the critical bit in terms of consumer protection.

Question: What's the cost to the economy?

Sheila McKechnie: We've got some estimates. There's approximately a million consumer complaints about this kind of behaviour. Every thing from dodgy builders, dodgy garages, scams of all kinds. However, I think we just have to be realistic: you can tighten the law so much but the crucial issue in this area is effective enforcement action. So while we really welcome that section of the bill we have to be satisfied that the resources will be available to make enforcement work.

Question: There will always be 'Del boys'?

Sheila McKechnie: I'm afraid there will always be scams. I get them all the time, Which? members send them in and say 'Have you seen this? You must get it stopped'. And I say actually it's very difficult to get it stopped because by the time you get the regulatory authorities in to investigate the company, with all the rules of balance, evidence and warnings and whatever, they simply shut down, move next door and open up under a new name and that's it. So the enforcement aspect is critical but the Bill puts in place for the first time the right of Trading Standards to use injunctions. So that could be a very fast method of putting somebody out of business.

Question: Another issue is the power to raise super complaints. Why do you need these powers of super complaints to be enshrined in law?

Sheila McKechnie: It's important from the point of Consumers' Association, who have the resources to do research into markets and to have that research taken seriously. So it's a nice clear link between bodies like ourselves and the OFT. We're obviously in touch with a huge range of markets, and probably in some areas have more resources paradoxically than the OFT to pick up potential problems. If you've got a body of very active members, which we have - they are good, they alert us to things very quickly - we actually have the kind of intelligence gathering role that I think makes us potentially extremely effective and proactive in identifying market abuse.

Question: From a consumer's point of view, what's missing from the enterprise bill that you'd like to see?

Sheila McKechnie: I don't think there's anything specifically missing. When we get the final draft of the bill, it will go into committee stage. At that point the lobbying will become intense and what we need to make sure is the letter of the law that comes out at the end of this process does actually provide what we regard as the intention of the legislation.

Question: So you fear a dilution?

Sheila McKechnie: I fear dilution and I particularly fear the proposals on the criminalisation on certain behaviour will be weakened or even dropped.

Question: What lobbying would persuade politicians otherwise?

Sheila McKechnie: The CBI are lobbying extremely hard to get rid of the criminal sanctions. Criminal sanctions are used extremely rarely but they are very important because it is senior people in companies who operate, price cartels, monopolies, bad practices,etc. It does come down to a group of individuals making decisions and all the law on trying to take corporate entities to court tends to fall down because it's trying to pin down who exactly the company is. So to have a parallel system where you can go for the company and for the individual is actually extremely useful.

Question: Businesses would argue that if it gets to that point, no-one will be wanting to make a decision because they are going to be so scared that they will be individually prosecuted and they also argue that it's right not to have price cartels but if we get punished for this and our foreign competitors don't, won't British businesses suffer?

Sheila McKechnie: The law will apply to everybody operating in the UK so in terms of cleaning up UK markets, which is our primary concern, then I don't think that's a valid argument.

I think there's a much bigger problem and that is competition policy and clean markets. What you have to do to clean up markets isn't very well understood. If you compare us to America. Some pharmaceutical people are in jail right now for organising a cartel on vitamin prices. They're much much tougher in the States. Other EU countries have criminal sanctions for this kind of behaviour.

We have to shift our mindset because if you said to the average consumer do you realise the competition policy in the branded goods sector is basically price fixing, you've lost them before you're half way through the sentence. The mindset is that this is a white-collar crime and there are no victims so why should there be criminality? Well it's a bit like one of those things people occasionally say, I think a bit stupidly, 'oh well some people rip off supermarkets, they steal, but is that a huge major offence, the supermarkets are rich'. Yes but you and I pay for that theft and in effect dishonesty pays.

Question: So what's your message to ministers about this?

Sheila McKechnie: I'm hoping that the Enterprise Bill, which as I say in its thrust is the right set of actions, will all result in a very big culture change. The way that will happen is through things being triggered - mega fines where you can pin down a cartel, action against individuals where you get clear evidence of bad behaviour and breach of the competition law Actions by the OFT will change gradually the kind of culture of complacency about this kind of behaviour. I hope we can build round the bill a much higher level of public awareness that rigging markets is wrong.

Question: Recent European commission statistics revealed that UK consumers are paying over the odds for new cars. UK car buyers are currently paying on average 2000 pounds more for cars than anyone else in Europe. Why still?

Sheila McKechnie: Good times are coming but it has taken the most enormous amount of time to bust this market. We started three years ago with a view to really making changes, and we organised a very high profile campaign. Consumers cooperated with us by staying away from the forecourts when we were saying don't buy cars, the prices are going to come down, and we will probably be doing that again sometime in the future.

It's a very technical issue, it's to do with a system of protection that the car manufacturers got out of the European Union many many years ago and they've tried to maintain it ever since. It means effectively that they dictate the prices that their cars are sold in each country. So you don't have a situation like you have with a supermarket where they negotiate with the big brands and if they're buying 10 million tins of this, they get a good deal and they have a profit margin but the price to the consumer is lower. The car market doesn't work like that.

I'll give you an instance in this country of a situation where BMW took action against a Dutch dealer because they were selling cars for export to the UK at a much lower price than they were being sold here. The company then actually restricted the number of cars that that company could sell. So it's a completely upside down way of running a market.

The point we've reached at the moment is that that exemption from competition law called the Block Exemption, is going to be removed. The time scale is being argued about. The industry wants at least another year's grace from the point at which it should change. We would oppose that but it could still be two years before we see the market shifting. So don't hold your breath but we will get there in the end.

Question: But we will get there? Couldn't they simply ask for another moratorium after a year?

Sheila McKechnie: No. The commission has produced a document and with three votes against and one abstention, the overwhelming majority of the commissioners were in favour. There's been a huge blast from the German Chancellor who is desperate to protect Volkswagen in particular - and by the way, that's why he's holding up the mergers agreement in Europe as well. He seems quite prepared to accept a mergers agreement as long as there's an exception for Volkswagen! This is the dilemma of countries supporting their indigenous industries but actually doing so on the back of consumer high prices. There's lots of evidence that that kind of protectionism which is still endemic across Europe (less so in the UK in some areas) does not actually make companies more competitive - it makes them flat and bloated and they get taken over anyway eventually. In the process a great deal of taxpayers' money is wasted.

Markets make companies efficient and what drives markets is consumer behaviour. If you get a situation where you're not get the service you want from one organisation, you switch to another. And the market is a very good mechanism for putting duff companies, poor service providers and poor products out of business. If governments actually move in to protect the interests of companies, it's almost invariably going to cost the consumer.

Question: Taking for instance CAP - you would like to abolish or significantly reform CAP but some argue that CAP supports a fragile industry and your plans would be a further kick in the teeth for the farming industry?

Sheila McKechnie: The great problem with the farming debate is it groups all farmers together. The CAP actually does not provide income for small farmers to the degree that they can survive long term. It's that small and medium sector that probably has most to contribute to the sustainability of the countryside and they are not the main beneficiaries. The main beneficiaries are the big grain and cereal producers who certainly do not need subsidy. The other issue is that even within the farming sector there are areas like pig farming that are completely outside the scheme now, but they are having to pay European grain prices, so they are uncompetitive on the world market. The CAP does not achieve anything and it costs us as taxpayers and consumers a great deal of money.

Question: So what's your alternative to CAP?

Sheila McKechnie: I think there would have to be a shift into direct subsidies linked to very specific purposes. As a taxpayer, as a consumer, I am quite prepared to accept that there is a need for support to sustain certain social objectives. But the social objectives should be clear and the delivery of them should be measured, and you don't get the money if you don't deliver them.

The idea that you can achieve multifunctional objectives through a few big farmers getting loads of dosh is so far removed from reality it's hardly worth dealing with the argument. In any case, countryside sustainability and rural development is so undependent on farmers these days - a miniscule amount of our GDP comes from farmers and in the rural community a very very small sector of rural economic development depends on farming. So the whole debate is a complete misnomer.

The NFU has for years promoted the idea of the independent friendly farmer and family farm that has romantic associations with cows in fields and little lambs, but that isn't the reality of modern farming. We need to look at having a food policy rather than an agricultural policy because the CAP distorts loads of things that are bad in terms of food and nutrition - it's not sustainable, it concentrates a lot of resources on use of pesticides which is the thing that concerns most people in relation to the environment. And we mustn't forget our duty to the interests of farmers across the world and the policy results in dumping on poor countries where we are actually undermining their local sustainable agriculture by the fact that we are undercutting their prices and dumping the stuff that we cannot sell on their markets. Now that is socially a disgraceful policy.

Question: Why's it been able to carry on for so long then?

Sheila McKechnie: The CAP is one of those things that was absolutely fundamental to the Franco-German axis that set up the EU. At the time it was set up it made sense, remember, we had been through a war, there had been food shortages and it was seen as essential to have an independent food supply. It was an appropriate policy for the early 50s. It was not an appropriate policy for the 80s, 90s and the new century. Now the French gain enormously and the Germans pay enormously. We pay as well but the Germans pay much more than we do. The German position is now changing and it is moving much more towards the UK position which is that fundamental reform cannot be put off. So I think the opportunity exists now to push for a very different approach.

A load of money is wasted - the damn thing takes over 40 per cent of the total EU budget. If you came from Mars and you had to devise a policy that was least effective at getting good nutritious food to the consumer at the best value for money, you could not devise something more stupid than the Common Agricultural Policy. It's the politics that's going to decide it to be honest and change in the EU is never easy.

Question: Gene technology is a medical ethical issue. Why is it also a consumer issue?

Sheila McKechnie: Our two main concerns are first, privacy and how data will be stored, protected and used, and how individuals might be treated as a consequence of them being part of a research program. I think it's absolutely critical that people involved in such research do give informed consent to their genetic information being used. Now that is a difficult balance between the risks of research which might lead to enormous benefits, alongside possible damage to individuals through an invasion of their privacy. The second issue, which is to some extent connected, is the fear of creating a genetic underclass who actually cannot get the things we take for granted, like life insurance. They will also be excluded perhaps from some kinds of employment. The effect on people would be devastating, really we would create another group of very disadvantaged people in our society, and on the basis of probability rather than the fact that they are actually going to develop a disease.

Question: But the insurance industry would argue they're purely wanting to go for the best possible information to have the most targeted policies so that in the end some pay less because we've got a more targeted approach to our policies. How would you respond to that?

Sheila McKechnie: There are enormous short term benefits to insurance companies in cherry picking groups of consumers so they can offer them a better deal and exclude the people with bad risks. You see that even in the car insurance market - people trying to sell car insurance on the basis of e.g. a group for over 50s so we don't have to pay for the boy racers! A lot of that I have to say is misleading and a bit of a con. You've got to read Which? to get to the bottom of which is the best deal.

Of course such selection would reduce the price of insurance for the majority of us, but I think while there's short-term gains for the industry, there is a long-term problem. They could actually be going down a route which ultimately results in no insurance industry at all. If science develops, as it will, an ability to predict the life chances of every individual then the whole concept of insurance is undermined. The possibility to predict 'life chances' with any degree of accuracy is about more than scientific developments - environmental, social and lifestyle factors all play a crucial role. It may be that more and more tests come onto the market to predict disease susceptibility but it's unlikely where most conditions are involved that these will be predictive enough to determine for sure whether a person will develop a disease. Even where testing is highly predictive, they won't be able to determine when disease onset will be and how severe it will be.

The idea of any insurance system is that you pool the risk - I could walk under a bus, somebody else could walk under a bus, so I will join in with other people, the vast majority of whom will not walk under buses, but if one of us does, then the insurance will pay out. So I pay a small amount of money and if I'm the victim of something like that, I then get the means to survive. The excluded are likely to be identified as having a genetic predisposition to get, for example, certain types of cancer or Alzheimer's. Ultimately the group of people that are being insured are the group of people who don't need it because all their predictions say they are going to live to a ripe old age. So it could be a short term gain for insurance companies but the social consequences are long-term and damaging. We think we need to draw the line now and say genetic testing cannot be used for insurance purposes.

Question: There's a Moratorium at the moment that - you want it to be a total ban.

Sheila McKechnie: Yes, on balance we don't see any consumer benefit at all. During the moratorium period there needs to be a full debate regarding the potential impact on consumers and industry. All options, including an outright ban, need to be considered to ensure the control over the use of individual genetic information by insurers. We're very grateful for the fact that the government has extended that moratorium for another five years so at least it gives us a chance. There is a risk that the science is developing at such a rate it will outstrip our capacity to deal with it.

Question: Does it concern you that the speed of science might make it difficult to put regulation in place because it is so quick?

Sheila McKechnie: I think that's right and I think there is an argument right across the field for regulation in these sorts of area not just this one. Things are changing so fast that our old attitude to regulation which is to identify the problem, sort out what we should do about it, set out mechanisms for enforcing it, and have redress if its appropriate - that's often just too slow. Legislation takes 2-3 years to get through the UK system from start to finish. In Europe it can be anything up to 10 years.

Question: Do you think we need to have regulation that is sped through on these areas?

Sheila McKechnie: I think there needs to be mechanisms to have fast track regulation, but I think we need to have a much more fundamental revolution in the way that we approach legal frameworks. I think we have to move to much more general duties where by the law is broad enough to be able to deal with the future. Legislation needs to be smart and needs to be future-proof. It is not beyond our wits to devise legislation in that way so that perhaps there could be the power within the framework legislation to take very very fast action if a specific scam or problem arises.

Question: We increasingly here the phrase "rip off Britain". Is Britain the poor nation of consumer rights do you think?

Sheila McKechnie: We're not the poor nation in consumer rights. We are the poor nation in relation to the prices we're charged for a whole range of things: branded goods and by that I mean everything from jeans to perfume - products that sell themselves on image and label. We're paying more for these and in some cases twice as much as America, and in most cases much more than other European countries. So it is true that, UK consumers are being ripped off on a whole number of goods and we would like to see something done about that.

We restrict the term 'rip off' to those areas where we think that consumer disadvantage exists and I think one of the problems with the term is that it was initially applied to supermarkets, and quite frankly we did not agree - there are problems with supermarkets but to call them rip offs vis a vis the consumer is not appropriate. On the other hand, we have no hesitation in saying the financial services sector's pensions were a rip off. Indeed the phrase could be applied to lots of financial products. I have no problems in relation to lots of financial services products in saying this is a rip off. We will be bringing out a book later this year which will identify for consumers the areas where real rip offs are going on and hopefully find ways which they can buy things in other countries, maybe when they're on holiday or ordering from outside the UK so that we can really challenge the UK market.

Question: Do you think the problem with financial services is that people are confused - they can't understand all the areas of flexible packages that are being offered?

Sheila McKechnie: Confusion advertising or image advertising where they are supposed to explain the detail of what they're selling is endemic in this industry. The language and vocabulary that is used in contracts that they send you is so obscure that even sometimes CA's lawyers take a while to get to the bottom of exactly what the terms are.

Question: What more could the government do to police it?

Sheila McKechnie: The financial services is a market where there are "asymmetries of information between the buyer and the seller"

Question: You've lost me already!

Sheila McKechnie: The seller has absolutely all the information in terms how the particular thing that is being sold will work and the consumer doesn't actually have access to that information they can understand. I have to say consumers' eyes glaze over as soon as you mention the words retirement income but we've got to get consumers much more concerned in that area. The financial service market, unlike say the car market, is one where you have to have regulation because the difference in power between consumer and supplier is so unbalanced that you'd never get a clean market without regulation.

Question: Have we got enough at the moment?

Sheila McKechnie: The jury's out. The Financial Services Authority has made great strides but if I had to look at what have the beneficial outcomes been for consumers, to date they've been relatively limited. They've forced down the price of some pensions products but at the same time a combination of government actions, industry actions and lack of joined up thinking on retirement income has left us at the moment in a complete shambles.

Question: We've got a Minister for Consumer Affairs at the DTI. Would you like to see a department of Consumer Affairs with a minister at cabinet level status?

Sheila McKechnie: I have growing concerns about the DTI and its newfound role as promoters of business. If I look at the speeches that Patricia Hewitt has made since she became Secretary of State, she is determined that she will use the department to promote British business. We are often at odds with the interests of British business and it seems to be part of DTI. Why put us in a department that we're going to have the main arguments with? I think there maybe a good case for a consumer agency because at the moment it's split between a number of bodies. But quite frankly institutional reform is cumbersome, you can get into endless stupid debates about minutiae. The CA has focused on outcomes, outcomes, outcomes: what are the tangible benefits for consumers? This is why the Enterprise Bill is so important. It is Patricia Hewitt's first major consumer protection initiative, parts of industry will oppose some of the tougher proposals. This will be a major test of resolve. Will Hewitt stand up for consumers, or cave in to CBI pressure?"

Question: Are British people still too reserved about complaining?

Sheila McKechnie: A major focus of CA and Which?'s work over the past few years has been to make UK consumers more active so they can support our campaigns and look after themselves in the market place. In areas like financial services we really do need to raise consumers' gains, so for example, we want people to start switching bank accounts. Most people think they're all the same, it doesn't really matter, oh it's going to be a terrible problem, what am I going to do about my direct debits? Well what we can do is make it possible so that you can switch your bank account in 20 minutes on a Saturday afternoon. If that is possible then consumers have to be told to get on with it because if you do you will be making the market work for consumers and not allowing those institutions and companies to carry on ripping you off: so don't get mad, get even.

Question: What would you say to those businesses who say consumer power is so strong now we've got this compensation culture that's hampering business?

Sheila McKechnie: Compensation culture is a difficult issue for all of us. It's not just an issue for business. It's not always the right route to go, but if a company carries on behaving in a way that is not acceptable then the ultimate sanction has to be the law. But it often results in huge benefits to lawyers and not great benefits to consumers.

Question: Do you think too many lawyers are quite keen to push consumers down the litigious road?

Sheila McKechnie: I think they are and I think most consumer complaints involve things that cost much much less than say personal injury where you're talking about half a million or very large sums of money. Most consumer complaints would be under 10,000 pounds, and the vast majority would be under 5000 pounds, so we're a great supporter of the small claims court where people can do it themselves and put a claim in and it doesn't involve the whole fiercesome panoply of dealing with the law. Most people would be reluctant to take action if they risk huge legal costs.

In the field of medical negligence I think there are other issues and I would like to see us explore further different systems for compensating in that field, like a no-fault system. I think there are advantages to that and there are disadvantages, but all the evidence we have about medical complaints is that people really do want to know rather than punish the hospital through punitive legal actions.

Question: But that seems to be the only route they can do it at the moment?

Sheila McKechnie: In order to get the information, and people do get, sometimes, quite obsessive about things that have gone wrong in medical treatment. They take legal action primarily to get to the bottom of things and to challenge the authorities. So if we had a different and more open system for giving people information I think the need to resort to legal action would be less.