Tory politi­cians no longer trust con­sumers and we will all be the worse for it Ryan Bourne

Con­ser­va­tives in­creas­ingly re­ject the idea of the sovereign con­sumer shap­ing eco­nomic life

The Daily Telegraph - Business - - Front Page - RYAN BOURNE Ryan Bourne holds the R Evan Scharf chair for the pub­lic un­der­stand­ing of eco­nomics at the Cato In­sti­tute

Con­ser­va­tive politi­cians are prob­a­bly mid-way through their sum­mer read­ing lists. I sug­gest they cast their books aside for 30 min­utes to study one short piece ur­gently: Jeff Be­zos’s open­ing state­ment to the US con­gres­sional hear­ing on Big Tech.

The Ama­zon boss’s re­marks were an un­fash­ion­able ode to con­sumer-led cap­i­tal­ism. Cus­tomers, he said, “are al­ways beau­ti­fully, won­der­fully dis­sat­is­fied, even when they re­port be­ing happy.” It is that pres­sure that an­i­mates busi­nesses to im­prove ser­vices, add fea­tures, in­vent prod­ucts, lower prices and speed up ship­ping. “Per­cep­tive and smart”, the cus­tomers’ trust is hard won and eas­ily lost, Be­zos ar­gued – their loy­alty only guar­an­teed through good ser­vice, un­til some­one else pro­duces some­thing bet­ter.

Con­ser­va­tives used to un­der­stand this eco­nomic truth – that the best eco­nomic reg­u­la­tor is con­sumer power. Af­ter the Thatcher revo­lu­tion, Tories be­lieved that cus­tomers’ re­vealed pur­chas­ing pref­er­ences rep­re­sented what was best for them given the cir­cum­stances faced. They thought the best “con­sumer pro­tec­tion” pol­icy was to fa­cil­i­tate more buy­ing op­tions at vary­ing prices, through free trade and lightly reg­u­lated prod­uct mar­kets.

A raft of re­cent ac­tiv­ity, how­ever, sug­gests that plenty of mod­ern Tories have junked or for­got­ten this out­look. Not only do they ap­pear to think politi­cians know bet­ter than us what we re­ally want, but their ar­gu­ments im­ply we sim­ply can­not be trusted to judge any trade-offs be­tween qual­ity and price, de­spite this age of ex­ten­sive, read­ily avail­able in­for­ma­tion.

Be­hind the em­brace of “in­dus­trial pol­icy” and “re­gional re­bal­anc­ing” lies an as­sump­tion that a con­sumer-led econ­omy brings in­ad­e­quate out­comes. Per­haps the clear­est ex­am­ple of gov­ern­ment at­tempts to buck con­sumer-led trends is the con­stant bat­tle to “re­vive the high street”.

A mem­ber of Boris John­son’s in­ner cir­cle said af­ter the gen­eral elec­tion: “If Dar­ling­ton high street isn’t vis­i­bly bet­ter in four years’ time, we’ll be in trou­ble.” Nowhere in that sen­ti­ment ex­isted the pos­si­bil­ity that con­sumers might just pre­fer the con­ve­nience of home de­liv­ery and on­line shop­ping, mak­ing trends away from high streets in­dica­tive of progress. Af­ter yet more cus­tomers flocked to on­line sup­pli­ers through lock­down, the pol­icy im­pli­ca­tions of re­ject­ing con­sumer sovereignt­y be­came clearer. Money was al­ready be­ing pumped into high streets through the Towns Fund. Now min­is­ters are con­tem­plat­ing an on­line sales tax or de­liv­ery charge to “level the play­ing field” be­tween on­line and bricks-and-mor­tar sell­ers.

What­ever min­is­ters claim, an on­line busi­ness choos­ing to forgo ex­pen­sive in­ner-city prop­er­ties and the higher busi­ness rates they bring is not some un­fair ad­van­tage. If politi­cians re­ally thought the tax sys­tem was tilt­ing the deck against the high street, they could re­vise busi­ness rates. The truth is, this pol­icy to hurt on­line sell­ers is be­ing con­tem­plated be­cause politi­cians think they know bet­ter than us what re­tail should look like. How­ever much we value on­line de­liv­ery, they are con­vinced we want or need the re­turn of bustling Fifties-style town cen­tres.

Though it might seem pro-con­sumer – given it sub­sidises con­sump­tion – a sim­i­lar sen­ti­ment un­der­pins the re­cent “Eat Out To Help Out” ini­tia­tive. No doubt we will see a big spike in restau­rant foot­fall on Mon­days to Wed­nes­day as a re­sult. Cus­tomers are not known to look the gift horse of free money in the mouth. But at its core, the pol­icy says that cus­tomers alone can’t be trusted to make de­ci­sions about their so­cial spend­ing habits. In the name of pre­serv­ing the March 2020 econ­omy, the Gov­ern­ment is now ac­tively sub­si­dis­ing in­door din­ing dur­ing a res­pi­ra­tory vi­ral pan­demic. Where once Con­ser­va­tives thought con­sumers’ choices were syn­ony­mous with what was best for them, now Rishi Su­nak, the Chan­cel­lor, sees his role to nudge our con­sump­tion to fit the Gov­ern­ment’s pre-con­ceived ideas of which in­dus­tries should sur­vive.

It is on trade pol­icy, how­ever, where this con­sumer-nudg­ing To­ry­ism could be most con­se­quen­tial. Those who recog­nise that lib­er­al­is­ing mar­kets en­ables con­sumers to bet­ter show what prac­tices, qual­ity and prod­ucts they want are un­der re­lent­less as­sault from Tories rep­re­sent­ing pro­tec­tion­ist in­ter­ests and in­her­ent snob­bish­ness.

In a re­cent ar­ti­cle, Con­ser­va­tive MP Danny Kruger claimed a free-trad­ing agenda post-Brexit risked “a two-tier mar­ket in the UK: lovely sus­tain­ably farmed Bri­tish food for the rich, and cheap for­eign muck for the masses”. Aside from the in­cred­i­ble parochial­ism of this sen­ti­ment, note the im­pli­ca­tion: free trade in food was un­de­sir­able in part be­cause con­sumers might make ghastly de­ci­sions about what to buy.

Be­hind much op­po­si­tion to free con­sumer choice lays this view that the pro­les might pur­chase things of qual­i­ties our bet­ters dis­ap­prove of. Kruger masks this with ar­gu­ments for why agri­cul­ture is dif­fer­ent, in the same way his Tory com­mu­ni­tar­ian friends say high streets are dif­fer­ent, or the mod­ern in­dus­trial strate­gists say man­u­fac­tur­ing is dif­fer­ent.

Yet strip away all the filler about things mar­kets can­not pro­vide or the need for bet­ter con­sumer in­for­ma­tion, none of which re­quires pro­tec­tion­ism, and you see the sim­ple de­sire to “stop our farm­ers be­ing too badly un­der­cut by in­fe­rior cheap im­ports”.

Not only would Kruger ban chlo­ri­nated chicken from the US, the bête noire of up­per-mid­dle class lore, but he would use tar­iffs to “drive up the prices of im­ports on food made with prac­tices we don’t use here”. In other words, he re­jects the idea con­sumers are best placed to de­cide what to eat.

There have al­ways been ten­sions within the Con­ser­va­tive Party about free trade and the de­gree to which con­sumers need reg­u­la­tory pro­tec­tion from rogue sell­ers. But what we are see­ing here is some­thing deeper. Con­ser­va­tives in­creas­ingly re­ject the idea of the sovereign con­sumer shap­ing eco­nomic life. Whether it be sub­si­dies, taxes, reg­u­la­tions, or tar­iffs, more and more Tories re­ject our free choices in favour of them de­cid­ing for us, or nudg­ing us in their pre­ferred di­rec­tion.

Shop­pers in Lon­don’s Ox­ford Street. Cus­tomer num­bers have de­clined since wear­ing face cov­er­ings in shops be­came com­pul­sory on July 24

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