Tackling monopoly power

Over the years debating fair trade versus free trade, I have come to the slightly woolly conclusion that they don’t have to be opposed to each other. But that does mean making a clear distinction between Liberal free trade (the right of free people and communities to do business with each other, or not) and Conservative free trade (the right of the rich and powerful to ride roughshod over anyone).

What makes the difference between the two, and guarantees some chance for Liberal free trade to flourish, is being vigilant against the abuse of monopoly power. This used to be a central plank of Liberal economic policy until the 1950s and 60s, then – for some reason – the party forgot about it.

This was immensely damaging because the Labour tradition wasn’t interested, regarding anything about business as anathaema, and the Conservative tradition was primarily concerned with the rights of the powerful and the economic fantasy of trickle-down.

As a result, we wake up this week to hear the miserably pusillanimous report of the Competition Commission on BAA, wondering if it was possible that their monopoly of UK airports was damaging consumers.

Well, of course it is damaging consumers. How could it not be, when the main focus of BAA is currently to keep consumers captive and in their shops and to pay off their hideous debt mountain? Where is the pressure to be nicer to the poor benighted passengers?

Why this extraordinary ignorance about the effects of monopoly? Is it New Labour ideology? Is it a naïve believe in the efficiencies of scale? Actually, having met a few of them at the Competition Commission, I think it’s worse than that – it is a massively naïve belief that if a business situation exists, then consumers must have chosen it to be so.

Either way, it is time Liberal Democrats made the issue of monopoly their own.

I feel this very strongly this week because of an article in the Sunday Telegraph last weekend about how Tesco was dealing with food price inflation by squeezing their suppliers.

This might help consumers in the short-run. But if they abuse the monopoly power shared by the Big Four supermarkets and squeeze these suppliers too far, as the article hinted, then we will lose our local capacity and will face massive inflation as the supermarkets seek out suppliers overseas.

When you think that the Big Four currently abuse their monopoly position by insisting that they can pay suppliers after 90 days, rather than the 30 days accepted by their small competitors – giving themselves a rolling interest free loan equal to two months of their entire stock – the chances of them accidentally rolling over a portion of UK agriculture is not beyond the bounds of possibility.

And now that Tesco is trying to gaol critics in Thailand, and silence the press in this country with their ferocious legal action against the Guardian – we libertarians need to keep our attention as closely on them as we do on the antics of their friends in the government.

Missing narrative

For goodness sake. Why is it that our London mayoral campaigns are so bad at projecting any kind of big idea or vision?

I’ve just watched Brian Paddick, an excellent candidate in so many ways, on the Newsnight debate. His opening statement raised a couple of problems, notably knife crime, but offered no believable solution. Even his passionate explanation at the end about what he would do about knife crime was too bland and unspecific to seep into people's minds. In fact, the kind of local partnership between police and neighbourhoods is exactly what was done so successfully in New York, and Brian should have said so far more explicitly.

Nor has there been any distinctive analysis about what’s gone wrong with London: the greedy decision by Livingstone to add another million people to the population of London, with predictable results for transport and public services.

Why is it that politicians, and Lib Dems in particular, are so naive about this - that somehow, just by mentioning a few problems, people will suddenly vote for them? Or that anyone will remember what they say when they haven't the faintest idea what they exist for?