CUTTING ROOM: Gordon tilts at rip-off merchants; how slicker planning would boost business; a surreal check on ministers' performance; luggage levellers ... Evan Davis at large

CUTTING ROOM: Gordon tilts at rip-off merchants; how slicker planning would boost business; a surreal check on ministers' performance; luggage levellers ... Evan Davis at large - 'Price-fixers will go to jail'. It was probably the first time a review of B

by EVAN DAVIS, economics editor, BBC's Newsnight
Last Updated: 31 Aug 2010

'Price-fixers will go to jail'. It was probably the first time a review of Britain's fair trading laws made the front pages. But Gordon Brown's announcement stirred up the neglected area of competition policy.

Now the fun starts. Will supermarket bosses and oil barons be tarred and feathered and wheeled off to Wormwood Scrubs? I doubt it.

For one thing, despite constant tabloid barracking, these industries are constantly cleared of rip-off accusations whenever they're investigated.

Anyway, we have just got a new beefed-up competition law, dating from March 2000; so far one company has been fined under it (but not for price-fixing), and a smattering of cartels are being investigated.

Anyone who thinks that Britain's commercial culture will be revolutionised by beating up a dozen crooked mini-cab firms each year will be sadly disabused.

I'd put pounds 100 on no-one being in jail under this new law by the end of the parliament.

In contrast was the Government's underplayed announcement that it is planning a Green Paper on ... planning. I've long believed this issue deserves more thought. For one thing, the slow pace of planning consents is obstructing the reconstruction of our clapped-out infrastructure; for another, our planning restrictions make it hard to obtain premises for new or expanding companies; third, despite their conservatism, our planners have failed to bar some stupid, ugly and wasteful building projects. Finally, they are inhibiting agricultural diversification. (During the foot-and-mouth crisis, farmers were falling over themselves to tell Newsnight about their run-ins with the local authorities; many said getting permission to open a B&B or similar was more trouble than it was worth.) I have two humble suggestions for the Green Paper. One: forget the ridiculous over-zoning of life into commercial and residential areas. Let people build commercial premises in residential areas, so more of us can actually walk to work.

Two: compensate those blighted by planned infrastructure projects generously.

Transport economist Stephen Glaister of Imperial College told me he thought that was how the French managed to get more done, because generous compensation buys off the opposition, and avoids the seven-year debate that precedes any big project here. If we are too cheap to pay proper compensation, we should ask whether the proposed project is worth building.

My favourite radical think tank, the New Economics Foundation, is suggesting that Government ministers should be paid according to various performance indicators. Tony Blair, for example, would be paid according to 'Happy Life Expectancy', an index of well-being constructed by a Dutch academic.

Robin Cook, Leader of the House, would be paid according to the 'use of non-violent language' in the commons.

Performance rating is a tempting idea, but examples from the New Economics Foundation highlight the three hazards of any kind of performance-related pay. First, I'm not sure that Jack Straw would have taken the job as foreign secretary if he was to be paid in inverse proportion to 'the number of people killed in wars around the world', as the Foundation suggests. In this case, the indicator is a useful measure of foreign policy outcomes, but the hapless foreign secretary has little power to influence it. Second, if Alan Milburn at Health really was paid according to a 'decline in prescriptions' (signifying improving health) he would have a perverse incentive to cut prescriptions to sick people; hardly a desirable outcome. And finally, if David Blunkett at the Home Office was paid according to the public 'Trust Index' (the number of us saying 'yes' to the question 'Would you say that most people can be trusted?'), then we the public might mischievously answer 'no' just to give him a pay cut. It's the old rule that a useful performance indicator can cease to be useful once it becomes important.

With summer hols upon us, am I the last of MT's famously trendy contributors to observe the fashion for those trolley-style suitcases, with extending and retracting handles that allow for easy wheeling and safe stowage?

I should have known these were useful from the fact that airlines everywhere have long equipped their cabin staff with them. Of course, they are not for those who might fear being mistaken for a flight attendant, but it is a reflection of our new more inclusive age that no-one seems to worry about that. I'll have to buy one.

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