CUTTING ROOM: The OFT flicks a wet towel; contractors' lobby swings the other way; why PIN-heads will swap to Switch; Michael Moore quits on a high ... Evan Davis at large,

CUTTING ROOM: The OFT flicks a wet towel; contractors' lobby swings the other way; why PIN-heads will swap to Switch; Michael Moore quits on a high ... Evan Davis at large, - I know that we're all meant to support competition and loathe monopolies, cartel

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

I know that we're all meant to support competition and loathe monopolies, cartels and rip-off merchants. And I know we're supposed to support the Office of Fair Trading in its noble attempts to uphold fair play between business and consumers. But isn't the OFT getting a bit overzealous on behalf of the public?

It is threatening to use its powers against unfair contract clauses imposed by fitness clubs. The OFT cites as unfair: 'Lockers are provided on a daily basis only, and any items left overnight will be removed from the lockers and disposed of accordingly.' Pardon me, but I see little wrong with this clause. It might be harsh of a gym to dispose of clothes left overnight, but is it really the job of a government agency to outlaw such a rule? I can think of far worse features of modern capitalism.

The authorities in general are inclining towards excessive activism in enforcing fair trading. There was the Competition Commission report on small-business banking, which at a stroke ushered in a new era of bank price regulation. (The losers are banks such as Abbey National that are trying to break into the small-business market and now find their price advantage over expensive rivals eroded).

So why this outbreak of populist attacks on business? Why don't the authorities have more faith in the mechanism of competition they are there to uphold?

Can they not apply their own powers as judiciously as one suspects the typical gym applies its right to dispose of clothes left overnight in a locker?

One of the worst moments in my television career was a run-in with the Professional Contractors Group. The PCG exists mainly to represent IT contractors, and it was vociferous in campaigning against the IR35 measure - Gordon Brown's attempt to crack down on employees of large firms defining themselves as contractors and so paying far less tax than colleagues on employment contracts. In reporting on IR35 for Newsnight, I inadvertently exaggerated the tax loophole contractors could exploit, and found myself (and my superiors) inundated with rude e-mails from the IT industry.

The PCG argued that IR35 would force IT workers to quit Britain for countries that did not try to get them to pay tax. I found the threat implausible, and wondered whether we should bribe workers to stay by overlooking holes in the tax system.

That's all history. But the PCG is now lobbying against the issuing of fast-track visas to foreigners flocking into Britain to work in the IT industry. Government has always wanted to attract people with key skills, but it seems that the PCG's case is that, far from being short of IT workers, Britain has them in such abundance that we can do without immigrants.

I've always admired those who can make a 180-degree turn when confronted with facts that so demonstrably destroy their previous case. Well done, PCG, for being mature enough to change your mind.

Time to sell shares in credit card companies. It won't be long now before Britain follows France in requesting shoppers using plastic to type their PIN into a small device, rather than just sign a slip. The PIN method is far more secure than a shop assistant casting a fleeting glance over a worn-out scrawl. I'm happy to report that some UK cards are now being issued with smart chips embedded in them, in readiness for the changeover.

So why the problem for credit cards? Well, anecdotal evidence suggests nobody knows their credit card PIN. We'll use our debit/cash machine cards instead, as we can remember their four-digit number. In other words, when the switch comes, it'll be Switch that benefits.

Not long now before we say farewell to the director-general of the World Trade Organisation, the New Zealander Michael Moore. He's had a rough few years, what with riots at Seattle, critics of globalisation and trade, and tough-talking between WTO members. Yet, despite the negative comment, he's held his own with some good lines ('The WTO does not kill turtles'), and at least trade talks are proceeding. Moreover, Oxfam has now published a tract in favour of more trade with poor countries - just what Moore has been arguing for.

Welcoming Oxfam's call for open markets, he points out the benefits of trade: since 1900, average life expectancy has risen from 30 to 67; and since 1970, the proportion of the developing world population with access to clean drinking water has risen from 30% to 80%. There's clearly more to be done, but Moore can bow out with his head held high

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