Paul Abbott is Chief Executive of Conservative Way Forward and an Associate Director at Portland Communications.
Sajid Javid – our first pro-business Business Secretary in almost 20 years – was on fine fighting mettle last week, at the BIS Select Committee. The discussion chuntered this way and that before it delved into regulation. Or deregulation to be precise. TfL’s latest 28-page misanthropy cropped up slightly (see background here and here). At which point, Javid replied:
“I think what is going to be a big test for the review is does the review come out on the side of Londoners? Ordinary Londoners and consumers want choice: they value competition. I think that will be something that a lot of people will be looking at… I want to make sure that consumers are put first.”
The point about excessive rules and regulations – which the Business Secretary made squarely – is that removing them works like a tax cut for British business. With one key difference: deregulation doesn’t cost us a penny. It is free. It is sunshine. It is clean air.
As the Government’s “laser-like” focus returns to the rule-slashing Enterprise Bill – and beyond it to the broader sweep of the next five years – there are some reasonable questions to be asked. What is its attitude to risk, and disruption? How far, really, is Britain prepared to go?
Let me give you a historic example, to illustrate the opportunity: the red London bus. Being a sad git, I visited the London Transport Museum last weekend with my wife and daughter. I’m a nerd for all that sort of thing. There on one of the display boards, it jumped out at me. Allow me to present to you – ladies and gentlemen – the grand history of the London bus. Because, as the museum so colourfully narrates: the London bus was our first, privatised, modern, ride-sharing platform. It was the original “disruptive technology” of its day. And therefore, it is worth looking at a trifle more closely, as we consider the headlines of the last few days.
The story of the London bus runs something like this. Two centuries ago – aeons before smartphones; back when Queen Victoria was still a young girl – the hackney carriage was still a horse-drawn affair, rolling haphazardly out of the primordial gravy of Hyde Park. Picture the scene! The year is 1829, and a second outbreak of cholera is ravaging the world. Britain still has appalling slums. Slavery will not be outlawed for another four years. The great Conservative reformer, Robert Peel, is fighting to establish the Metropolitan Police. King’s College London is being opened by a Tory Prime Minister, the Duke of Wellington, and he names it as “England’s third university”! Over the horizon, unnoticed, out of sight: the last of the Bounty mutineers is dying at Pitcairn Island.
And, somewhere in a semi-forgotten corner of our capital city, a poor tradesman called George Shillibeer spies a plum business opportunity. An “omnibus”, he calls it, from the Latin words meaning “for all”. In reality it is a ramshackle, crudely painted, horse-drawn carriage, plying the muddy dash between Paddington and the City. But, there is a difference. This carriage carries more than one passenger at once!
Ride-sharing! New technology! You can imagine the uproar. The middle-class horror. Picture the objections from the hackney carriage PR-men! Perhaps if Sadiq Khan had been alive to see such news, the Tooting MP would have raised a formal objections in Parliament. The surprising truth is this. It was not Whitehall bureaucrats who birthed the London bus. No, it was the free market, with all of its sweaty, disruptive mayhem. There is a important truth here. Namely: that people love a bargain and capitalism generally will find a way to provide one. It is human nature. Look at Henry Ford, and his motor car. Look at EasyJet, and their flights to Spain.
The London bus was one of the first meaningful efforts to democratise the luxury of the hackney carriage – in fact – and to make it affordable for the ordinary London masses, in a way that had never been done before. What does that remind you of today?
As you might expect, competition spurred more competition. This was the nineteenth century, remember: the romantic poets were slipping off the boil. Napoleon was dead. A young Republican called Abraham Lincoln was starting to make waves in Washington D.C. The times they were a’changing! New business entrants to the bus trade – upstart firms like Thomas Tilling Ltd – started out as one-man bands, but were rapidly growing. As tends to happen, the disruptors had became the disrupted.
Thomas Tilling’s tactics were novel, and he astounded his punters with his shocking new technology. His buses started using pre-agreed “stops” and a fixed timetable, for example, to outflank the opposition. Bus stops! Such things may seem tediously pedestrian now, but this was radical at the time. And, critically, the evolution of the bus was being driven headlong by the free market: the raw demand of hungry punters, pushing, jostling, shoving to all get a better deal. It was not some dreary, pen-pushing regulator who gave us the double-decker bus, the bus-stop, the fixed timetable, and the dependable joys that we so love today. No! It was a have-a-go band of entrepreneurs, trying to earn a crust on the margins of our capital city. Thank goodness for them!
Sadly – however – our bus market in London has now become almost entirely dominated by City Hall and its quangoes. We have fewer London buses as a result, with higher fares, which are less responsive to demand. This illustrates the wider point made by Sajid Javid to the BIS Committee. Despite privatisation of some bus routes, London’s bus market is still sclerotic and over-regulated, in my view. The energy and pure dynamism of those 19th century years has been throttled out of existence, with rule books, licencing authorities and opaque barriers to entry. I am forbidden, for example, from setting up my own family-owned bus and trying to make money – even if my only aim is to help Londoners get to work along at rush-hour. Why? Britain can do better than this.
It is a complicated issue, and it is well to avoid simplification. But the first and most obvious thing to remember in all of this is that the debate about London congestion is at least 200 years old: it is not a recent phenomenon. So, as we read the more modern headlines, we would do well to remember what happened last time. Second, it is difficult now to avoid the analysis – and especially so with the London bus – that innovation means lower prices. And third, you have to really struggle, to picture any possible scenario in which sane Londoners would argue that the invention of the bus was somehow “a bad idea” – now that it has been established, and now that it has been proven to be wildly popular.
So, deregulation – more please, and faster. And my advice to the TfL bosses would be this: visit your own museum. Because, as you stroll between the worn-out automobile engines, red omnibus husks, and wood-panelled carriages, you sense that these things are exciting because they were once part of a grassroots revolution. The London bus was once a mad experiment by a few zealots, tinkering on the fringes of respectability. It was once the preserve of entrepreneurs who saw a social problem and believed that it could be solved through private enterprise. And the story of it confirms one of the oldest Conservative instincts, too. That mankind’s ability to help one other is truly extraordinary – if only the authorities will get out of our way.