At the beginning of last year, I wrote a post for my old stable on what I called “the new politics of leaning on business”. It was inspired by two trends at the time: 1) all the party leaders were posing as consumer champions, attacking companies for excessive prices, and 2) they figured that the best way to bring those costs down was the threat of action, rather than direct action itself. Leaning on businesses was preferred to legislating against them.
Fast-forward almost two years, to the present-day, and the first of those trends is still, well, trending: the party leaders are working overtime to secure the “cost of living” vote at the next election. But the second trend has certainly slowed, if not broken down completely. More and more politicians are advocating legislative action against, in particular, the energy firms. Ed Miliband’s price freeze is the prime example of this. His plan to force public sector transparency rules on private sector companies that work for the taxpayer – revealed in the Sunday Times (£) today – is another. John Major’s windfall tax is still another. For many, leaning is no longer enough.
What’s striking, though, is that the Tory leadership appears to be resisting this change. Two stories in today’s papers suggest that they still want to lean on companies rather than legislate the living daylights out of them. First up, Greg Barker’s ultimatum that the energy companies should repay people the £millions that have been overpaid in bills, or they may face fines. Second, Grant Shapps’ ultimatum to the BBC that it could face budget cuts if it doesn’t work to overcome its culture of secrecy and waste. Both ultimatums carry the threat of direct action – fines and budget cuts – but it is, for now, just a threat. The energy companies and the Beeb can chose to act themselves.
(NB: Even where Cameron & Co. are talking about direct legislative action it’s not necessarily action against the companies in question. The idea behind cutting green levies is, in part, to remove some of the obligations from businesses that are then transferred to the consumer in the form of higher prices. The most immediate loser would be the Exchequer, which would have to plump up its revenues with money from elsewhere.)
This tactic is rather a risky one for the Tories. It can, after all, look softer than Labour’s, and at a time when the quality of mercy is under some strain. And there is also the possibility that companies will simply lean back, refusing to comply with the Government’s threats.
But the Tory leadership will be taking this risk for a reason. As Adam Boulton says out in his Sunday Times column (£), “Miliband’s problem is that nobody beyond the Labour core seems to believe in his freeze, to the evident relief of Conservatives digesting the latest data from focus groups.” The Tories surely calculate that, against that, their more restrained approach will deliver measurable and believable results, whilst also accomplishing the feat of sounding tough on errant businesses but not actually anti-business. Will it work? As one inveterate leaner made clear, there’s a lot of hope involved.