Leading Article: As the world shrinks, consumers are the new champions

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The Independent Culture
YESTERDAY'S DEMONSTRATION by truck drivers in London, against Treasury increases in excise and diesel duties, revealed more than just one industry's grievances. It also revealed how much power globalisation is giving consumers, over both the state and large multi-national businesses.

The truckers had a valid case to make. Tempted by an alluring "green" tinge for their policies, while at the same time bringing in vast amounts of revenue, successive ministers have continuously increased petrol and excise duties in order to cut taxes elsewhere. This Government has been no different. Gordon Brown's recent Budget saw such taxes rise way above the rate of inflation, excise duty rising to 12 times that paid by truckers in France. But it is the haulage industry's highlighting of those disparities that is the new and interesting feature of their protest.

With Continental hauliers increasingly active in Britain, and the volume of intra-European trade increasing, the comparisons were inevitable. In the long run, the industry should look to itself for salvation: new fuels and more efficient trucks will help. But disgruntled industries such as haulage will also increasingly turn to Europe - so demonised in certain sections of the British press for promoting inevitable tax rises - as the only forum in which to deal with tax variations in a single market. Haulage is one demonstration of how more European co-operation on consumption taxes could lessen the burden on business rather than increase it.

Exorbitant national taxation is not alone in its new high profile. British consumers are increasingly aware that British firms, as well as the Government, are living more comfortably off them than their counterparts elsewhere. The cost of cars in this country is a notorious example, subject to a recently launched Monopolies and Mergers Commission inquiry. If strict European Union rules on price variation were obeyed, the price of cars would come down overnight. An EU attack on the showroom cartels that inflate car prices would mirror its social action for the low-paid embodied in the Social Chapter of the Maastricht Treaty. If the EU were to be seen acting for consumers as well as workers, it could begin to leave behind the image of an out-of-touch bureaucracy and claim a new popularity. The case also needs to be made that the advent of the euro will promote price transparency.

The car industry is outstripped in public opprobrium only by British supermarkets, which are soon to learn whether they, too, will be referred to the Monopolies and Mergers Commission. Significantly, the Government is threatening to publish price comparisons between British and foreign supermarket goods in order to "name and shame" those charging more than the international norm.

We are witnessing the birth of a smarter consumer, boosted by an Internet still in its infancy but already making an impact on industries as diverse as publishing and tourism. The increasing prevalence of international travel and trade in all industries has seen press and politicians unable any longer to rely on public ignorance as an excuse for inaction on competition, taxation and prices.

In a fast-changing economy, companies such as Microsoft can maintain a comfortable technological dominance for only a few years before that same dynamism proves their undoing as smaller, newer companies take advantage of the trail they have blazed. Newly mobile and educated consumers demand no less, as Europe's leaders should now realise. Competition policy will have to be given more teeth. But politicians should realise that governments are businesses of a sort, too, and that, if they charge too much, the voters may desert them as well as profiteering companies.