Watch out: angry consumers are learning to use their new power

Hamish McRae: 'We are still in the early stages of a consumer revolution that will run for maybe 30 years or more'

Consumers are revolting. Car prices, cash dispenser charges, airfares, mobile phone calls, maybe even petrol prices - all are areas where consumers have shown a new aggression about the prices they are being charged.

Consumers are revolting. Car prices, cash dispenser charges, airfares, mobile phone calls, maybe even petrol prices - all are areas where consumers have shown a new aggression about the prices they are being charged.

In the case of cars, a buyers' strike forced several manufacturers to cut prices, while Ford went as far as offering to reimburse anyone who buys a new car should the prices subsequently be cut. The low-price airlines have revolutionised air travel, forcing the established ones to match their prices. With cash dispensers Barclays has just been forced to recant from its plan to charge non-customers. With mobile phones the combination of tougher competition and an explosion in demand has pushed call charges ever lower. And as for petrol, well, whatever you think about the idea of a one-day boycott (and since most of us fill up only once a week, it does not seem too brilliant an idea) at least consumers are making their feelings loud and clear.

What is driving this new aggression and where will it lead?

It is fairly easy to see why consumer power is on the rise, for there are at least five forces driving it. One is the fact that prices generally are more stable. In a world of high inflation it is very difficult for consumers to know whether they are paying a fair price or not. Besides, there is a natural pressure on buyers to buy quickly because if they don't they know the price will be higher in a few weeks' time. But in a world of stable or falling prices - and the price of many goods is now falling - not only can you recognise when you are being overcharged; you also know that if you wait a bit you may well get an even lower price.

In an inflationary world, wait-and-see buyers were punished. In a deflationary world they are rewarded.

A second force is the internet. Of course, only a tiny proportion of retail sales tale place over the Net, but in some areas, like airline seats, the proportion is much larger - a switch increased by the push to sell on the Net by the budget airlines and by general websites such as Lastminute.com.

Additionally, even when goods are not bought over the Net, it is still used for price comparisons. So it is having an impact on pricing as an information system even when the goods are purchased in the regular ways.

These two new forces on the side of the consumer add to two other long-standing habits: we are travelling abroad much more; and we are importing more.

Travelling abroad affects pricing in two ways: we can see that our prices are out-of-line with international ones; and we can to some extent buy goods abroad if they are significantly cheaper. A quick flip round my colleagues as I write this reveals that several of us are wearing shoes, shirts and socks bought abroad, as well as the more obvious booze, fags, make-up and CDs. If you shop hard enough, you can (as a friend recently in Rome remarked) save the price of your airfare.

Fourth, we are very good at importing at a national level as well as a personal one. The proportion of foreign goods on sale in the UK is significantly larger than in, say, France or Germany and much larger than in the US. So there is constant downward pressure on UK producers from low-cost foreign ones. The more we import, the greater the pressure. Imports have sizzled upwards in the last five years, exerting much more downward pressure on prices than it did during the boom of the late Eighties.

And finally, many old monopolies are being swept away, vastly broadening consumer choice. We can now get our fixed line phone service from several different suppliers; we can get our gas from different companies; there is an explosion of TV firms - and so on. Choice brings freedom and freedom encourages a more robust attitude among consumers.

Pull all this together and you can see a seismic shift in the balance of power from producer to consumer. Consumers are instinctively feeling that power, and learning how to use it. Where they are blocked or disappointed - for example by the level of government tax on petrol or by the quality of care in the NHS - people get very fed up. Even the public sector now feels under pressure to improve its performance and to offer better value for money.

Where will this shift in power lead? We are still in the early stages of this consumer revolution, the first 10 years of a shift that will run for perhaps 30 years, maybe more. But it is already possible to spot some social and political consequences. One political one is that people are defining themselves much more by consumer choice than by political identity. The wiser politicians are rightly concerned at the rejection of political involvement by ordinary people. I recently heard Charles Kennedy point out an alarming fact: that more people belonged to the Royal Society for the Protection of Birds than to all the political parties put together. It was, he argued, a serious failure of politicians as a group that they had not managed to engage with people more directly.

Now membership of the RSBP is hardly an example of consumer awareness: more a sign that people find it easier to identify with the interests of birds than they with the interests of politicians. But I have another statistic. There are more members of the British Airways Executive Club - more than 2.5 million - than there are of all the parties, too. People define themselves by what they buy rather than whom they vote for. There is a further point here. Those BA Executive Club members live all over the world. So people are prepared to define themselves globally in a way that they are reluctant to do nationally. Consumerism and globalism are inextricably entwined.

A world of more demanding consumers is also a world of democracy: ordinary people exerting their power to change the conditions in which they live by using their cheque-books and credit cards rather than their votes. We find ourselves voting every couple of years, and may not get our choice when we do. We use our purchasing power every day and usually do get our choice. Or at least when we don't, we show our displeasure - as the banks, car companies and airlines are finding to their cost.