This article was written by John Penrose and originally published in The Telegraph
In September 2020, Rishi Sunak (then the chancellor) commissioned me to write an independent report on how the UK’s approach to competition and consumer issues could be improved. The pandemic was scarring our economy and the Brexit transition period was about to end, so Britain would need a springboard of renewed energy and dynamism to grasp the opportunities and overcome the challenges of its newly independent, sovereign status.
My report was called Power to the People. It proposed 30 ideas to provide stronger competition and consumer choices which, in turn, would mean more jobs, make exporting firms more likely to win contracts, help with levelling up outside London and the South East, and give British consumers and business customers a wider range of high-quality goods and services at more competitive prices.
It also pointed out that there would be broader benefits from these reforms, because societies where firms have to compete hard to attract and retain customers are fairer, with less injustice, because rip-offs can’t become as serious, or last as long, and because people are confident that the system is on their side.
Now, 18 months, three chancellors and two prime ministers later, I’m publishing an update to assess what progress has been made so far and what’s left to be done. It’s called Unfinished Revolution because only half of the 30 ideas have either been done or promised so far. We made good progress for the first 12 months, but then momentum slowed to a crawl. Now Rishi is back in government as Prime Minister, we’ve got to get moving again or we will be leapfrogged by more competitive international rivals.
There’s a lot to do. Unfinished Revolution finds the way we have regulated some firms in industries such as energy or telecoms has been too soft, letting incumbents get away with providing services that are more expensive and lower quality than they should be; that rules in the energy industry need a radical overhaul because they haven’t let falling prices for renewable energy feed through into household bills; that the planned “bonfire of red tape” is barely smouldering so far; and that we need stronger rules to stop “buy to gut” foreign investment in British startups, while still encouraging “buy to build” deals too.
Even worse, the global economic picture has become steadily gloomier over the past 18 months. The after-effects of Covid on international supply chains are pushing up inflation, stoked by spiralling energy prices from Russia’s invasion of Ukraine and rising international interest rates too. With government debts that are still uncomfortably high from the triple hangover of bank bailouts in 2008, followed by Covid furlough payments and now subsidies for everybody’s energy bills, there’s much less financial firepower than usual to spend or borrow our way out of trouble.
It helps that these unfinished reforms would be cheap. Most would cost taxpayers nothing, or even save money by making internal processes faster and more efficient, and all of them would unclog the arteries of our economy by helping firms grow faster and become more internationally competitive: reforming the economic regulators that cover important sectors of our economy; pouring petrol on that bonfire of red tape to get it burning merrily; or speeding up competition legal processes so that firms know where they stand on most cases in weeks or months rather than years.
Instead, the costs would be political rather than financial. The unfinished ideas are the most difficult reforms that will upset well-entrenched bosses, bureaucrats and regulators. But they are also some of the most valuable, because they would cut costs for families, and help entrepreneurs create jobs and products that win export orders. They need political guts to overcome the resistance from everyone happy with the status quo.
But if we don’t press on with them quickly, we’ll be overtaken by our competitors at precisely the moment when post-Brexit, post-pandemic Britain needs to be as nimble, productive and dynamic as possible. Now Rishi is Prime Minister, he’s perfectly positioned to make it happen: let’s see what he can do.