It’s been a busy week on the policy announcement front. Government announcements on plain cigarette packets and on capping the interest on payday loans, along with a request to energy providers to cap prices to 2015, have all been presented as U-turns on issues on which Labour has made the running (although unkind people have suggested that plain fag packets will allow Liberal Democrats to develop their economic policy in time for the election).
In fact, they’re nothing of the sort. I’d argue that in every case the purpose of the policy is to concede ground in order to allow corporate interests to continue business as usual. On energy prices, Cameron is asking hugely profitable businesses that have just raised their prices by 10% not to do so for the next 18 months; but the real point of Labour’s hugely popular policy is not the price freeze – welcome though that is – but the root-and-branch reform of a broken market that accompanies it. Payday loans are part of the cost-of-living crisis, but Tory policy is light on detail and I’d have thought that lenders would have priced a reduction in up-front interest rates against the likely long-term gains from continued economic stagnation and falling real pay. The plain packaging of tobacco looks like politics pure and simple – a desire to deal with consistent flack over Lynton Crosby’s links to the industry – but there’s quite a lot of evidence to suggest that in terms of tobacco companies’ bottom line, the effect is symbolic; there are other, more important drivers of profit; the undoubted hit from plain packaging can be offset by gains from elsewhere.
In all cases, we see businesses with close links to the Conservative Party being prepared to take a short-term hit in order to maintain their long-term structures intact. Government announcements are motivated by fear – they know that Ed Miliband is winning the argument over energy prices in particular – but also by what looks increasingly like the only real aim of the Condem Government: to look out for their chums. This is all about the need to be seen to be doing something while, in reality, making sure that their supporters can carry on with business as usual.