David Cameron has joined in the Tesco-bashing, but the OFT should leave it alone. And the IMF is proving better at spin than at giving poorer countries votesby P L / June 25, 2006 / Leave a comment
Published in June 2006 issue of Prospect Magazine
It’s fashionable to have a go at Tesco, so it’s no surprise that David Cameron has joined in. Keen to show that he’s not in the pocket of big business, the Tory leader recently warned Britain’s biggest supermarket chain to “behave responsibly.” Worse, on the same day, the office of fair trading (OFT) announced that it would refer the supermarket sector to the competition commission—less than a year after ruling that Britain’s £125bn-a-year groceries market was sufficiently competitive.
The OFT claims its about-turn has come about since more evidence came to light. More likely its new boss John Fingleton is bowing to pressure from lobby groups which hate supermarkets. But while bashing Tesco may be clever politics, it is not sound economics. And it makes a mockery of government competition-policy reforms, which were meant to take politics out of antitrust decisions. Although farmers, environmentalists and small shopkeepers may not like it, shoppers use Tesco because it gives them what they want: an ever wider range of ever more affordable food. Judging by the performance of its overseas ventures, Tesco is also an international success story. Cameron may regret his opportunism; the OFT’s boss certainly should.
The IMF proves a good spinner
Rarely have the IMF’s spring meetings enjoyed such coverage. A “breakthrough in the governance of the global economy,” splashed the FT; the IMF, said the Guardian, is becoming a “world economic watchdog.” Gordon Brown, who chairs the fund’s key policymaking committee, knows how to spin.
The IMF has been rather idle lately: there haven’t been any big financial crises recently and Asian governments, notably China, have been piling up vast reserves of foreign currencies to insure themselves against such a calamity—doing…