London: The collapse of a belief system paralyses and terrifies in equal measure. Certainties are exploded. A reliable compass for action suddenly becomes inoperable. Everything you once thought solid vaporises.
Owen Paterson, secretary of state for the environment, food and rural affairs, is living through such a nightmare and is utterly lost. All his once confident beliefs are being shredded. As the horsemeat saga unfolds, it becomes more obvious by the day that those Thatcherite verities that the market is unalloyed magic, that business must always be unshackled from “wealth-destroying” regulation, that the state must be shrunk, that the EU is a needless collectivist project from which Britain must urgently declare independence are wrong.
Indeed, to save his career and his party’s sinking reputation, he has to reverse his position on every one. The only question is whether he is sufficiently adroit to make the change.
Paterson is one of the Tories who joyfully shared the scorched earth months of the summer of 2010 when war was declared on quangos and the bloated, as they saw it, “Brownian” state. The Food Standards Agency was a natural candidate for dismemberment. Of course an integrated agency inspecting, advising and enforcing food safety and hygiene should be broken up. As an effective regulator, it was disliked by “wealth-generating” supermarkets and food companies. Its 1,700 inspectors were agents of the state terrifying honest-to-God entrepreneurs with unannounced spot checks and enforced “gold-plated” food labelling. Regulation should be “light touch”.
Budget cuts
No Tory would say that now, not even Paterson, one of the less sharp knives in the political drawer. He runs the ministry that took over the FSA’s inspecting function at the same time as it was reeling from massive budget cuts, which he also joyfully cheered on. He finds himself with no answer to the charge that his hollowed-out department, a gutted FSA with 800 fewer inspectors and eviscerated local government were and are incapable of ensuring public health.
Paterson, beneath the ideological bluster, is as innocent about business as Bambi. Even the most callow observer could predict that with the wholesale slaughter of horses across the continent as recession hit the racing industry horsemeat production jumped by 52 per cent in 2012 some was bound to enter the pan-European network of abattoirs, just-in-time buying, industrial refrigeration units, food brokers and giant supermarkets that deliver British and European consumers their food.
Meanwhile, the budgets of some local government food sampling units have been slashed by 70 per cent. A Tesco beef burger containing 29 per cent horsemeat was an accident waiting to happen. Of course it was the Food Safety Authority of Ireland rather than the FSA that blew the whistle. Businesses owned by footloose “tourist” shareholders whose sole purpose is profit maximisation in transactional markets have an embedded propensity to degrade. Consumers and suppliers alike become no more than anonymised numbers to be exploited to hit the next quarter’s profit target.
Alternative world
The large supermarkets have said little or nothing, which Number 10 deplores. There is nothing they can say. They have lobbied for the world in which we now live. An alternative world in which consumers were genuinely served and where it is understood that suppliers need adequate profit margins in the supermarkets’ interests as much as the suppliers’ own has to be created by stakeholders, including by government. There is a codependency between state, society, business and business supply chains, anathema to Paterson with his undeviating obeisance to the virtues of a “private sector” free from such “burdens”.
What the Paterson worldview has never understood is that effective regulation is a source of competitive advantage. If Britain had a tough Food Standards Agency, it would become a gold standard for food quality, labelling and hygiene. British supermarkets and food companies could become known for their quality at home and abroad, rather as “over-regulated” German car companies are, rather than first suspects when something dodgy is going on. Capitalism does not organise itself to deliver best outcomes, whatever rightwing American thinktanks might claim. There has to be careful thought, law and regulation about the obligations that accompany incorporation and ownership, how supply chains are organised and how companies are managed and financed. Otherwise disaster awaits.
