How Osborne humiliated Tory minister Chloe Smith

Watch: Treasury minister gives car-crash interview on Newsnight after Osborne's fuel duty U-turn.

After George Osborne's surprise decision to scrap the rise in fuel duty, it was left to junior Treasury minister Chloe Smith to explain the government's behaviour on last night's Newsnight, with excruciating results (watch from 6:19 minutes). As Paxman repeatedly asked when she was told of the decision (one was reminded of his famous duel with Michael Howard), Smith could only reply that she wouldn't give a "running commentary" on government policy-making and that it had been "under discussion" for some weeks. Her humiliation continued as she was asked to reconcile the move with her statement last month that "it is not certain that cutting fuel duty would have a positive effect on families or businesses". Smith simply replied: "It's important to do what you can to help households and businesses".

One was left with the impression of a junior minister hopelessly trying to account for the government's chaotic decison-making. As Paul Waugh revealed on his blog, as late as 12:30pm Tory backbenchers were being told to take the line that Labour's call for a freeze in fuel duty was "hypocrisy of the worst kind". He notes: "The Quad did indeed discuss it a month ago, but we still don't know exactly when the final decision was made. Surely not after Cabinet and after the 12.30 Line to Take?" If so, it would explain Smith's supreme discomfort last night.

In Westminster, Osborne is known as "the submarine" for his habit of surfacing only for set-piece events such as the Budget and retreating under water at the first sign of trouble (one is reminded of Gordon Brown, who was nicknamed "Macavity" after the cat "who wasn't there"). And so it proved yesterday. Had he more respect for his Treasury colleagues, he would surely have appeared himself and spared Smith her humiliation. Unfortunately for the 30-year-old minister, who is envied by older Conservative MPs looked over for promotion, she will find few sympathisers on the Tory backbenches.

Chloe Smith, the economic secretary to the Treasury, struggle to explain the U-turn on fuel duty on last night's Newsnight. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The EU’s willingness to take on Google shows just how stupid Brexit is

Outside the union the UK will be in a far weaker position to stand up for its citizens.

Google’s record €2.4bn (£2.12bn) fine for breaching European competition rules is an eye-catching example of the EU taking on the Silicon Valley giants. It is also just one part of a larger battle to get to grips with the influence of US-based web firms.

From fake news to tax, the European Commission has taken the lead in investigating and, in this instance, sanctioning, the likes of Google, Facebook, Apple and Amazon for practices it believes are either anti-competitive for European business or detrimental to the lives of its citizens.

Only in May the commission fined Facebook €110m for providing misleading information about its takeover of WhatsApp. In January, it issued a warning to Facebook over its role in spreading fake news. Last summer, it ordered Apple to pay an extra €13bn in tax it claims should have been paid in Ireland (the Irish government had offered a tax break). Now Google has been hit for favouring its own price comparison services in its search results. In other words, consumers who used Google to find the best price for a product across the internet were in fact being gently nudged towards the search engine giant's own comparison website.

As European Competition Commissioner Margrethe Vestager put it:

"Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.

"What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation."

The border-busting power of these mostly US-based digital companies is increasingly defining how people across Europe and the rest of the world live their lives. It is for the most part hugely beneficial for the people who use their services, but the EU understandably wants to make sure it has some control over them.

This isn't about beating up on the tech companies. They are profit-maximising entities that have their own goals and agendas, and that's perfectly fine. But it's vital to to have a democratic entity that can represent the needs of its citizens. So far the EU has proved the only organisation with both the will and strength to do so.

The US Federal Communications Commission could also do more to provide a check on their power, but has rarely shown the determination to do so. And this is unlikely to change under Donald Trump - the US Congress recently voted to block proposed FCC rules on telecoms companies selling user data.

Other countries such as China have resisted the influence of the internet giants, but primarily by simply cutting off their access and relying on home-grown alternatives it can control better.  

And so it has fallen to the EU to fight to ensure that its citizens get the benefits of the digital revolution without handing complete control over our online lives to companies based far away.

It's a battle that the UK has never seemed especially keen on, and one it will be effectively retreat from when it leaves the EU.

Of course the UK government is likely to continue ramping up rhetoric on issues such as encryption, fake news and the dissemination of extremist views.

But after Brexit, its bargaining power will be weak, especially if the priority becomes bringing in foreign investment to counteract the impact Brexit will have on our finances. Unlike Ireland, we will not be told that offering huge tax breaks broke state aid rules. But if so much economic activity relies on their presence will our MPs and own regulatory bodies decide to stand up for the privacy rights of UK citizens?

As with trade, when it comes to dealing with large transnational challenges posed by the web, it is far better to be part of a large bloc speaking as one than a lone voice.

Companies such as Google and Facebook owe much of their success and power to their ability to easily transcend borders. It is unsurprising that the only democratic institution prepared and equipped to moderate that power is also built across borders.

After Brexit, Europe will most likely continue to defend the interests of its citizens against the worst excesses of the global web firms. But outside the EU, the UK will have very little power to resist them.

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