Maybe a businessman can solve this problem

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The Independent Online
Appointing businessmen to head up the various task forces Labour is setting up on the big, burning issues of our time must seem like a bit of a betrayal to those still hankering after the ways of old Labour. Gone are beer, sandwiches and overalls. In comes chardonay, canapes and lounge suits (preferably Armani or alternative designer label). But it is also a clever move, not just because it helps bind big business into the new administration, but because it might, just might, help the Government find solutions as well.

Take tax and benefit, where Martin Taylor, chief executive of Barclays Bank, was yesterday appointed to head up the inter-departmental task force. This is a big, big subject. Whole libraries have been written on it, many hundreds of people have devoted their lives to researching it. But no government has ever managed to get to grips with it.

The political will has certainly been there, perhaps more so under the old government than the new, but somehow nothing ever gets done outside a little ineffective tinkering. The issues seem too complex, too intractable for any government to steer its way through.

Why should a businessman or banker be any better at it than all those civil servants and politicians who have already tried and failed? There are plenty of reasons for believing they may actually be worse. Businessmen can operate in a very cocooned environment and quite often know little about the world outside the markets in which they operate. What they know about management and knocking heads together, moreover, is generally learnt within the hire and fire, faintly military environment of a big organisation. Public life, with Parliament and an electorate to answer to, is an entirely different ball game.

Nonetheless, applying the businessman's single-minded approach to the problem might help. It is not, after all, Mr Taylor's brief to decide on policy. His is the more technical one of bringing rational analysis to the problem, helping to devise a range of different solutions from which ministers can chose. Furthermore, he comes at the issue like a company doctor, unhindered and uninfluenced by the past and all its baggage. As every businessman knows, there are always hundreds of reasons, most of them very good ones, why something cannot be done. Mr Taylor's task will be to help find ways of overcoming them, which is not so very different, when you think about it, to what he does already.

Brown's audit could be more than a gimmick

What a splendid picture of economic health yesterday's figures for government borrowing present. Strong growth is boosting tax revenues above the cautious Treasury forecasts. Its target for the year looks like being far too pessimistic. If the previous lot were still in power, they would be crowing about it, with some justification.

But before concluding that everything is hunky-dory with the public finances, we should remember that the outlook for the PSBR also depends on continuing to meet tough spending plans. Though not impossible, the catch with these plans is that they imply a progressively tighter squeeze on public services for which demand grows over time, especially health and education.

The Government has promised to address this problem by setting clear priorities in spending. "Bad" spending on unemployment and other benefits will make way for more "good" spending on health and education. That's the idea, anyway. Gordon Brown's plan for an audit of the government's books and his promise of tough new rules in tonight's speech to the CBI to police spending have to be seen in this context. In one sense, it is just a gimmick. There is already plenty of information about the public finances and we do not need an independent audit to make a reasonable assessment of the underlying position.

However, such an audit, if repeated on a regular basis, might come to serve a second, as yet unthought of purpose - restoring taxpayers' trust in what the government is doing with our money. The reason there is a long-term, structural hole in the budget is that we have become increasingly unwilling to fund greater expenditure. Fiscal policy has been cynically linked to the electoral cycle, while the long-term failures of welfare spending have become all to clear. Tax cuts came to seem a political necessity, while the spending juggernaut rolled on for too long. Tax and spending have become uncoupled.

One way of looking at Gordon Brown's move, therefore, is as a necessary prelude to any future attempt to increase spending. Just as the Bank of England's independence will build credibility in monetary policy by putting it at one remove from political influence, an audit of the public finances might help restore credibility in fiscal policy.

Boeing merger is none of Europe's business

The dispute between Europe and the US over the proposed Boeing/McDonnell Douglas merger has been simmering along barely noticed since the deal was announced last December but it is coming to the boil nicely now that Karel Van Miert, the EU Commissioner for Competition, is preparing to send his statement of objections winging across the Atlantic.

What, you might wonder, has a merger between two US aircraft makers that will actually leave them with a smaller market share than Boeing had on its own 10 years ago got to do with Brussels?

The answer is that Mr Van Miert's writ runs wide. He has analysed the figures and concluded that the deal clearly falls foul of European merger regulations.

At this point it is necessary to recall a little history. The manufacture of large commercial aircraft has been a running sore between the US and Europe for as long as anyone cares to remember. Certainly, in any event, since Airbus Industrie, Europe's answer to US hegemony in this area, began to win orders in Boeing's backyard.

Now that Airbus is limbering up to become a fully commercial entity - with the result that it may start to achieve Boeing-style economies of scale and manufacturing efficiencies - Mr Van Miert smells another plot by the US to reassert global domination in the shape of the exclusive long-term supply deals Boeing is stitching up with its airline customers. The reality, however, is that the carriers Boeing has so far signed up were never big customers of Airbus anyway. Those that are - and indeed those that are not, such as British Airways - will always put healthy competition between two suppliers ahead of sweetheart deals with just one.

Mr Van Miert ignores this point. He also ignores the wider ramifications for EU-US trade as his comments become more bellicose. How can Europe lobby effectively against such pieces of international trade vandalism as the Helms-Burton Act when Mr Van Miert is playing into the hands of those US senators who spot political motivation.

The anti-trust issues raised by the Boeing-McDonnell merger, such as they are, should be left to US regulators alone. Beyond their shores the markets can be relied on to regulate Boeing's behaviour far more effectively than Mr Van Miert.

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