Outlook: Cool Britannia gives way to Crony Britannia

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The Independent Online
TONY BLAIR seems to have a particular liking for corporate deal making, doesn't he? Whether it was Mr Blair who got on the blower to Romano Prodi, or as Downing Street would have us believe, the other way round, Mr Blair certainly seems to have put in some kind of a plea for his friend and supporter, Rupert Murdoch, who at the time was trying to buy Silvio Berlusconi's Italian TV networks. Well, he's only human, isn't he? So much more exciting, this power broking, than attending to Prime Minister's questions, persuading the poor to go back to work, or deciding our position on the single currency.

But lest it be thought Mr Blair is displaying undue favouritism to Mr Murdoch, actually he may not be. His liking for corporate deal making is not tycoon specific. He seems to like all tycoons. If it's big business which runs the world these days, not governments, Mr Blair is determined to have his say. He also, by all accounts, encouraged Sir Richard Sykes to seek a merger with SmithKline Beecham after Jan Leschly announced an alternative tie up with American Home Products. Then there was his famous agreement with BT ahead of the election, under which BT was to wire up schools to the superhighway in return for early release from the ban on running broadcast TV over the telephone network.

Mr Blair talks constantly about the need for "partnership" between government and business and he's put prominent industrialists in charge of a number of key government reviews. Why, he's even appointed one of them - Lord Simon - a government minister. There may not be anything wrong as such with all this, but Mr Blair should not be surprised if it lays him open to charges of cronyism.

The function of government is to set a broad framework of public policy for all business to operate in on equal terms, not to favour one sectional commercial interest over others. For governments or prime ministers to cosy up to particular businessmen in the hope they might support their political or economic aims is wrong per se, as well as being potentially corrupt.

Let's be charitable about this and put Mr Blair's love of the boardroom down more to naivity and inexperience than anything more sinister. Even so, the fondness he displays for the aims and ambitions of big business is worryingly wrong headed. Mr Blair would probably deny he has bought the national champion arguments so much beloved of our consolidating captains of industry, but he certainly displays all the characteristic body language.

In today's global market place, the national champion case is a beguiling and seductive one. No doubt about that. Even this column has on occasions been persuaded of its merits. But in truth there's no correlation between size and efficiency in business, or between size and innovation. Rather the reverse. Our best hope of national prosperity lies not in a small number of giant national champions, not in hegemony, but in variety, in a vibrant free enterprise economy vigorously defended through public policy against monopolistic abuse and commercial favouritism. Nobody is suggesting that what we are seeing in New Labour is the sort of fully fledged crony capitalism that came to epitomise the now discredited economies of the Far East, but there are enough warning signs here to be cause for genuine concern.

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