Outlook: Pre-Budget guff

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The Independent Online
NOBODY WAS too sure how the new Labour government would treat business when it was elected. Would it be corporatist in nature, with lots of supposed backing for wants of big business? Or would it be against the established bastions of industrial and commercial power, and through a vigorous competition policy and a pro-enterprise agenda promote the interests of the small businessman and the entrepreneur? Or might it even turn out to be anti business altogether?

In practice it has been a bit of all three. The idea of "partnership" between business and government has strong "corporatist" under currents, and the Government appears more than willing to favour particular commercial interests over others for support in its social and educational aims.

On the other hand, the "rip-off" Britain campaign is plainly anti-corporatist in its objectives, as was the abolition of the tax credit on dividends, while quite a bit of Labour social policy is opposed by business large and small. At the same time, the Government's vocabulary is chock a block with "enterprise" rhetoric and there is a sincerely held belief among ministers, sometimes to the point of naivity, in the power of entrepreneurs to create jobs and wealth. They look at America and ask: "Why can't we be like that?"

Confused? You may well be after the "strategy for enterprise" due to be unveiled in Gordon Brown's pre-Budget statement today. So enamoured does the Chancellor seem with everything about America's amazing free market economy that it's a wonder he still bothers to worry about the euro; why don't we just join the US instead? Therein lies the rub, for it is not clear that the Chancellor in the end has the stomach for the creation of a genuine entrepreneurial economy. We'll have to await what Mr Brown has to say, of course, but the two foundation pillars of a dynamic free market economy are low taxation and minimum regulation. All the Chancellor's instincts will be pushing him in the other direction, as will Labour's policy agenda in other areas. Labour has so far been relatively successful in establishing the macro-economic stability business needs to succeed, but it is not clear the Government can or ought to be doing much else. Perhaps the best business can ever hope for from Government is that it simply stays out of the way. Not much chance of that with this lot.

In helping to bring about an entrepreneurial, modern economy, the Government should start with itself. What is the point of meaningless targets like the Government's farcical commitment to making Britain the e-commerce centre of the world by 2002 when its own departments are still living in the technological dark ages. If the Government were, say, to commit to making all government activity paperless within five years, that would be real progress, as well as a convincing boost to entrepreneurial Britain. But don't hold your breath.