Shape of things to come from Walworth Road

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The Independent Online
Interest rates and spending plans

The inflation target will not be precise until it is clearer what inflation rate Labour would inherit.

Monthly monetary meetings between the Governor and Chancellor will be retained, with minutes published later. Interest rate decisions will be announced immediately after the meeting. Schedule of meetings will be published in advance.

A new Monetary Policy Committee of the Bank of England will advise the Chancellor, and will be accountable to Parliament.

The Bank's Inflation Report will be subject to scrutiny by an independent panel of experts. Labour might consider making the Bank of England independent.

Policy on European Monetary Union has not so far been spelt out. Mr Brown says Labour supports progress to EMU as long as there is real economic convergence in Europe.

Government borrowing will not exceed public sector investment. Public debt will be stabilised at a prudent level - likely to be the 60 per cent of GDP limit set by the Maastricht Treaty.

Jobs

Mr Brown favours in-work benefits like Family Credit to top up income levels for the working poor and a minimum wage in some form. The Shadow Chancellor and the trade unions have agreed to differ on the level. A commission to set the rate will be established when Labour is in government.

Back-to-work benefits such as a subsidy for firms taking on the long- term unemployed are likely, public finances permitting.

Labour is committed to ending Britain's opt-out from the EU Social Chapter.

Mr Brown plans affordable child-care schemes to help low-income mothers return to work.

Industry

The policy document will abandon the commitment to a specialist bank for lending to small business. It will instead propose forming a national network of business development agencies by streamlining existing services such as Business Links.

Business agencies may underwrite venture capital equity invested in small firms, and will help export promotion, encourage use of technology and put together tailor-made financial packages for small business in co-operation with banks and venture capitalists.

Competition

Labour would:

r Merge the Office of Fair Trading and the Monopolies and Mergers Commission into a single Competition and Consumer Standards Office;

r Adopt a European approach in which the law prohibits monopoly practices, so the new body will be able to impose immediate fines and bans;

r Shift the burden of proof in merger inquiries to a presumption that they are undesirable unless arguments can be made clearly in favour;

r Enable ministers to keep a final decision on important issues such as restructuring monopolistic industries.

Utility regulation

Labour measures would be:

r A windfall tax on past excess profits to remain an option but re-nationalisation ruled out.

r A wide-ranging review of utility regulation and clearer and more objective rules.

r Automatic rebates and price cuts for consumers when profits rise above a pre-agreed "normal" level, sharing the "dividend" with shareholders.

r Political decisions such as social levies and cross subsidisation will be taken away from the regulators. They will be required to consult widely and publish and justify their views.

r An appeals mechanism.

r Wider decision-making responsibility for the regulator, perhaps through a non-executive regulatory board.

r Widening of the duties of regulators to include employees.

Corporate governance

r More openness and transparency with greater disclosure in annual reports.

r Pension funds to justify the way they vote and set out aims and policy objectives in a code of conduct.

r Funds to be encouraged to take a longer term view of the companies in which they hold shares and participate more actively by voting at AGMs.

Proposals have been sent to the Greenbury Committee on executive pay backing extensive reform, but there is no detail in the policy document.

City regulation

r Endorsement of wider share ownership and competition in financial services.

r No British Securities and Exchange Commission but an end to self-regulation of financial services.

r The Securities and Investments Board to be responsible for direct regulation of financial services, but there will continue to be practitioners on the board alongside representatives of the public interest.

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