George Osborne’s speech to the Federation of Small Businesses tonight tries to
offer some reassurance that the coalition isn’t caving into the anti-business zeitgeist. Referring to the recent rows over executive pay, he deplores rewards for failure before saying
‘a strong, free market economy must be built on rewards for success. There are those who are trying to create an anti-business culture in Britain – and we have to stop
them.’
How reassuring business leaders will find this remains to be seen. As Robert Peston reported yesterday there’s a lot of grumbling
from them about the government’s handling of the Hester bonus and other matters. (To be fair to Osborne, he was prepared to defend the Hester bonus) But there needs to be a sense of political
realism here as well. The mistake, one made by both the government and RBS, was to imagine that RBS could be run as a commercial bank within the public sector for a prolonged period.
The key question is what will the March Budget do for enterprise in Britain? For instance, it will see the publication of HMRC’s assessment of the impact of the 50p tax rate. Will the coalition listen to that report if its shows that a lower rate would either raise more revenue or help economic growth? Equally, there’s a need to reduce the massive regulatory burden on business. Actions like these will speak far louder than words.
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