Even the densest politicians are forced to acknowledge that
successful businesses are essential to get the world out of recession: there is
no other potential source of the sort of economic growth that is required.
Or at least they acknowledge this obvious truth when talking
to business audiences. It does not remain in their amoeba-like brains long
enough to influence their policy decisions.
This blog tries hard not to be political, but we cannot
ignore the fact that the current economic crisis is being prolonged and
aggravated by the stupidity of politicians who seem incapable of learning from
their past mistakes.
The Budget announced today by the Chancellor of the
Exchequer – the minister of finance – of the United Kingdom seems designed
deliberately to discourage the sort of enterprise and business growth that is
necessary to cure the recession.
It does nothing to decrease the difficulty of doing business
and it penalises those who overcome those difficulties.
The so-called “help for business” is a list of tiny,
tokenistic “schemes” of the type that have long been discredited. The amounts
of money being made available are miniscule compared with the burden being
placed on business by the government, and the way it is being spent means it is
likely to be wasted on the sort of uneconomic businesses that really ought to
go under rather than invested in those with real potential for future growth.
This is the same strategy that proved disastrous for Britain
in the 1970s.
Needless to say, there was nothing in the Budget to ease the
regulatory burden on business or to encourage the banks to deal equitably with
their business clients.
What was in the Budget was a counter-productive increase in
higher rate tax, which both reduces the rewards of business success – and
therefore discourages entrepreneurs from taking risks – and reduces the pool of
money for serious investment in business, as opposed to government posturing.
What the British economy, along with many of its
counterparts, so desperately needs are measures to reduce the fixed cost
burdens on business. These range from taxes imposed before any business is done
(such as business rates and payroll taxes) to the costs of administering
Even the short-sighted, narrow-minded, self-styled
“intellectuals” of the political and media Establishment must see that this is
folly – but will any of them say so, or, do we remain a lone voice of reason?