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Robert Peston Logo


Big business and Treasury capture government

Tue, 27 Mar 2012 08:27:56 GMT

It looks to me like the triumph of big business - or rather the triumph of the Treasury's view of what big businesses need and want.

This would be true of today's announcement to streamline and simplify the planning system, and to introduce a presumption in favour of supposedly sustainable development into planning decisions.

It would be true of putting Royal Mail on a path to privatisation with the postal service's decision to take advantage of new freedoms to significantly increase the price of stamps.

It was true of the recent announcement that long leases over roads will be sold to the private sector, to bring private capital into road development.

It is true of the government's awakening to the potentially seriously negative impact on inward investment of constrained runway capacity in the south east.

And of course it is trebly true of the cut in the top rate of income tax, the accelerated reductions in corporation tax and the reform of taxation for multinationals based here (the controlled foreign company rules).

Now many of these policies have been desired by the official Treasury for years: they were developed under the last Labour government as required to improve the competitiveness of the British economy but are only now being implemented by this coalition.

Some of the measures, such as on corporation tax, can be identified with the personal preferences of George Osborne, but most pre-date him.

So, to use the jargon of the City, there has been a reverse takeover of the government by the gents (yes they are mostly of that gender) of the Treasury, the officials not the elected politicians.

Healthy? You tell me.

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