Monday, 8 October 2012

Osborne's Speech - no magic bullet but some new policy

Well, I've just finished watching Osborne's speech to the Tory conference and he's probably never been under as much pressure as he was before this one. 6 months of negative headlines over pasties and caravans and other such trivia have not made him popular. Some argue he's cutting too fast, the Redwood's of this world argue he's not cutting fast enough. I'm an arch pragmatist...given that unemployment is coming down steadily and the private sector job market is also growing apace I think he's judeged it about righr.

What else did he talk about? Well, he took a bazooka to Miliband's 'One Nation' tanks and got them off the Tory lawn but he didn't concentrate on making it an overtly party political attack on the labour party. Unlike his shadow chancellor he actually concentrated the bul on the economy and played on the recent press headlines that the Tories would be seeking to do things for the strivers in Britain...all good red meat for the natural supporter of the Tories and the sort of people who gave Thatcher  their vote in the 80's, which is good because they're still out there. He also nixed the disastrous idea of a wealth tax or mansion tax (and anything that blunts a Vince Cable proposal is welcome). There were two proposals which really caught my eye and I'd love to see some more detail on them.

Firstly this 'Employee Ownership' voluntary scheme. In exchange for less employment rights and regulations employees would receive shares in the company they work for. Now this scheme has a few things that make it worth exploring.

  1. It will make it far easier and less risky for an employer to hire people. If it doesn't work out then the employee can belet go.
  2. It gives the employee more incentive to make the business a success, they have a stake in the future of the company...they'll work to ensure it's future as theirs is tied in to it...meaning the company would be less likely to sack them anyway.
  3. The Treasury would put a 0% rate on any capital gains from these shares.
Personally I thinkEmployee ownership is a great thing, It's like John Lewis writ large. My uncle was one of the Miners who bought Tower Colliery in the 90's and ran it as a successful profitable coal mine for 13 years, in a far better way than the NCB ever managed. I love employee ownership so I think this could be something potentially huge for the workers of Britain,

The second item that caught my eye was the tax relief for Shale Gas. It could be as important to us now as North Sea Oil was to the 80's recovery. And it would also reduce our reliance on overseas oil as well as acting as a stabiliser from increased energy prices. And it indicates that Ed Davey will not be permitted to torpedo it.

He got the tone of the speech right, he's not going to be easing up on the cuts (this is a good thing, the markets will have appreciated that speech and will instead harass the French), he didn't make it a gag a minute but the few jokes he made were well-timed and Mandelsonian (And that is a compliment) in their barbed nature. All in all, while the speech didn't blow the roof off it was a solid outing with a few moments which may prove significant for the future.

This follows on from Solid Speeches by Shapps, Hague and Hammond yesterday. It looks like the Tories have had enough of rope-a-dope and are up for the fight....about bloody time!

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