Business gets its chance as the State is set to shrink
May 1st 2010 After lots of hand-wringing over a hung parliament, it turns out not to have been so bad after all. It seems political parties can be quite adept at talking to each other, reaching an agreement and - get this - putting their differences aside for the good of the country.
I don’t share the pessimism of many about the new coalition. There are pitfalls ahead, but with both parties entwined so completely within the framework of Government, neither can afford to torpedo the arrangement without risking political suicide. Combine this with their comfortable majority in parliament and the administration should be fairly robust.
Indeed a Tory spending cuts agenda tempered somewhat by the Liberal Democrats may turn out to be the most palatable blend of medicine for the British public.
However, not everyone is so convinced by the coalition and the role of the Liberal Democrats, for one example see Geoff Dossetter’s stinging (and very funny) critique on page 36.
I don’t think the left of the Liberal Democrat party, with its radical environmental agenda, will get much of a look-in. Aside from holding back the worst of Tory excesses, I think the Liberals will be happy to be along for the ride.
Both parties have been starved of power for a long time, but while the Tories will look at their electoral success as the restoration of their birthright, for the Liberals this is an almost unprecedented opportunity. With the emergency budget due on June 22 we’ll soon see the ‘damage’ as far as the transport sector is concerned. New Transport Secretary Philip Hammond should not face any surprises, after all, as Shadow Chief Secretary to the Treasury for the last few years, he will have been among the architects of the upcoming programme of cuts.
Hammond has made some early noises about ending Labour’s ‘war on the motorist’ but it remains to be seen if this will translate into a cut on fuel duty. It looks very unlikely that any major investment in transport infrastructure will be unveiled any time soon, so perhaps the best the industry can hope for is a little tax relief.
Looking more broadly at the economic picture, the honeymoon period for the new administration could see an upswing in business prospects but after that it is less certain.
The key to success will be the new administration’s pro-business stance. The private sector must flourish to compensate for the fallback on the public sector of the economy. There will be much less Government investment, Government will procure more sparingly, and public sector jobs will go, which will have a knock-on effect on consumer spending.With less red tape to contend with and a lower tax bill (compared to under Labour), the private sector now has the chance to step up to the mark by generating growth or at least preventing the UK from sliding back into recession.
On page 8 you can read comment from independent analysts Oxford Economics, who were commissioned by BITA, as they lay out various scenarios for the UK economy in the years to come.
Simon Duddy, Editor More articles from Handling & Storage Solutions: | 
