So, what did we all make of that nice Mr. Darling’s speech yesterday? Odd not to see Gordon Brown telling us all what we won’t be able to afford for once, seems he’s found someone with even less presence to deliver the thing. Not that this should matter; a number of commentators have barracked Brown for not having much of a personality and twitching a little when he speaks; personally I’m delighted to have someone at the top who’s less concerned with their appearance than with what they actually have to say.

The problem is that for the business community not all of what they had to say was particularly helpful. The BBC has a point by point summary here, and two points apply in depth to entrepreneurs. The first is a unified rate of corporation tax. Believe it or not I’m quite fond of this one. It’s easier to keep track of where you stand and for once involves less red tape.

The other measure is a good idea on the face of it - increasing capital gains tax. The idea is to prevent wealthy people becoming even wealthier at the expense of everyone else by hammering them for tax when they sell a company. So buying a company for a song, cutting out some of the deadwood and flogging it on ceases to be the moneyspinner it was - if you want to buy a business you might as well do it for the long term.

Which is fine and an excellent thing. Only…there’s no real incentive to keep running it, either. There’s no tax break for longer-term business owners. My concern is that instead of simply discouraging the chancers, the private equity community and the asset strippers (I have reservations about condemning the private equity people out of hand but that’s for another time) it will discourage the genuine entrepreneur - the person who wants to set up a business, run it for half a decade then sell it to get their house in the country and let someone else take over. These people exist and are very good at starting companies - and we do need those ’starter’ people as well as the longer-term managers.

So, my view is that it’s not a bad start but if that second measure could be tweaked by the time it comes into an actual budget so that it looks like more of a precision instrument than a blunderbuss, that would be a good thing.

(And yes, I know what people are really watching is whether this not-quite-a-budget can restore Brown’s credibility after the not-quite-an-election debacle last week, but this isn’t the place to discuss that. Also, I’ll bet people will be interested in the financials for longer than they’ll care about Gordy’s career prospects…)

budget | capital gains tax | corporation tax | pre-budget | tax