So we are to have a new industrial policy, this one courtesy of the coalition government and, more specifically, George Osborne and Philip Hammond, the Chancellor of the Exchequer and the Transport Secretary. Both are economically literate, professing faith in markets as allocators of resources; but they have found the lure of shaping the economy in their image irresistible.
The goals of the new industrial policy are two: to reduce the relative importance of financial services, and to disperse economic activity more widely throughout the nation. In pursuit of the first we have bank-bashing that will discourage the growth of financial institutions, limits on bonuses, an increase in the marginal tax rate to an effective 52 per cent, and acceptance of four new Europe-wide regulators just when our own regulators are least able to stave off expansionist Eurocrats.
No one can quarrel with the political wisdom of all this.
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