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Tuesday, November 29, 2005 

Brown throws operating and financial review out the window - CBI cheers.

Oh yes, just wait for Gordon Brown, then we'll get 'real Labour':

Gordon Brown's efforts to mend the Labour government's relationship with big business backfired spectacularly yesterday when the centrepiece of his proposals to cut red tape ran into a chorus of criticism from an unlikely alliance of business leaders, City investors, trade unions and green activists.

Addressing yesterday's meeting of business leaders at the annual CBI conference, the chancellor pledged to strike out plans to implement the so-called operating and financial review (OFR) - a requirement on stock market-listed companies to provide much more information to the public about the impact of their businesses on the environment and society at large.

The OFR was intended to provide a written account of how a company was being run - including corporate governance, social values and ethical policies - to complement the financial numbers contained in the annual report.

The decision to scrap the OFR had been held up as a demonstration of Labour's determination to tackle the regulatory burden facing British business and was clearly intended to sooth increasingly strained relations between the government and the corporate sector.

Instead, organisations as diverse as the Association of British Insurers, which represents big City shareholders, the Institute of Directors, the TUC, and Friends of the Earth reacted with fury, accusing the government of abandoning a central and widely supported plank of corporate reform.

While the CBI itself welcomed the move as a clear sign of the government's understanding of the burdens facing British businesses as they struggle to implement a range of European-inspired legislation, other business lobbies condemned it.

The IoD said it demonstrated "a cavalier and ill-thought-through approach to regulation and its impact".

The Association of British Insurers, whose members control shares worth around a quarter of the stock market, saw the U-turn as "peculiar" given that the government had been trying to promote shareholder activism and the notion of stakeholders.

Brendan Barber, the TUC general secretary, said: "This early Christmas present for the CBI leaves the government's approach to corporate governance looking confused at best."

In other words, Brown has given a blank cheque to some of the most corrupt and environmental damaging companies to continue to cover up the true impact and scale of their business. It's also a typical piece of smacking the unions while licking the boots of the CBI, who increasingly seem to be making their reactionary voice heard in the mainstream. It was they who campaigned with the Tories against the minimum wage, claiming it would cost thousands of jobs. It didn't and it has helped lift a considerable number out of poverty. They have also been vocal about the recent 'gas' problems - the price has been steadily rising - blaming the government even though the power industry was privatised by the Tories and Labour has very little control over it. Still, it's always easier to blame the government than face up to your own problems.

The tabloids, Telegraph and Times along with the CBI permanently decry EU regulations: while if they complained about farming regulations they'd have a point, they have no case on business regulations. The EU has contributed to increasing worker safety and commanding respect for the environment which was never there before. The CBI and their friends wish to see this reversed in order to maximise profits and cut jobs - at the same time as they demand that the government improves education as too many leave without vital life skills. They want to have their cake and eat it.

As the Guardian leader notes, Brown's speeches have been pro-market for a very long time. His speech to the CBI delighted them as they realised that he was one of them and not one of the firebrand mob. It's been no secret for a while though; while paying lip-service to social justice and reducing poverty, Brown idolises the American free-trade pro-market model. It's also Brown who is refusing to deal with the EU over the budget rebate; while Blair is prepared to exchange it for a drop in agricultural subsidies, Brown is unlikely even to accept that. For those of us hoping that Brown is going to around the Labour party, this is a wake-up call. If we are to reclaim the party or at least influence it, we need to speak up now. Otherwise Britain faces being dragged further from the EU and even more towards America - Gordon Brown as prime minister or not.

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