Brown, China and CGT
I wonder whether Gordon Brown filled his time usefully as he sat delayed on a Heathrow runway for nearly an hour yesterday. Given his intended destination, he may have immersed himself in all matters China-related - though Will Hutton’s sceptical view of the sustainability of the country’s economic miracle, The Writing on the Wall: China and the West in the 21st Century probably wasn’t top of the pile. An early proof of the soon-to-be-published Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade, by ex-Economist editor Bill Emmott, might have been more the order of the day.
Or perhaps he chatted to his fellow passenger Richard Branson about how shrewd self-promotion (never the prime minister’s strongpoint, to be somewhat understated about it) can make a reputation. (UPDATE: it sounds like Northern Rock cropped up too)
That said, his time might have been better spent with three other passengers - Deloitte chief executive John Connolly, Ernst & Young chairman Mark Otty and KPMG senior partner John Griffith-Jones. (PwC’s Kieran Poynter was invited, I gather, but had to decline due to a prior commitment).
As my colleague Gavin Hinks has written this morning, it’s unusual for accountants to be invited to fly the corporate flag on an overseas prime ministerial visit. I hope they use it wisely.
While their priority (and Brown’s for that matter) will be to extend their already highly successful operations throughout China, I hope all parties found some time to discuss domestic matters.
Hopefully they touched on tax – not least the harm uncertainty over capital gains tax reform risks doing to British business.
It would have been a missed opportunity if reform of HMRC didn’t crop up.
And if the fragility of the global and domestic economies was not discussed at some length there would have been little point boarding the plane.
PURPOSE OF THE BEIJING VISIT......
Jan. 18 (Bloomberg) -- U.K. Prime Minister Gordon Brown offered London as an overseas base for China Investment Corp., the nation's $200 billion sovereign wealth fund, aiming to encourage the world's fastest-growing major economy to invest in Britain.
China's economy overtook the U.K. in 2005, and trade between the nations may grow 50 percent to $60 billion by 2010, according to a goal set today by Brown and Chinese Premier Wen Jiabao. CIC, set up last year to seek better returns on China's foreign- exchange reserves, plans to invest as much as $70 billion overseas.
Virgin Group Ltd. founder Richard Branson, currently seeking financing for his offer to buy Northern Rock Plc, traveled with Brown. Branson said he's confident his bid will succeed, adding he doesn't plan to talk with Chinese officials about the matter.
``I'm confident that the Bank of England can put a proposition together that can save Northern Rock,'' Branson said yesterday on board his flight to Beijing. ``We are the only serious contenders.''
Brown has repeatedly said he is keeping all options open to recover more than 25 billion pounds ($49 billion) in government loans supporting Northern Rock, including nationalizing the bank. The government would consider allowing a bid for the bank financed by a sovereign wealth fund, Michael Ellam, a spokesman for the prime minister, said on Jan. 10.
Posted by Simon Cheung | January 23, 2008 10:23 AM
OK, I was being slightly flippant. Of course there were important matters of international (reciprocal) trade to discuss. I merely meant to suggest that here was a comparatively rare opportunity for the profession to bend the prime minister's ear and that it shouldn't be wasted. Who knows, within days a partial CGT concession was announced so perhaps it worked.
Posted by Damian Wild | January 25, 2008 9:23 AM