The Economist December 1st 2007 - Online Public Access Catalog

decade ago, especially with that friend of the rich, Tony Blair, out of the picture. Third, there is a growingsense of outrage at the vast sums the government has spent on the public sector to less than optimaleffect, while the wealth-creating side of the economy has been weighed down with regulations and tax.Take the high-handed decision announced in October to raise capital-gains taxes to a flat 18% from aneffective 10% on most business assets. Aimed at capturing some of the gains made by partners inprivate-equity firms, it is widely seen as an attack on small business. “The damage is in the signal itsends, which is that this is an economy that doesn't value entrepreneurs,” says Arnaud de Meyer of theJudge Business School at Cambridge University.Taxing small businesspeople, who are mainly steadfast Tories, is unlikely to cost Mr Brown many votes.But John Curtice of Strathclyde University reckons public confidence in Labour as the party most trusted torun the economy, already declining, is likely to ebb faster as businesspeople air their doubts. A recentPopulus poll shows the Tories well ahead on this point. Although business has no vote, in forfeiting itssupport, Mr Brown may well be scuppering his chances of re-election.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.