Osborne speech

Osborne speech; You might think that the middle of a recession is not the time to be investing in the businesses and entrepreneurs of the future, but you couldn't be more wrong. It's actually exactly the right time.Half of the top 50 US companies in the Fortune 500 were incorporated during a recession, including seven out of the top ten. Even in this savage downturn, new markets and business opportunities are emerging all the time, and if we don't seize them someone else will. It is start-ups and new technology, not bail outs, that will drive our recoveryGovernment could play an important role, either through co-investment along the lines of the Prudential's new UK Companies Financing Fund, or a new Industrial and Commercial Finance Corporation - which became today's 3i.Unfortunately Labour moved in the opposite direction in the last Budget, increasing the tax levied on venture capital investments at the very beginning of the recession. But it is not just new start ups that need our help.Our corporate sector's excessive dependence on debt is deep rooted in the structure of our economy. In particular, economists have long pointed out that our corporate tax system favours debt financing over equity. Interest costs are fully deductible with very limited restrictions, while the returns on equity receive little or no tax relief. Gordon Brown's decision in 1997 to abolish the dividend tax credit for pension funds made an existing imbalance worse. The result is that the UK is widely regarded as having the most generous tax treatment of debt interest of any major economy. That's economically inefficient at the best of times, but it makes even less sense now that we understand more about the dangers of excessive leverage. There are several ways that we could begin to undo this imbalance by reducing the costs of equity financing relative to debt.I have long argued that there is a powerful case for looking at stamp duty on shares, which raises the costs...