In Britain, the neoliberal policies have been used strongly during the time when the Conservatives are in charge of the government. Thus, from when they took power between 1975 and 1997, their policies became dominant. The government asserted less state interventions in economic market and supported the model of free market. The growth of private industries and less welfare spending in locally which are key features of the Neoliberal economy became apparent.
There are various markets in different economic systems and governments. The choice depends on the government concerned. Many economies in the world though have embraced the free enterprise economy. This is considered the best model given the considerable returns from the system. Free enterprise economy is an economic system based on private ownership of the means of production. The government’s participation or regulation is restricted although it is involved at some stage. This article rewriting service of discusses the role of the British government’s involvement in the economy, built environment and the society.
Economy
Reducing taxation is one of the Conservative’s economic strategies. In the Enterprise Zones, the government reduces local taxation to encourage the development of business in derelict areas. The Conservatives support the corporate financing, Enterprise Agencies and voluntary sectors which do not need to be funded from the state, and give them tax concession to ensure the maximum economic return on government spending. The decentralized local economic policies do not intend to decentralize power but weaken the local authorities, because central government has maintained a strong control on these agencies.
Another key involvement of the government in the operations of the market includes the determination of disputes through established agencies. Institutions that settle disputes complement the market (Jaffer & Thompson 1986). Where there are disagreements in the market, the judicial systems are always ready to step in and sole them. This delivers justice to those who may be wronged by other participants. The government cannot be eliminated from this important role. It is through this, that the rights to individuals, such as the right to property are safeguarded. This enhances justice and reward for hard work to prevail.
Several factors, some positive, and others negative played an important role in forcing the United Kingdom to refocus on the conduct of business in the financial services sector. The prevalence of a number of scandals that hit the United Kingdom in the periods 1970's and 1980's were central in the need to re-adjust the regulatory mechanism. Most notably, the misconduct in handling personal endowments and pension schemes in addition to mismanagement of capital investments were critical in the process of reforming the financial services sector.
The scandals prompted the government to take action regarding the capital markets. More specifically, in 1980, the government assigned the Wilson Committee the task of reviewing the sector. The Committee failed to uncover the duties the government sought prompting further action. Subsequently, the government gave the investigative responsibility to Professor Gower to establish appropriate legislative measures to guide activities in the financial services sector. Towards pursuing the objective, Gower was mandated to review three main aspects. The first aspect entailed examining the then existing level of statutory investor protection. Secondly, Gower was to focus on the control of investment and management advice. The other issue was based on establishing relevant progress relating to the European Economic Commission, EEC.
Regulation under the Financial Services Act of the United Kingdom placed demands on segmentation in product markets that such products be defined and structured to last longer periods. Under the provisions, membership of industry players was restricted, as were the engagement activities. In addition to the control by the official legal instruments, the Bank of England played regulatory roles to clearing banks. In the same line of reflection, the Registrar of Friendly Societies exercised the same level of control over building societies in the UK.
Built environment
The government’s strategy of reducing public expenditure led to the achievement of the planned reduction in house expenditure (Vinen 2009). There was a sharp decline in council house building programmes. The majority of local authorities by 1983-4 did not receive Exchequer subsidy from the central government (Jaffer & Thompson 1986). The shortage of council house with the excess of inflation had an apparent rise in housing rent above the level of affordability for many low-income or unemployed people. In the period of 1980 to 1990, the housing construction, housing repair and maintenance that originally carried out by local authority building department had shared by private agencies. There were less democratically accountable for built environment but more built environment was pandered to market criteria.
Based on the above establishment, housing emerges as an expensive aspect in Britain. Thus the government has a role to play in order to ensure affordability of housing units by the common citizenry. It is also notable that construction of houses requires certain standards that must be met. Although it is the primary responsibility of the government to set the regulations, it has a monitoring role that it should discharge. Hence, the government plays a critical role in ensuring that building standards are observed.
Society
Governments are elected to protect the society from unscrupulous activities. As such, governments are seen as mitigating risks that are associated with operating a free enterprise economy. In Britain the government has played the role ably. This is based on the notion that financial institutions face such risks as equity investment risks, rate of return risk credit risks, liquidity risks, operational risks, and market risks. Since the element of risk has a direct bearing on the business gains, mitigating the risks involved is invaluable. Towards reducing the risk chances, the government institutions have developed risk management processes to control risk emergence. The various financial institutions develop the mechanisms individually. The individual mechanisms are supplemented by organisational measures such as those developed by different sectoral institutions. The institutions from the different sectors closely monitor the activities of the financial institutions and ensure that they are in line with the set rules and regulations.
It should be observed that aspects that border on regulation are also reflective of efforts to mitigate any losses that societies face. Regulation helps in separating related aspects where one such aspect entails giving advice regarding the use of the other. For instance, before the Big Bang, Stock Exchange deregulation played an important role in the separation of the functions of market-making and stock broking. In the same line of reflection, the FSA introduced a requirement that public sellers of investment products should opt for either independent or tied status. When a client opts to use tied agents, the presumption is that the seller holds a direct concern in the outcome of the engagement. Contrary to this, when a client takes the option of using an independent intermediary, the expectation is that the latter gives the most appropriate advice.
The establishment of regulatory platforms further help in removing barriers that hinder mobility of assets among markets. The benefits are due both to the regulated firms, the regulator and society as a whole. When handling a set of firms that exhibit similar characteristics, the regulator has a simpler task in comparison to a case of dissimilar organisations. Industry players also benefit from such regulation as entry is regulated based on the various requirements that regulators demand. Overall the society benefits from reduced risk.