All the Chancellor’s instincts will be pushing him in the other direction as will Labour’s policy agenda in other

All the Chancellor’s instincts will be pushing him in the other direction, as will Labour’s policy agenda in other areas. So enamoured does the Chancellor seem with everything about America’s amazing free market economy that it’s a wonder he still bothers to worry about the euro; why don’t we just join the US instead? Therein lies the rub, for it is not clear that the Chancellor in the end has the stomach for the creation of a genuine entrepreneurial economy. We’ll have to await what Mr Brown has to say, of course, but the two foundation pillars of a dynamic free market economy are low taxation and minimum regulation. They look at America and ask: “Why can’t we be like that?”Confused? You may well be after the “strategy for enterprise” due to be unveiled in Gordon Brown’s pre-Budget statement today. At the same time, the Government’s vocabulary is chock a block with “enterprise” rhetoric and there is a sincerely held belief among ministers, sometimes to the point of naivity, in the power of entrepreneurs to create jobs and wealth.

The idea of “partnership” between business and government has strong “corporatist” under currents, and the Government appears more than willing to favour particular commercial interests over others for support in its social and educational aims.
On the other hand, the “rip-off” Britain campaign is plainly anti-corporatist in its objectives, as was the abolition of the tax credit on dividends, while quite a bit of Labour social policy is opposed by business large and small. Would it be corporatist in nature, with lots of supposed backing for wants of big business? Or would it be against the established bastions of industrial and commercial power, and through a vigorous competition policy and a pro-enterprise agenda promote the interests of the small businessman and the entrepreneur? Or might it even turn out to be anti business altogether?

In practice it has been a bit of all three. On current year profit forecasts of pounds 385m, the shares trade on a forward multiple of 11. That may seem cheap, but the rating reflects the challenges of ABF’s main markets and there seems little reason to buy the shares just now.. NOBODY WAS too sure how the new Labour government would treat business when it was elected. The 100-store chain saw profits rise by 87 per cent to pounds 43m and like-for-like sales grow by 20 per cent, around the best in the sector.

ABF has some stellar names such as Twinings tea and Silver Spoon sugar, but it also has a chunk of own-label business with the supermarkets, supplying products such as ice cream and biscuits. If these cannot be knocked into shape they will be sold.Some gems remain. The low-price format of the Penneys/Primark high street retail division is thriving in the present value-conscious climate. He is not expected to return to the business for several months, and the new chief executive, Peter Jackson, is running the show.Mr Jackson’s plan is to use the pounds 870m cash pile for more acquisitions after the pounds 450m special dividend this year. His targets are in the food ingredients sector, following the American Spi Holdings polyoils deal and the recent Rohn Enzymes acquisition. These businesses are in “added value” sectors where margins are less exposed to competitive pressures.Elsewhere, costs will be attacked, particularly in the underperforming parts of its grocery division. ABF’s share price has slumped from 638p to just 370p, a fall which has prompted the controlling Weston family to increase its holding from 61 to 63 per cent with the aim of increasing it further to 66 per cent.With the clouds gathering it was fortunate that Garry Weston had shaken up the board prior to his stroke in September.