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Page last updated at 09:40 GMT, Tuesday, 20 March 2012

Should government intervene in business?

The Budget will be announced tomorrow but the credit-easing scheme has already been announced which is a small taxpayer subsidy to small business lending.

This indicates that Chancellor George Osborne is not ideologically opposed to intervening in the business of business.

But should he be doing more or less of that kind of thing to get growth accelerating?

Will Straw, associate director for strategic development at the think tank Institute for Public Policy Research, said that credit easing does not address problems in the economy at the moment.

He maintained that the problem is not business investment but domestic consumption and "we need to get people back into work and put money back in people's pocket."

Dr Madsen Pirie, president of the Adam Smith Institute, said that government should not interfere and that "we should make it favourable for entrepreneurs to get going they can create the growth we need".

But Will Straw said that according to the OECD, there is very little correlation between the level of labour market regulation and unemployment levels.

But he said one scheme that may work is a pay roll tax which US president has done.

But Dr Pirie disagreed and said "we want to encourage investment not consumption".

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