Austerity for Years: The AnswerThe current UK Coalition government still has no idea how to get growth into the economy. The Conservative solution to this type of crisis is as always, reduce jobs, reduce earnings, and increase taxation.
Their latest hair-brained scheme is to increase Business rates by 5.6% in the spring, as more and more businesses go bankrupt the coalition is of the opinion that any growth is good .Growth in bankruptcies is not good for business, for jobs or the economy.This self defeating increase in Business Rates will put more
business into receivership, more people out of work, will reduce the overall tax take, and increase the welfare bill. Good planning and fore-sight if your intention is to bring the country to it's knees, not so good for the country though. The coalition had to do a 'U Turn' this month and reverse the planned increase in fuel tax by 4p a litre. Both these tax increases would have pushed inflation back up again in the 2nd quarter, now that the VAT rise is no longer factored into the inflation equation.
business into receivership, more people out of work, will reduce the overall tax take, and increase the welfare bill. Good planning and fore-sight if your intention is to bring the country to it's knees, not so good for the country though. The coalition had to do a 'U Turn' this month and reverse the planned increase in fuel tax by 4p a litre. Both these tax increases would have pushed inflation back up again in the 2nd quarter, now that the VAT rise is no longer factored into the inflation equation.
How to Create Jobs
The first thing the coalition should do is to stop the practice of putting people out of work. IT COSTS MORE MONEY TO KEEP A PERSON OUT OF WORK, THAN IT DOES TO KEEP THEM IN WORK.The coalition have set up 'enterprise zones' to encourage companies to move into these zones and regenerate them. A tentative step in the right direction, and had they backed it with more money, it would have created jobs short term.
The 'zones ' are areas of high unemployment, and a lack of investment. Short term this is good for the 'zone' but long term does very little. The 'enterprise zone' attracts people, and companies from outside the area who are prepared to travel, or move home to work. Not all the jobs created come from the enterprise zones. After the money runs out a lot of companies will close or relocate, and the area invariable degenerates again. So apart from moving people about, the long term prospects are improved very little. For the enterprise zones to work, the investment has to be long term.There needs to be a co-ordinated policy to regenerate areas, and create meaningful employment and training. There needs to be town centre regeneration, and an
incentive for small businesses to start up, with the aid of a mentor.
The 'zones ' are areas of high unemployment, and a lack of investment. Short term this is good for the 'zone' but long term does very little. The 'enterprise zone' attracts people, and companies from outside the area who are prepared to travel, or move home to work. Not all the jobs created come from the enterprise zones. After the money runs out a lot of companies will close or relocate, and the area invariable degenerates again. So apart from moving people about, the long term prospects are improved very little. For the enterprise zones to work, the investment has to be long term.There needs to be a co-ordinated policy to regenerate areas, and create meaningful employment and training. There needs to be town centre regeneration, and an
incentive for small businesses to start up, with the aid of a mentor.
Virtually every town centre has a high proportion of empty shops and offices, which are slowly falling into dis-repair. These could be let rent free to start up businesses, and rate free for the first 2 years. This doesn't
cost anybody any money, because nobody currently or in the fore-seeable future is going to take then on. It gives new start up businesses a chance to show what they can do. In addition the government could subsidise new start ups, by giving newcompanies a grant for every person they take on who is currently unemployed.
The grant could be paid weekly and be the equivalent to what the government now pay an unemployed person. No extra cost to the government, and gains to the government would be the tax and national insurance that ex-unemployed person pays. This scheme could also be extended to the self employed one man start ups as well. So far the ideas put forward are pretty straight forward, and in the main don't actually cost the tax payer or the government anything. The scheme could also be used for industrial premises, and manufacturing busineses.
cost anybody any money, because nobody currently or in the fore-seeable future is going to take then on. It gives new start up businesses a chance to show what they can do. In addition the government could subsidise new start ups, by giving newcompanies a grant for every person they take on who is currently unemployed.
The grant could be paid weekly and be the equivalent to what the government now pay an unemployed person. No extra cost to the government, and gains to the government would be the tax and national insurance that ex-unemployed person pays. This scheme could also be extended to the self employed one man start ups as well. So far the ideas put forward are pretty straight forward, and in the main don't actually cost the tax payer or the government anything. The scheme could also be used for industrial premises, and manufacturing busineses.
Two further measures should be put in place to complete the packages. Firstly finance, the coalition
recently announced that they would guarantee business loans. This could be modified slightly to include a low rate of interest, and the banks could waive their prohibitive arrangement fees, which are added to the loan and are currently taken out after the interest has been paid, and before the capital is repaid. The coalition could take the lead in this by encouraging the banks the tax payer bailed out to take part.Secondly training should be made available, free of charge to prospective start ups, and a mentor should be on hand to advise when needed. The mentor could be supplied by the lending bank, or by the local Chamber of Commerce.
recently announced that they would guarantee business loans. This could be modified slightly to include a low rate of interest, and the banks could waive their prohibitive arrangement fees, which are added to the loan and are currently taken out after the interest has been paid, and before the capital is repaid. The coalition could take the lead in this by encouraging the banks the tax payer bailed out to take part.Secondly training should be made available, free of charge to prospective start ups, and a mentor should be on hand to advise when needed. The mentor could be supplied by the lending bank, or by the local Chamber of Commerce.
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Vic Farron RFT Express. .
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Vic Farron RFT Express. .
Follow us on Twitter ::[ over 80,000 already do] ::Be a fan on Facebook :: and Blogspot [comment on Blogspot and our Hosted Blog, and BT Tradespace, all high Google Page Ranks ] ::Bookmark this page using the ‘Share’ button
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