The first priority of government should be job creation
It seems that the economic priority of the government is to do anything but create more jobs. The Brown government poured most of its recession spending into bailing out banks that then did not help businesses, so not helping create jobs. Cameron’s priority is cutting the deficit, so creating more unemployment. Yet much of the deficit is created by extra welfare costs and less tax revenues due to having people out of work. Tackle unemployment and you tackle some of the other big problems.
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It decreases unemployment and therefore welfare costs
It is a simple fact that if the Government put an emphasis on job creation, if they stimulated the market in order for the private sector to create jobs, then they would decrease their expenditure on Job Seekers Allowance. Given that there are 2.51 million people claiming job seekers allowance which averages at £50 a week, this equates to an annual bill of £6,526,000,000. [[http://www.parliament.uk/briefingpapers/commons/lib/research/rp2010/RP10-034.pdf ]] If the Government were to spend just a small proportion of this to create jobs for 510,000 people they would save themselves £25,500,000 for the year. This saving is a lot more than if the Government continues to merely cut benefits altogether.
It increases public income via income tax.
Not only as stated above would the Government save on their expenditure on Job Seekers Allowance, they would also gain more revenue as more people earn a taxable income. This is the dual effect of encouraging employment in the private sector. A little injection cold increase the rewards twicefold.
A little financial injection will go a long way
By injecting money into the private job sector the Government will create jobs. When jobs are increased, these people will have more money. When these people have more money they will spend more money. Upon spending more money, these people will increase demand. As demand increases, supply will also have to increase. As supply increases, more people will need to be employed. This is the cycle of growth for the economical world and the Government need to catalyse this chain reaction with a little financial injection into the private sector.
It's up to the private sector to provide jobs
We've seen what happens when the government tries to provide jobs in the public sector, it leads to beauracracy and inefficiency. Likewise, initiatives designed to subsidise business' job creation mean that the ordinary supply and demand effect that guides the market to the most inefficient point becomes broken and drives wages up artificially. This makes labour more expensive when companies really do need it.
What this debate is asking is not for the Government to provide jobs within the public sector, but to stimulate jobs in the private sector. This can easily be done by encouraging the banks giving business loans, giving foreign investors a reason to settle their business in Britain, ensuring that there is enough injection of capital into the retail sector to ensure that they keep their jobs open. It is these measures that we are debating for here.
What do you think?