Let us build our way to prosperity
In my opinion like most other members of my party the government needs to cut the deficit and national debt, however the job will be easier if the cuts are made when the economy is growing and more people are in work particularly welfare cuts. A credible financial plan needs to be drawn up so as the economy grows and more people get into work the government can shrink expenditure, so we can show bond market we are still doing something about are deficit and we can still pay our debts but we are also growing the economy so this is easier to do. This will make Britain’s books look healthier but also mean next time a recession hits we are financially healthy enough the combat it with stimulus packages to blunt the recession and get the economy going again.
The main thrust of the plan is two parts government investment, one part private investment and one part tax relief. The first part of the government investment is the building of council houses which Labour have talked about and which the Conservatives will likely implement closer to election time. Building council houses it a good idea because it is a classic case of spending money to save money and it also shows a commitment the Compassionate Conservatism which Cameron originally preached as it will help house the poorest while cutting the housing benefit bill. The saving the government would make by transferring people claiming housing benefit in private accommodation into the local authority owned council houses would be £206 per household per month on average. Currently 2,586,115 social houses are provided by the private sector so it would be a large saving to the government.
The second part of government investment would come from the proposed government investment bank designed to help fund small businesses. I am not sure of the details of the proposed bank so I may say something’s it already intends to do. It should be decentralized to local councils, giving each one a pot of money to invest in new businesses to get them off the ground but as well as investment it should also be an advisory body used to tell entrepreneur exactly what type of businesses would help the local economy. This investment bank would be combined with tax relief, specifically tax relief for manufacturing start-ups. The idea would be that manufacturing start-ups pay no corporation tax for say their first three years and when they do start paying it is lower rate of corporation tax, which gradually rises, as the company becomes more established year on year until they pay the full rate of corporation tax. The idea is that with the local funding combined with tax relief for manufacturing start-ups is a British version on the German Mittlestand will be created. This will further encourage large companies like Nissan in Sunderland to make more cars here, as they can save money by purchasing parts from local manufacturing companies. We can also get companies like Dyson to return home from china as the reason they gave for leaving is that they got all their parts made abroad. This clearly would not be an overnight thing but it would be the seed that helps to continue the growth of Britain’s manufacturing sector and also help re-balance the economy.
The private investment which probably would probably only come as the economy started growing due to the nature of the investment, is an idea proposed by Blair to redevelop Britain’s sea side towns but could also be used to help redevelop areas of some of our ailing northern cities. The idea is the old idea of super casinos although they are just a small part of the plan they were the part the press concentrated on and attacked to bring the idea down at the time at the time. According to Mr Blair large American leisure companies regally contacted the government and the towns themselves wanting to build vast leisure outlets that included the controversial casinos as well as cinemas, sporting facilities and other outlets. Due to the current state of the world economy there is a good chance the investors will no longer be interested, but when the economy gets growing again it would be a great way to redevelop the cities that get the leisure outlets. It would also be a great employer, initially in the building of the outlets and then staffing the various facilities and even better, it won’t cost the government a Penney. In my view, it was a real shame Brown scrapped the idea, as it is one of the best ways to redevelop a city without pumping in taxpayer’s money.
That's just my view on some of the things the government should be doing first to get us out of our current slump and then to continue growth, obviously as mentioned at the start once the economy is growing again we need to cut government expenditure. Particularly things like welfare and looking at making the NHS more economical, also as more people start working and start spending government tax receipts will increase so cuts will not need to be as severe as the deficit will naturally decrease with greater government income.