DC has finally got round to setting out some of the Conservative Party’s ideas for tackling the tough economic times that we are soon due to face. The crux of the proposal is to cut National Insurance contributions for those firms who take on people who have been unemployed for three months or more. When this is added to a 3p cut in corporation tax from 28p to 25p it certainly seems overall to be a sound package.
I would however like to see more figures on the matter. Is the idea that this will be self funding in a Reagonomics way? Cameron suggests that these measures will see 350,000 jobs created. Quite how, I’m not sure. Certainly there will be a greater ability on the part of businesses to hire people, but if there simply isn’t a demand for the good/service that a business deals in because people are less willing to spend their money I’m still a bit unsure as to how many jobs will be created.
Undoubtedly a cut in corporation tax is a good idea in encouraging business to Britain, particularly when a number of companies have moved their headquarters to cities such as Dublin. I would however feel a little safer if we were given the figures which Cameron and Osborne have based these decisions.
My biggest worry however is the perception of these proposals. Whilst we have done well to outflank Gordon and announce these measures before he announces his next week, we should note our proposals will not be met by public acclaim. Most of the general public will have little knowledge of the current state of the budget deficit and national debt. They will, however, be pleased if a penny or two are wiped off the basic rate of income tax. Whilst we are right to be pursuing policies such as this, I hope Cameron and co. have other things in the pipeline to ensure people don’t think we are acting against the interests of everyone in the country.