Curly's Corner Shop, the blog!

South Shields premier political blog

Start closing down the public sector

with one comment

We need to rejuvenate private enterprise and create additional tax payers

Dealing with the current (and future) budget deficit is a huge problem that will face an incoming Conservative government and some of the options open to them will not be popular, but by far the most important is to start making inroads into reducing the all consuming nature of public spending. The private sector cannot for much longer continue to fund the spending of the public sector.

We must remember that tax revenues are gleaned mostly from those who produce and make a profit from their business and enterprise, these revenues are then spent on government funded projects and the largest slice is allocated to wages in the public sector, be they civil servants, policemen, teachers, doctors and nurses, or High Court judges! The Adam Smith Institute propose that one of the best ways of reducing government borrowing and the budget deficit is to reduce state funded employment:

Making public sector employees redundant would not totally reduce the burden, as they would then become an added burden to the welfare system through social security. Instead, it would be more effective to incentivise them to join the private sector, become entrepreneurial, set up small businesses, and employ people. This could be carried out through a number of measures. For instance, tax holidays for start-up businesses.

You could also increase firms’ willingness to take on new employees by abolishing national insurance. National insurance is a disincentive for businesses to employ people. It would be far more sensible to remove this tax in its entirety, encouraging businesses to employ more people who will in turn pay income tax themselves. This is likely to generate more government revenue than national insurance did to begin with.

Food for thought, and an opportunity for David Cameron and his team (George Osborne and Steve Coulson included) to think about other taxes that could be abolished or reduced which would have the same effect of increasing incentives, we have proved in the past that lower taxes produce more revenue!

Recent talks about abolishing the commitment to reduce Inheritance Tax and CGT shows that Cameron and his team are still able to be blown about by the political winds, this is not what is needed in government, the Conservatives need a plan that is sensible, prudent, and workable economically, not just a plan to get elected.

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Written by curly

July 16, 2009 at 10:42 am

One Response

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  1. Poorly researched pixie dust nonsense warming up for a Tory cull of the public sector. People don’t magically ‘become entrepreneurial’, any more than Gordon Brown could become a gifted leader or I could become a great singer. You either got it or you ain’t.

    No mention of one of the biggest drains on public sector finances – pfi.


    July 16, 2009 at 11:01 pm

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