Chancellor George Osborne has identified that the government will likely implement further tax and welfare cuts in the future, so that they can realise their ultimate goal of achieving ëfull employmentí across the country.
Speaking in Essex, the Chancellor argued that “unemployment is never a price worth paying, but artificial jobs paid for with borrowed money doesn’t work either”.
Mr Osborneís remarks suggest that the government will break away from the political consensus towards full employment that has been followed since the Thatcher era, when the Conservatives brought an end to the post-war governmental mentality of striving to achieve full employment for all eligible people across the UK.
Instead, Mrs Thatcher sought to take a libertarian approach to economics, in which the doctrines of the free market and the ideology of Milton Friedman necessitates that there would always be a natural level of unemployment within any state, and that utilising monetary policies to try and change this is both counterproductive and unbeneficial.
Whilst Mr Osborne issued his support for reversing consensus towards full unemployment, he did retain highlight that he would not be prepared to subsidise the costs of achieving full employment through increased levels of spending, arguing that this would be fundamentally counterproductive as it would result in taxation rising eventually and subsequently people would lose their jobs.
Instead, he suggested that future tax and welfare cuts would be the solution to attaining full employment across the UK.
“You can’t abolish boom and bust,” he said. “There are always going to be ups and downs to the economic cycle.”
ìHowever, mass unemployment is not a price worth paying, and I will strive to achieve the fullest possible level of employment by instigating tax cuts for businesses so that they can create more jobsî.
“I’m making a new commitment – a commitment to fight for full employment in Britain.”
“To have more people working than any of the other countries in the G7 group. That’s my ambition.
“The best place in the world to create a job; to get a job; to keep a job; to be helped to look for another job if you lose one.”
“A modern approach to full employment means backing business. It means cutting the tax on jobs and reforming welfare.”
Mr Osborneís remarks come on the backdrop of his Budget made two weeks ago, in which he identified his intention to implement personal and business tax cuts that will be ëthe largest for two decadesí.
Back in 2010, the government rose the personal allowance threshold substantially from £6.500 to £10,000, representing a monumental change in parliamentary policy towards tax. The move has allowed workers to retain over £700 more of their salary tax free, and has formed the foundation of the governmentís overarching aim to make ëwork payí as a merit of seeking to get into employment.
“These are the biggest cuts to personal and business taxes for two decades… this week you will keep more of the money you earn.
“This week your business can keep more of the money it makes, so you can invest, expand and create new jobs.”
The Chancellor also outlined that the government would be instigating further cuts and caps on welfare in the future, and in particular identified that he would be making it compulsory for people to have sought work for a week before they can receive any unemployment related benefits.
He argued that the measure, supplemented by a cap in the total amount a government can spend on welfare, would go a long to tackling the endemic and ìdeeply entrenched benefits cultureí that has marred the country in recent times.
ìWe are backing businesses by cutting their taxes so they can create jobs, cutting the tax on hard-working people so their job pays, and holding back welfare rises and imposing more conditions on those claiming the dole, so that getting a job pays more”, he added.