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The coalition’s new idea for more debt

28 May 2012

9:15 AM

28 May 2012

9:15 AM

How best to help British business? More debt, of course —
varieties of this answer come time and time again from this government. This time it’s Lord Young proposing £2,500 loans for young people, copying a successful model of the Prince’s Trust. The latter
point should give reassurance, as the Trust has quite a striking success rate.

But what would really help business grow is to abolish regulation on firms with 200 employees or fewer, to cut payroll tax — the ‘jobs tax’ as Cameron called it before he increased it —
or cut corporation tax to the 15 per cent that (as Ben Brogan revealed) Steve Hilton proposed before he quit. You can’t really
get a substitute for this supply side reform.

Clegg proposes giving borrowed money in regional development, Osborne proposes sub-prime loans for companies (what could possibly go wrong?) and now Young proposes microloans for people who don’t
inspire the confidence of their bank manager. Young’s plan is the least expensive of the lot, and the sentiments behind it is admirable. But the more this government tinkers, the more we are
reminded that there is no better plan for growth.


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