By Tim Montgomerie
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A little while ago the Chancellor gave the €urozone six weeks to save itself. Osborne has about the same time until 29th November, when he delivers his Autumn Statement. Matthew d'Ancona, a commentator with good connections to Number 11, told his readers that it will include “big, controversial announcements”. It needs to. Yesterday's jobs news was hugely disappointing. Unemployment is an economic and social evil. Today's newspapers are not united on what to do but they are united in believing that the Coalition hasn't done enough to boost growth:
- Sun Says: "The Government has to stop wringing its hands about unemployment and get on and do something. We know there's a plan for the deficit. But where's the plan for jobs? …For all their promises about cutting red tape and providing help for business, Messrs Cameron and Osborne have failed to match words with action. We need boldness, imagination, energy."
The Times (£): " the Government needs to come up with a convincing update to its growth strategy next month, including a more ambitious approach to attracting private sector money into infrastructure projects. Ministers should also look at measures targeted towards employment. Last year the Government introduced a half-baked scheme that waives employers’ national insurance contributions for the first ten staff taken on by new companies outside the South East and East. Unsurprisingly, it has been a flop and should be replaced with something bigger and better."
- Express: "Every feasible measure to find jobs for young Britons should now be pursued. This may mean a temporary suspension of the minimum wage for young workers to make them more attractive to struggling businesses – it certainly should mean the banning of other EU nationals from entry-level positions in British companies until the crisis is over."
- Telegraph leader: "There is one proposal in Labour’s otherwise gossamer-thin alternative strategy that has merit – the call for a National Insurance holiday for small firms that take on new employees. Mr Osborne should not only adopt it when he unveils his autumn statement next month, he should beef it up by giving all employers an NI holiday for new recruits, for an initial period of two years. The Treasury will have to forgo some projected revenue, but that would be dwarfed by savings made on welfare and by the income tax receipts that would be generated. It’s a simple, self-financing measure that could prove effective at this testing time."
- City AM: "Britain’s youth doesn’t need more QE or a fiscal stimulus; it needs better education and a bonfire of the rules and red tape that are discouraging firms from employing them. George Osborne needs to get his thinking cap on – and stand ready to confront Brussels."
- Independent: "the judicious use of planned infrastructure investments could make a real difference. Contractors bidding for work on large-scale schemes such as road upgrades or the roll-out of high-speed broadband might be required to invest in high-quality apprenticeship programmes, or take on and train unemployed youngsters. There is arguably even a case for a public housing investment programme, helping to address the looming housing crisis and to boost the struggling construction sector, while also creating job opportunities, particularly for young people."
- The Guardian: "The coalition has scrapped the maintenance allowance for staying on at school, cut back on university places and abolished the future jobs fund. With nothing substantial in the place of these crushed opportunities, it ought to come as no surprise if increasing numbers of youngsters now have nothing to do. This summer's riots were an unmissable straw in the wind."
On ConservativeHome today Ryan Bourne of the Centre for Policy Studies argues for economy boosting tax cuts. Contrary to what the Chancellor has argued, he says tax relief is affordable if the government changes its political priorities. He argues for reform of the pension tax relief system and that savings should be ploughed into tax reliefs that will help today's economy. Top of his wish list is a reduction in the main rate of employer NICs to 12%. I don't feel equipped to judge Ryan's specific recommendations but I've long been attracted to a reshaping of the tax system that makes it much more job-friendly. If I was in Osborne's shoes I would be doing everything I could to cut the burdens on employers and, if necessary, raising taxes on expensive properties, pollution and fatty foods to do it. I'd make a virtue out of those painful decisions to present myself as the Chancellor who was putting jobs first, second and third.
Osborne has long hinted that the darkening of the economic skies has provided "an opportunity to make some difficult trade-offs in favour of growth that might get parked in the "too difficult" box in calmer times."" (Telegraph, 7th August). He must make those trade offs next month – overcoming Liberal Democrat resistance with all means at his disposal. Those means should include threats to publicly name and shame them if they oppose measures – especially deregulatory and green-sceptic measures – that he sees as necessary for economic competitiveness. He already has a bold plan to reassure the world that Britain will pay off its debts. He doesn't have a bold plan to ensure international business sees Britain as an exciting place to do invest and recruit. Next month's Autumn Statement is his big opportunity to change that. He mustn't miss it.