The British Economy and Austerity

The British Economy isn't doing that well at present. Since 2008 and the financial collapse, many people have lost their life savings, even their lives, but people were optimistic and thought we would see a recovery.

It has been 7 years and we're still suffering from the after-effects of the recession. Here in Britain our Government has imposed what they call 'austerity', which is just their way of saying they will cut funding to public services, force people off benefits (even disabled people!) whilst at the same time giving more money to the European Union (which we have never been allowed to have our say on) and to foreign dictators (they call it 'foreign aid, but it's not helping many out of poverty!).

There seems to be a lot of people telling us all that a free market is great, it will solve everything. The problem is, this isn't entirely accurate. We have a free market yet there are more and more people becoming unemployed as a result. A steel company has announced it will be making nearly 2,000 people redundant and 'mothballing' it's UK plant. This is due to low prices for steel, and high energy costs that make it difficult for them to run said plants. Other companies have also complained about the same and have asked the British Government to intervene, but State aid is against European Union rules (well, for us it is, not the French or Germans is seems...) so we cannot help businesses here in Britain.

Although I do agree that a free market is beneficial to many, I believe a mixed economy is better. A strong economy needs a free market along with Government intervention when required. Keynes had the right idea, and I am a strong supporter of having increased Government investment to give the economy a boost. This is easily done and doesn't, as many claim, automatically result in inflation. A Government could easily choose to purchase goods and services from many small and medium sized businesses to help increase their earnings, and if they earn enough as a result, then it can create new jobs. The benefit for the Government, in addition to having a good strong economy they can boast about, is the businesses will return most of the money to the Treasury in the form of taxes. This isn't just corporation tax (companies) or PAYE/NIC (self-employed and employed) but also as VAT related taxation. So the Government will find it's investment returned with a nice 'profit', and at the same time they have given people hope.