Measures Taken by the Governments to Influence the Activities of Business Organisations
Our national government as well as the European Union play a big part in influencing business activity today:
• through taxation and spending
• through laws, directives and regulations
• through encouraging business activity through subsidies and support
• by providing advice and support for business.
Here are some examples of the way in which government influences business activity today:
1. Employment Policy
Governments play a major part in trying to stimulate employment. For example, the present government is keen to encourage business efficiency so that UK businesses are competitive in international markets and therefore create jobs. For those who have difficulty finding work, the government has created what is termed 'The New Deal', offering people the opportunity of developing training and experience on government funded and sponsored employment programmes.
2. Regional Policy
At European Union level, funds are made available to support regions of high unemployment and social deprivation such as large areas of Southern Italy and rural France, as well as the Highlands and Islands of Scotland. Regional policy sets out to compensate for the fact that with the development of the more prosperous parts of the European Union, jobs have been lost in other areas.
3. Inflation Policy
The government seeks to make sure that there are no sudden general rises in prices. They do this through the Monetary Policy Committee (MPC) of the Bank of England which sets interest rates. Interest rates are put up if there is a danger of people borrowing and spending too much, thus pushing prices up. Raising interest rates makes it more expensive for businesses to borrow money. It also makes it more expensive for consumers to borrow money. They then have less to spend, which helps to force down prices.
4. Education and training policy
Education and training is seen in the UK as having a valuable contribution to make to business life. The government plays an important part
• through taxation and spending
• through laws, directives and regulations
• through encouraging business activity through subsidies and support
• by providing advice and support for business.
Here are some examples of the way in which government influences business activity today:
1. Employment Policy
Governments play a major part in trying to stimulate employment. For example, the present government is keen to encourage business efficiency so that UK businesses are competitive in international markets and therefore create jobs. For those who have difficulty finding work, the government has created what is termed 'The New Deal', offering people the opportunity of developing training and experience on government funded and sponsored employment programmes.
2. Regional Policy
At European Union level, funds are made available to support regions of high unemployment and social deprivation such as large areas of Southern Italy and rural France, as well as the Highlands and Islands of Scotland. Regional policy sets out to compensate for the fact that with the development of the more prosperous parts of the European Union, jobs have been lost in other areas.
3. Inflation Policy
The government seeks to make sure that there are no sudden general rises in prices. They do this through the Monetary Policy Committee (MPC) of the Bank of England which sets interest rates. Interest rates are put up if there is a danger of people borrowing and spending too much, thus pushing prices up. Raising interest rates makes it more expensive for businesses to borrow money. It also makes it more expensive for consumers to borrow money. They then have less to spend, which helps to force down prices.
4. Education and training policy
Education and training is seen in the UK as having a valuable contribution to make to business life. The government plays an important part