Supply side policies are mainly micro-economic policies they are designed to improve an economy’s productive potential and its ability to produce.
Supply-side policies may include improving education and training, reducing the power of trade unions, removing regulations and so on.
Economic policy covers economic growth, inflation and unemployment. It is very important to have economic growth as this benefit the population’s living standards and will encourage more people to be contributing to the UK economy by spending which causes growth.
If there is economic growth Curry’s would be making enough profit to offer pay rises, due to an increase in demand and sales. They may also need to employ more staff in order to handle demand and this could lead to less unemployment which would mean fewer people have to be supported by the government.
Industrial policy is designed to increase the quantity and quality of investment in products and services. It promotes economic development. The government provide financial support with tax credits,
Competition policy influences the economy in a big way. It ensures that businesses are under pressure to offer a range of goods or services at the best prices and if they don’t consumers will choose to buy somewhere else which could affect their profit. This policy also makes sure that one business does not control a market and that competition is fair.
The Competition Act 1998 is used to stop businesses preventing competition like:
- When two or more businesses agree to sell a specific product or service at the same price
- Businesses limiting supplies so that demand is driven up to make prices increase
- Businesses that become too dominant
If other businesses in the same market as Curry’s dominated the market this could really affect the amount of customers they get and their profit. Increased competition can help ensure that Curry’s offer their customers the best products at the best prices.
Fiscal policy involves government spending and taxation to increase economic activity. If income tax is lowered consumers will have more disposable income, which means an increase in demand, and more sales for Curry’s. They may also employ more people.
If income tax is increased it will mean that the government will have more money to spend, it is important to keep a balance between taxation and government spending money as this also affects inflation, employment and demand.
Social policy aims to look after and protect the public.it relates to the economic environment as it affects the investment made into public services, crime prevention and housing programmes.
It also ensures that employees are treated equally and sets the minimum wage, this means that when employing people Curry’s can’t discriminate against people and they pay them a fair wage. Crime prevention will make it less likely for Curry’s to be broken into.
Education and training policy affect the level of skills that the people in the UK hold; this also affects operation of Curry’s, as its employees will be required to have certain skills, qualifications and training to be employed and help the business grow, employees will need on going training as the world evolves and new technology is introduced.
This policy affects the different qualifications money is in invested in and support of different types of training.
Transport policy applies to any vehicles on the road. Transport policy affects levels of crime and taxation. It can influence the amount of tax paid as fuel duty and also influences the amount of tax vehicle owners pay to put their cars on the road.
If taxes raise consumers will have less disposable income, this will affect demand for luxury items and this will affect Curry’s profit.
Regional policy relates to particular regions in the UK. The government created policies that adhere to the needs of specific regions. Each region will have different issues that need to be addressed and this happens because of regional policy.
If there is an area that is suffering and has high unemployment the government may invest in Curry’s expanding to that region in order to create jobs for the people there.
Environmental policy ensures that changes to the environment do not have harmful effects on nature, humans and natural resources.
The Climate Change Act has the following targets:
- A climate change risk assessment must be conducted every five years
- A programme has to be put in place to reduce climate change risks
- Public authorities and some companies, must report on what they are doing to reduce climate risk
- A climate strategy has to be published.
When expanding their business Curry’s has to take into consideration how their building and what they are building may affect the environment, they may also have to spend money to change their existing buildings in order to positively impact the environment.
Conclusion
Through time policies are changed, developed and created by the different people in government, these all affect the economic environment and the way businesses operate.
by
georgette94 (student)
