David Cameron's £2.6bn plan to create jobs fails to impress business

This article is more than 11 years old

The Conservatives expect their plans to be criticised by Labour, the Liberal Democrats and the trade unions. But what's unusual about David Cameron's £2.6bn plan to cut unemployment is that it has been criticised by organisations that are normally reasonably sympathetic towards his party.

Here are some examples:

The British Chambers of Commerce
– David Frost, the director general, said: "This policy announcement would have been a valid welfare-to-work initiative in better times, but it is not a survival tool for small businesses during a severe downturn."

The Federation of Small Businesses - John Wright, its national chairman, said: "Small businesses would be better helped by long-term reductions in National Insurance contributions rather than short-term breaks."

The TaxPayers' Alliance – Matthew Elliott, its chief executive, said: "We are in a serious economic crisis that demands bold and radical tax cuts, not tinkering around the edges that will do little for firms struggling to survive. While ordinary people and British businesses will welcome any tax cut, this plan is far too complex and timid."

The Institute of Directors – Miles Templeman, its director general, welcomed the plans but said that they did not go far enough. "There is a case for something more radical, and simpler. More substantial cuts delivered through straightforward tax-rate or national-insurance reductions should be the order of the day."

Needless to say, the Tories' opponents are even more hostile. And perhaps the most credible criticism has come from the Social Market Foundation, an independent thinktank. Ian Mulheirn, its director, says:

It seems very unlikely that the policy would be revenue neutral, or indeed that any savings would be made to offset the costs. Furthermore, it's unlikely to have a significant net positive impact on unemployment because of the substitution problem that arises from excluding the short-term unemployed from the scheme.