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BTEC BUSINESS level 2

BTEC BUSINESS level 2. UNIT 1 – p4 The role of Government in creating the business environment Mrs Hilton for revisionstation 2012. Learning objectives. By the end of this session you should be able to: P4 outline the role of government in creating the business climate

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BTEC BUSINESS level 2

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  1. BTEC BUSINESS level 2 UNIT 1 – p4 The role of Government in creating the business environment Mrs Hilton for revisionstation 2012

  2. Learning objectives • By the end of this session you should be able to: • P4outline the role of government in creating the business climate • Create a set of notes from which you can create a tabular report (p4)

  3. Notes 1. National Government

  4. Discussion – what do you already know about the UK Government? Which political party in power? Who is the Prime Minister? Who is the Chancellor?

  5. Answers?

  6. House of commons • Led by the prime minister, the UK government is formed by the political party (or coalition of parties) with the greatest number of MPs elected in the House of Commons. • The prime minister selects a team of MPs and members of the House of Lords to help run the country.

  7. Government: running the country • The government is in charge of managing the country and deciding how our taxes are spent. Different government departments run different things. For example, there is a department in charge of health and another in charge of transport.

  8. How Government creates the business climate • Voters expect the government to manage the economy well. • Government economic objectives include: • Full employment, that is, as many workers in jobs as possible. • Lower prices. Continually rising prices is called inflation. Low inflation is an aim of any government. • Economic growth. The aim is to produce more goods and services each year so that individuals have a higher standard of living. • http://www.guardian.co.uk/society/video/2012/nov/14/unemployment-work-jobs-minister-video • Video on employment

  9. Government spending and taxation • The government can change the way businesses work and influence the economy either by passing laws, or by changing its own spending or taxes. For example: • Extra government spending or lower taxes can result in more demand in the economy and lead to higher output and employment. • Governments can pass legislation protecting consumers and workers or restricting where businesses can build new premises. • Create your own version of this chart – data is on your sheet

  10. Moneyout Moneyin

  11. Government and taxation • The main types of tax include: • Income tax taken off an employee's salary. This results in less money to spend in the shops. • Value added tax (VAT) added to goods and services. A rise in VAT increases prices. • Corporation tax is a tax on company profits. A rise in this tax means companies keep less of their profits leading to less company investment and the possible loss of jobs. • National Insurance contributions are payments made by both the employee and the employer. They pay for the cost of a state pension and the National Health Service. An increase in this tax raises a company's costs and could result in inflation. • Two roles: • Take tax from business and workers • Spend tax on: • http://www.guardian.co.uk/news/datablog/interactive/2012/mar/20/budget-2012-how-taxes-spent-interactive • Interactive graphic showing what tax is spent on. Click and choose a wage of £40,000 – how much tax a year would you pay?

  12. Video: How does the government affect the economy? What is the ripple effect?

  13. What is a recession? How might it affect business?

  14. The business cycle • Economic activity is the amount of production taking place. Over time, the level of economic activity in a country tends to move up and down in a business cycle. • In a downturn or slump output falls and many businesses shed staff because sales are falling. The economy experiences a recession. • In an upturn or boom, businesses increase output and hire more staff to keep up with extra demand. The economy experiences economic growth. • The impact of a recession varies from business to business. Firms making premium and luxury products are hit hard by any downturn because customers often cut back on non-essentials first. Businesses with large debts can find it hard to meet interest payments when sales fall. • However, a recession makes it easier for a business to recruit new staff in readiness for any upturn in economic activity. • Create your own version of the business cycle diagram to add to your report. Bigger version on next slide

  15. Unemployment • Statistics indicate the economic health of the country • Unemployment increases in a recession – lack of demand for good leads to businesses shedding jobs to cut costs – to survive http://www.bbc.co.uk/news/10604117 Employment tracker interactive graphic

  16. Unemployment Video Watch the video: what is happening in the public and private sector?

  17. Levels of employment and its effect on business BBC site: 3 videos, article and some great statistics

  18. Unemployment – as at Dec 2012 • 16-24 years olds out of a job: 965,000 • 16-24 that have NEVER had a job 650,000 • Current rate of unemployment 2.49 million (claiming jobseekers) • How does that compare with previous years? (stats no use on their own)

  19. UNEMPLOYMENT – INTERACTIVE GRAPHIC • Click the link on the left top go to an interactive UK Unemployment Graphic • Drag the blue bar over the timeline to watch it change and click on the white circles for more information

  20. Inflation • Find a chart that shows the Inflation in the UK in 2012. Save this to your area.

  21. What is inflation • Inflation is the rate of change of prices for goods and services, it looks at the prices of hundreds of things we commonly spend money on, including bread, cinema tickets and pints of beer - and tracks how these prices have changed over time. • If inflation is 3%, this means that on average, the price of products and services we buy is 3% higher than a year earlier. • Or, in other words, we would need to spend 3% more to buy the same things we bought 12 months ago. • http://www.telegraph.co.uk/finance/economics/9674117/UK-inflation-jumps-to-2.7pc.html • Why is it bad news for the economy and the Government? • What is disposable income?

  22. Notes 2 Local Government

  23. Why do we have a local government when we have a national one? • While the origins of local government are medieval, it developed into a recognisable form of government in response to the new urban poor of the Industrial Revolution. • It was the Local Government Act 1888 which created 66 county councils, plus a London county council, all run by elected councillors. • Local government today comprises 408 councils in England and Wales, with almost 21,000 elected councillors.

  24. Highways, roads andtransport – controlled by local government • Highways – non-trunk roads and bridges • Street lighting • Traffic management and road safety • Public transport – discounted travel schemes and local transport co-ordination • Airports, harbours and toll facilities • Business needs to move its goods about • http://www.bbc.co.uk/learningzone/clips/supply-and-distribution-of-goods-in-britain-pt-1-2/7976.html • Distribution clip

  25. Planning and development • Building and development control • Planning policy – including conservation and listed buildings • Environmental initiatives • Economic and community development • http://www.bbc.co.uk/news/uk-england-19909136 • Article from BBC

  26. Environmentalservices • Environmental health – including food safety, pollution • Licensing – including alcohol, public entertainment, taxis • Agricultural and fisheries services • Waste collection and disposal, recycling and street cleaning

  27. Central and other services • Local tax collection – council tax and non-domestic rates (business rates) • Local land charges • Pairs – research business rates in your local area

  28. European Government

  29. We are part of Europe. How many countries are part of Europe – can you name them? What does being in Europe mean for UK business?

  30. Answers • It’s a free trade zone! • The EU is the biggest free trade zone in the worldgives us an unhindered movement of goods and services between UK and the rest of Europe means a wealth of choice when buying raw materials or distributing goods.

  31. Other reasons why its good to be in Europe! It’s right on our doorstep! • Businesses can reach places such as the Netherlands, Germany and Scandinavia in only a few hours via budget airlines English – the beautiful language of business! • Around 40% of EU citizens learn English as their first foreign language. Stunning stat! Generally speaking, English also dominates as the language of business offering UK organisations more of an opportunity for comfortable business conditions than they may have thought!

  32. EU • Watch the video – how does the EU affect business – get ready to write a long list. • http://www.bbc.co.uk/learningzone/clips/a-whistle-stop-tour-of-the-key-eu-institutions/6863.html • Video on European Government • EU putting up prices

  33. http://businesscasestudies.co.uk/business-theory/external-environment/government-and-eu-influences-on-business-activity.html#axzz2FsusV4t8http://businesscasestudies.co.uk/business-theory/external-environment/government-and-eu-influences-on-business-activity.html#axzz2FsusV4t8 • Link to EU case study from the Times lots of information here

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