Friday 22 January 2010

Business groups call for NI rise to be scrapped

The government has been called upon to scrap next year’s one per cent rise in National Insurance.

Claiming the rise could have an adverse impact on economic recovery, British Chambers of Commerce and the Chartered Institute of Personnel and Development (CIPD) have written a joint letter to Lord Mandelson urging him to cancel the proposed rise in payments by businesses, saying that business will suffer from the financial burden it will cause, and hit any recovery in the job market.

A CIPD survey showed that 10 per cent of businesses felt that the increase would interrupt their recruitment. Worse, just under one in ten said the NI rise would cause them to make job cuts.

The NI rise is designed to help the government plug the whole in its coffers, and the CIPD estimates that it will cost employers £14bn over four years. They say it amount to a tax on jobs, and should be scrapped.

The one per cent rise is the result of two 0.5 per cent rises announced by Chancellor Alistair Darling in separate budgets, in late 2008 and in 2009.

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