£50m fears over NI increase
NEARLY £50m will be taken out of the Tees Valley economy as a result of planned national insurance (NI) rises, according to new research by the Conservatives.
The news comes as the party yesterday pledged an NI tax-break for start-up businesses.
Under proposals unveiled at the Tory annual conference in Manchester, shadow chancellor George Osborne said waiving the 12.8% employers’ NI contribution for the first 10 employees taken on by a newly-established firm could create 60,000 jobs in the first two years of a Conservative Government.
The party has hit out at Labour’s handling of the economy - in particular the planned 0.5% rise in NI contributions for employees and employers, scheduled to come into force from April 2011.
Tory research showed that the Tees Valley will be hit by a £47.5m tax bill as a result of the increase.
Stockton will be hit hardest with a £15.5m bill, while Redcar and Cleveland and Middlesbrough will have to fork out £9.1m and £8.7m respectively.
The cost of the rise to employees and employers in Darlington and Hartlepool will be £7.2m and £6.95m.
James Wharton, Conservative Candidate for Stockton South, said: “As a result of its appalling handling of the economy, Labour is going to pick the pockets of businesses and employees in the Tees Valley to the tune of nearly £50m.”
Accountant Heather O’Driscoll, of Hartlepool-based Horwath Clark Whitehill, said small businesses could ill afford the extra costs. “£50m per year is a big bill for an area already struggling to cope with a harsh recession that has hit its key industries and caused lots of job losses,” she said.
Business groups have welcomed the NI tax break proposals. The CBI said it would “give a much-needed boost to UK entrepreneurs”, while the Forum of Private Business (FPB) welcomed it in principle as “a genuine stimulus to employment, small business growth and sustained economic recovery”.
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