Petition calls for freeze on National Insurance

Mar 9 2010 by Karen Dent, The Journal

NORTH East small firms are signing up to a campaign calling on the Government to freeze National Insurance rates.

Increasing National Insurance by 1% would cost around 57,000 jobs nationally but not make much difference to the hole in the public purse, according to research by the Federation of Small Businesses (FSB) and the Centre for Economics and Business Research (CEBR).

The FSB is one of the business groups behind an online petition which will be submitted to the Government calling for the planned 1% increase to be put on hold now and for the immediate future.

FSB national chairman and North East businessman John Wright said: “The rise in National Insurance is a tax on jobs and will cost the country in thousands of jobs, as well as prevent small firms from taking on more members of staff at this crucial time in the country’s economic recovery.

“The FSB has been calling on the Government to take steps to make it easier for the country’s 4.8 million small firms to employ staff.

“The FSB knows that small firms want to recruit over the coming year, but are put off by taxes.”

Chester-le-Street-based North East Demolition & Contracting said the business was already struggling to find work at decent rates because of the general economic situation.

The company’s David Madden said: “The last thing we need is more costs heaped upon us. This recession has seen hundreds of thousands thrown out of work in the construction industry.

“It makes no sense to impose yet more costs via taxation, as this will only lead to even more job losses.”

Another North East FSB member, who wanted to remain anonymous, said it was already facing problems because of late payment charges issued by HM Revenue & Customs and further burdens imposed by the Government would be too much to bear.

FSB North East policy manager Simon Hanson said: “These examples from small businesses show the impact that the rise in National Insurance contributions will have on the North East.

“The Government can give the economy a real helping hand by freezing National Insurance and helping to encourage small firms to grow and take on additional employees.”

The petition, which is also backed by groups including the CBI, British Chambers of Commerce and the Forum of Private Business, can be viewed at www.no-nics-rise.co.uk