The group says that the proposed National Insurance Increase is a ‘tax on jobs and that the increase will “discourage companies of all sizes from taking on new staff at a critical point in our economic recovery”.
Rather than use a National Insurance increase to close the budget deficit the group is calling for the Government to address the ‘inefficiency in public sector spending’. Last week the REC began a new Public Sector Resourcing Campaign calling for reforms to public sector resourcing and warning against ‘knee jerk job cuts’. The REC’s campaign calls for the government to reduce the cost of back office functions, improve procurement and address the pressing public sector pensions issue.
The group says that research suggests that:
- Employers face a £25.6bn bill to comply with new regulations between now & 2014 (£14bn is the NICs increase)
- A 1% NI increase could result in the loss of 57,000 jobs & could cost the Exchequer £900m in social security payments
- 84% of Institute of Directors members believed that even a 0.5% increase in employer NICs would have a negative impact on the UK economy
- A 1% increase in employers National Insurance will cost the retail sector an additional £220 million per annum
- CIPD research found that 12% of employers intend to recruit fewer staff as a result of the planned hike in employers’ NICs, while 8% would cut jobs
- REC research found that 21% of companies were planning to take on new employees in 2010, recruiters fear this workforce expansion will be choked off by the planned hike in NICs payments
- David Frost – Director General – British Chamber of Commerce
- Stephen Robertson – Director General – British Retail Consortium
- Richard Lambert – Director General – Confederation of British Industry
- Jackie Orme – Chief Executive – Chartered Institute of Personnel and Development
- Philip Orford – Chief Executive – Forum of Private Business
- John Wright – Chairman – Federation of Small Businesses
- Miles Templeton – Director General – Institute of Directors
- Kevin Green – Chief Executive – Recruitment and Employment Confederation
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