Letter to the Chancellor about increases to National Insurance Contributions
25/11/08 | 16:35
Director-General of the British Chambers of Commerce (BCC), David Frost, has today written to the Chancellor regarding the announcement to increase National Insurance Contributions (NICs) in his Pre-Budget Report.
On the Treasury's own figures, the increase in NICs will cost employers £2.7 billion when the adjustment is made in 2011.
In the letter, David Frost points out that "Raising NIC rates, following the undoubted pain that the business community will feel over the coming year, will act as a barrier to employers wanting to grow their workforce."
Ends
Media Contacts:
Fiona Cunningham
Tel: 020 7654 5812
Email: f.cunningham@britishchambers.org.uk
OR
Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk
Notes to Editors:
The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.
Rt. Hon. Alistair Darling MP
Chancellor of the Exchequer
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ
Dear Alistair,
I was encouraged by a number of the measures for small business contained in the Pre-Budget Report, but I am writing to inform you of the British Chambers of Commerce’s concerns surrounding your proposed changes to National Insurance Contributions (NICs) from April 2011.
As you are aware, in the BCC’s PBR submission we advocated a cut in NICs as a tool for stimulating employment. Unemployment is likely to rise far higher than its current level and firms should be given every incentive possible to take on and retain staff coming out of the economic downturn.
Raising NIC rates, following the undoubted pain that the business community will feel over the coming year, will act as a barrier to employers wanting to grow their workforce.
While I recognise the importance of restoring the public finances to a sustainable path in the medium term, there is a danger that imposing what is effectively a tax on employment would harm the UK’s recovery, and I urge you to consider other avenues to meet your desired outcome.
Should you want to discuss the NIC measures further, I would be glad to meet with you and your officials.
Yours sincerely
David S Frost
Director General