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28th Sep, 2021

National Insurance rise is 'wrong tax increase at the wrong time', say region's business leaders

Editorial Correspondent 8th Sep, 2021 Updated: 9th Sep, 2021

TAXING jobs is not the way to pay for health and social care – so say business leaders in Coventry and Warwickshire.

The 1.25 per cent increase in National Insurance contributions – as announced by the Prime Minister yesterday (Tuesday September 7) – will be a blow to firms already struggling due to the Covid-19 crisis, according to the head of policy at the Coventry and Warwickshire Chamber of Commerce.

Sean Rose said: “All of us, as individuals, understand the need to address the health and social care crisis, but the rise in National Insurance is not the answer.

“NI contributions have always been seen as a tax on jobs and, with the economy still yet to reach pre-pandemic levels and 250,000 more people already out of work compared to 18 months ago, this is the wrong tax increase at the wrong time.

“Companies across Coventry and Warwickshire have been working incredibly hard to survive the crisis and are now looking to rebuild and grow once again. That should be the focus as a growing economy with more jobs is, ultimately, what will bring greater prosperity and tax revenue.”

Suren Thiru, Head of Economics at the British Chambers of Commerce, said: “Businesses strongly oppose a rise in national insurance contributions as it will be a drag anchor on jobs growth at an absolutely crucial time. Firms have been hammered by 18 months of Covid related restrictions and have built up huge debt burdens.

“This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit need to drive the recovery.

“Businesses generate prosperity, create jobs and support communities. The focus should be on creating the best possible environment for them to grow and thrive so they can sustainably deliver the tax revenue needed to support our public services and the wider economy.”

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