Businesses believe a National Insurance holiday should be declared by George Osbourne as a way of reducing unemployment
Ian Cheshire, the chief executive of Kingfisher, the parent company of B&Q and Screwfic and Jill McDonald the chief executive of McDonalds in the UK have called on the Chancellor to introduce the measure at next months Autumn Statement.
Recent figures revealed that the amount of people unemployed has hit 2.57 million, including 991,000 18-24 year olds. This means that the jobless rate among young people is 21.3%, which is bad news for graduates and universities who are trying to show the value of a degree.
A National Insurance holiday would allow employers to be exempt from contributions for around the first 6 months of any new member of staff they hire. Employers are currently obliged to pay 13.8% of an employer’s salary. Some businesses have also suggested that this could just be for young people as many graduates are struggling to find graduate jobs.
Mrs McDonald said: "It would tip the balance. It would be great. If one of my restaurants was in the balance about whether we need to recruit another person, something like an NI holiday for the first three months or six months would make the difference."
The belief that reduction in VAT from 20% back down to 17.5% would do less to bolster confidence and would help businesses in the short term but be bad for the economy. He added that Mr. Osborne needed to give businesses an incentive to hire. "The danger is you have potentially people sitting on cash on balance sheets and not feeling confident enough to invest and create jobs. Employment is the key issue."
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