Election - business leaders reject proposed NI rise

Labour’s planned one percentage point rise in national insurance for people earning more than £20,000 from April next year, the funds from which would help protect frontline services, has stirred up the first major debate of this general election campaign.

The Conservatives, backed by several high profile business leaders nationally, say the hike will only put jobs and the recession recovery at risk and add they believe savings can be made by cutting waste.

In Worcestershire, businesses seem to be against the proposed national insurance rise but there is a sense that some form of tax increase is inevitable.

Bev Sherratt, finance director at national supply chain specialist TM Logistics in Martley, which employs 300 people across the country, said: “The last thing we need in the current economic climate is an increase in national insurance.

“Our business is always looking to increase efficiency and reduce waste in order to remain successful. We need the government to do the same rather than taxing employment.

“In our industry, this comes alongside increased fuel duty at a time when our customers are looking for us to deliver savings rather than increase their cost base.”

Rod Smith, who runs fabrication specialist Winstanley on Pershore Trading Estate and employs 80 people, said: “As a manufacturing company I would prefer not to have any further increase in tax, which is what this is. I want to carry on employing local people rather than jobs being exported overseas.

“Our wages and costs are horrendous and we are competing with overseas manufacuterers who don’t have such onerous costs.”

Gary Woodman, policy and education manager for Herefordshire and Worcestershire Chamber of Commerce, said: “The British Chambers of Commerce and business have been lobbying to reverse the employer national insurance contributions planned rise which is seen as a tax on jobs.

“However, business recognises that as a country we have to implement actions that will impact on the public deficit and ensure our future economic success.

“The chamber of commerce believes that there will inevitably have to be tax increases in the coming months, either national insurance rises, VAT increases or income tax.”