What happened to the National Insurance holiday?
No news yesterday on the last ‘pro-growth’ measure that the Chancellor announced in his June Budget: a national insurance holiday for business start ups. As Richard wrote at the time, evidence from the past suggested that it’s impacts would be minimal and in February we learnt that take up was extremely low. Yesterday, despite calls for the scheme to be extended, no more news was available on its progress.
At a projected cost of around £320 million a year the funding allocated to this initiative is significant – it is, for example, 16 times more than the Chancellor saw fit to spend on young unemployed people yesterday. But it seems that it isn’t working – and that it may well prove to be a telling example of the limited impacts that such micro measures, even with relatively high levels of funds, can have in the face of severe spending cuts and depressed demand.