National Insurance Holiday – a feeble start
Ed Balls was very effective today, ridiculing George Osborne’s National Insurance “holiday.” This is one of the government’s new employment programmes, letting new businesses off paying National Insurance Contributions for the first 10 employees hired in their first year. Back in 2009, the Conservative Party claimed that it would create 60,000 jobs in two years, but by the time of last year’s Budget this had risen to 400,000 businesses (and presumably more jobs) benefiting. The government was so worried that this offer was going to be over-subscribed that they excluded businesses in London, East Anglia and the South East, and even so, budgeted to spend £50 million in 2010-11, rising to £370 million in 2012-13.
Well, how’s it going? As Mr Balls pointed out, figures the Treasury tried to slip out on the quiet showed that the actual figures so far are 3,000 businesses and an estimated 6,000 workers. Total cost so far? £5 million.
We’ve argued for some time that the government has talked up the National Insurance holiday to a ludicrous extent. It isn’t actually harmful – some jobs will be created, but it doesn’t come anywhere near matching the scale of the problem. And it certainly doesn’t compensate for the vandalism of closing down the Future Jobs Fund. Of course, it’s possible that this is just a slow start, eventually it’ll be a great success and I’ll have egg on my face.
But somehow I don’t think so.