British businesses want ‘jobs tax’ dropped

THE next government must move urgently to axe the planned National Insurance hike and outline plans to reduce Britain’s deficit or risk a recession relapse, a business group has warned.

In a 90 day challenge laid down to the incoming government, the British Chambers of Commerce (BCC) set out a 12-step plan to promote business growth and economic recovery after the election.

It said Labour’s planned rise in employer National Insurance contributions in 2011 was a “tax on jobs” and must be cancelled in full, alongside other proposals, including freezing public sector pay, developing a radical plan to speed-up next generation broadband and introducing a moratorium on any new employment law before 2014.

David Frost, director general of the BCC, said: “During the first 90 days after an election, an incoming government must make concrete proposals to reduce red tape and tax burdens on business; review how to move the economy away from an over-reliance on consumption and the public sector; and commit to improving Britain’s energy, transport and digital infrastructure.”

Recent output figures for the economy showed the fragility of Britain’s recovery, with gross domestic product (GDP) growing by a weaker-than-expected 0.2% in the first quarter of 2010.

The GDP estimate added to economic fears, coming as unemployment data showed joblessness rising to a 16-year high of 2.5 million. Public borrowing for the year to the end of March came in lower than the government’s original grim forecasts, at £163.4 billion (€187.88bn) versus a budget prediction of £167bn (€181.9bn).

But the figure was still the worst on record.