According to the CIPD, the economic recovery of the UK following the recession looks likely to be “jobs-light”, leading it to contact secretary of state for business Peter Mandelson to warn of the outcome of a one per cent increase in employers’ national insurance contributions (NICs).
This rise has been scheduled for April 2011, but the CIPD and BCC are recommending a freeze on the youth and development rates of the national minimum wage.
Recent research conducted by the CIPD has revealed 12 per cent of employers hope to recruit fewer new staff as a result of the scheduled increase in national insurance, while eight per cent are planning redundancies.
John Philpott, CIPD chief economic adviser, said: “With many employers struggling to contain labour costs this year and next against a likely backdrop of still subdued demand, the planned hike in NICs will inevitably cost jobs.”
And Adam Marshall, BCC director of policy, called the increase in NICs a tax on jobs.
Recent research from the Office for National Statistics revealed the number of unemployed people fell by 7,000 over the last quarter to reach 2.46 million – the first fall since May 2008.
