Last week Shadow Chancellor, George Osborne addressed the Conservative party and the world’s media with his plans to include a National Insurance holiday for business owners who have recently completed the company formation process. The announcement has been welcomed by economists and business groups alike, though some have commented that the initiative may be too good to be true.
Under Osborne’s plan, newly formed companies would receive a tax break for the first ten employees they recruit. According to Osborne, not only would this plan kick start enterprise, it would also help to create over sixty thousand new jobs.
National Insurance is set to increase by 0.5% in 2011, a plan which many business groups, including the Private Enterprise Institute, have been campaigning against for over a year.
Chairman of the PEI, Peter Halliwell comments: “The Conservative announcement that they will cut National Insurance for new companies has been welcomed throughout our Institute. Our members feel that as unemployment figures are at an all time high and many recently formed companies cannot afford to recruit, Osborne’s initiative provides a great solution.
“Currently, National Insurance is set to rise which will place a greater strain on struggling business. If the Conservative strategy is commercially viable, it will play an important role to the recovery of UK’s economy and sustaining small businesses.”