Will National Insurance Rises Kill Jobs?

National InsuranceLabour plans to increase National Insurance contributions by 1% for employees and employers from next April. They claim that is needed to pay for public services during the recession.

The Conservative leader David Cameron says the move will be an ‘economy killer’, stating, “If we put up National Insurance contributions on every job, employers will have to pay more for them. That’s bound to be a tax on jobs. National Insurance hits the cost of every job and also hits everyone in the pocket. We say that’s not the right answer. Putting up the cost of employment will lead to fewer jobs being created and it will probably lead to jobs being lost. It would be an economy killer, a recovery killer, a jobs killer.”

The Conservatives have been backed by business leaders who say increasing the cost of paying wages will reduce the number of jobs they create. Signatories included Marks & Spencer’s Sir Stuart Rose, easyJet founder Sir Stelios Haji-Ioannou, Sainsbury’s chief executive Justin King, JCB chairman Sir Anthony Bamford and GlaxoSmithKline chairman Sir Christopher Gent. They wrote that a Tory commitment to reverse the bulk of NI rises for employers and staff would “protect jobs and support the recovery”.

So what do you think? Will an increase in National Insurance kill jobs? Please feel free to leave your comments below.

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