Business Groups are appealing to Lord Mandelson to scrap the National Insurance rise
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Two business groups have urged the government to scrap next year’s proposed National Insurance increase
The British Chambers of Commerce and the Chartered Institute of Personnel and Development (CIPD) have written a joint letter to Lord Mandelson, asking for the 1% insurance rise to be scrapped, saying its little more than a ‘tax on jobs’. The proposed rise is central to the government’s plans to cut the budget deficit.
The business groups say companies will suffer from the extra strain on finances, with a survey by the CIPD showing that more than one in 10 employers predict the increase will make them able to recruit less staff.
Just under one in 10 said the National Insurace rise will force them to cut jobs. The British Chambers of Commerce estimates the extra cost to employers of the rise will be £14 billion over four years.
Both groups also want the government to freeze the minimum wage for young people, saying any rise would be absurd considering the number of unemployed young people.
Chancellor Alistair Darling has said two 0.5% increases in National Insurance will occur in April 2011.
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