The new Conservative-Liberal Democrat coalition government has this afternoon confirmed that it will scrap part of Labour’s planned rise in National Insurance.
In a Coalition Agreement document published today, that sets out some of the policies agreed upon by the two parties, the government confirmed: “The increase in Employer National Insurance thresholds proposed by the Conservatives will go ahead in order to stop Labour’s jobs tax.”
A raft of retailers joined a campaign backing the Tory stance before the election. They included Marks and Spencer executive chairman Sir Stuart Rose, Kurt Geiger chief executive Niel Clifford, and Next chief executive Simon Wolfson.
Retailers raised concerns that a rise in National Insurance would hamper job creation, lead to widespread job cuts and put the economy in peril.
The new government, which has promised an emergency Budget within weeks, has appointed Liberal Democrat MP Vince Cable as Secretary for Business, Innovation and Skills. Junior ministers are yet to be announced.
British Retail Consortium director general Stephen Robertson said: “We’re very pleased the coalition will have a Budget in the next couple of months.”
He added that “reducing the tax on jobs is a good thing” but that the government “could go further” by scrapping it altogether.
He cautioned: “It’s not at all clear where the coalition is going yet. We’ll be pressing government to look at cutting public expenditure before they look at tax rises. The number one issue for the UK is the economy.”