The new Conservative-Liberal Democrat coalition Government has this afternoon confirmed it will scrap part of Labour’s planned rise in National Insurance.
In a document issued 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 Kingfisher boss Ian Cheshire, Marks and Spencer executive chairman Sir Stuart Rose and Sainsbury’s chief executive Justin King.
Retailers worried 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 told Retail Week: “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.”