National Insurance

Lord Davies of Oldham Excerpts

Monday 5th March 2012 Lords Chamber

[Lord Sassoon]

Again, I am happy to hear the thoughts of my noble friend about what might be done. The national insurance holiday, which is estimated to be already supporting some 40,000 jobs in new firms, is only one part of the package to help small businesses: the reduction of the corporation tax rate, the extension of business rate relief for a further six months from 1 October this year onwards, the coming national loan guarantee scheme, as well as what the Government did with the above-indexation increase in national insurance thresholds. This is a significant package of which the holiday is only one element.

[Lord Davies of Oldham]

My Lords, the Chancellor has always claimed that the last Budget was not a tax-raising Budget, but I am sure the Minister will acknowledge that national insurance was raised. How much is that going to cost the average worker up to the end of this Parliament?

[Lord Sassoon]

My Lords, the subject of the Question is employers’ national insurance. By introducing the £21 a week above-indexation rise in the threshold, the Government benefited all employers by £3 billion a year through that very significant increase. Job creation in the private sector is in many ways very remarkable. Since the election over 500,000 new jobs have been created in the private sector, thus increasing employment, and only today Tesco announced 20,000-net new jobs in the UK over the next two years. We really must not run down what the private sector is doing to create new and sustainable jobs.