Rishi Sunak plan to fix unemployment and boost the economy could include national insurance holidays for employers


NATIONAL insurance holidays for employers taking on new staff are among the plans the government is thought to be considering as it looks to boost the economy and get people back into work.

Employers currently pay 13.8 per cent towards employees’ national insurance if they earn over a certain variable threshold – for most, it’s if you’re paid more than £169.01 a month.

Chancellor Rishi Sunak (pictured) is thought to be considering offering employer national insurance holidays for new workers

But the The Telegraph reports that the Treasury is thought to be considering waiving this for a period for firms taking on new employees.

A similar policy saw new businesses in certain areas of the UK starting up between June 22, 2010 and September 5, 2013 able to get national insurance holidays of up to £50,000.

It comes as chancellor Rishi Sunak warns of a “never-seen-before coronavirus recession” leaving permanent damage on the UK’s economy, which has already shrunk by 5.8 per cent in March, according to the latest figures.

Benefit claims for jobseeker’s allowance and for the searching for work element of Universal Credit jumped 70 per cent in a month to 2.1million in April.

While 8.4million people have been placed on the government’s furlough scheme.

But the government is also said to be looking at starting new infrastructure projects in order to create new roles.

This could include updating Britain’s creaking broadband networks to fibre – something outlined in the Conservative manifesto.

Other options thought to be on the table include further benefit increases, raising the minimum wage, and guaranteeing the living wage for care workers.

Benefits went up in line with inflation for the first time in four years this April, while the national minimum and living wages rise each April.

But think tank the Institute for Fiscal Studies (IFS) says around 450,000 care workers earn less than the separate voluntary real living wage, as determined by the Living Wage Foundation.

The chancellor has also refused to rule out tax hikes for millions of workers to pay for coronavirus, despite the Conservative manifesto promising not to raise the rates of income tax, national insurance or VAT for five years.

Workers currently pay income tax at varying rates dependent on their salary on money earned above £12,500, while most pay national insurance at 12 per cent on top. The standard rate of VAT is currently 20 per cent.

But The Telegraph says any increases to taxes are thought to be on hold until after economic growth recovers.

The newspaper continues that measures are unlikely to be announced immediately as the government is closely watching how the economy reopens in the next few weeks.

But it says the chancellor is also considering moving this year’s autumn financial Budget to July.

The Treasury declined to comment when contacted by HOAR, but did confirm it’s still working towards an autumn Budget as usual.

Non-essential retailers had to close from March 23 when the UK went into lockdown but garden centres and homeware shops have since been allowed to reopen.

Meanwhile, outdoor markets and car dealerships are allowed to reopen from this week, while non-essential retailers are allowed to reopen from June 15.

Did you miss our previous article…