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NI increases 'could dent confidence'

Plans to raise national insurance (NI) contributions for employers could dent confidence and hinder any recovery in the UK economy, it has been claimed.

Steve Huxham, chairman the Recruitment Society, said active individuals provide a boost to the economy while those out of work do not. As a result, any moves by the government to make employers think twice about taking on additional members of staff could be a step in the wrong direction.

He commented: "Anything that is going to dent confidence has to be a bad thing. It is employers that create wealth and they create that also through employing staff."

According to a speech on the pre-Budget Report by the Chancellor of the Exchequer on December 9th last year, no one earning under £20,000 will pay additional NI contributions under the new proposals.

However, plans to raise NI by 0.5 per cent for those who earn more than this threshold could raise an additional £3 billion per annum from 2011-12.