Employer Fear Budget Impact

Dozens of top business leaders have turned against Labour for their plans to increase National Insurance payments should they remain in Government after the General Election.

Around 70 heads of Britain’s top businesses, in charge of almost a million employees, have also called for the proposed “tax on jobs” to be axed. Those who have publically condemned Labour include the chief executives of Reed, Easyjet, Travelodge and House of Fraser.

This is also evident in the results of a recent survey by employment law firm Citation, which found that around 80 per cent of businesses felt that the Budget would have a negative effect on their business.

Speaking about the National Insurance increase, one participant in the Citation survey said: “This will greatly affect our business when it comes to hiring apprentices. Our decision for creating new job opportunities will have to be carefully considered; ultimately this planned increase in NI could have a detrimental impact upon improving overall employment levels.”

Commenting on the findings, Lindsay Hill, Chief Executive at Citation plc said “Our results suggest that many SMEs feel let down by the budget and by the lack of an adequate platform to support their business during the foreseeable tough trading conditions. The announcement of the new targets to help SMEs win public sector tenders will of course benefit SMEs, however it is inevitable that cuts in public spending will occur and we should be mindful to wait until the election to judge the impact.”

Comments left on the survey were generally negative and the prevailing opinion that the budget will mean "Increases in taxes" and "Economic downturn". There is a degree of cynicism seen in comments such as "Taxes have to go up whoever gets in" and "Labour is anti small business".

Prime Minister Gordon Brown has defended plans to raise the National Insurance, by claiming that it is better to increase taxes than to cut vital public services. However, many critics have accused him of trying to sabotage Britain’s economy as it continues its recovery from the worst recession in decades.

These revelations come in light of the recent Budget report from Chancellor of the Exchequer Alistair Darling, which has been condemned in some quarters as it failed to address the issue of reducing Britain’s record deficit, which is forecast to hit £167bn in 2010.

As the nation prepares for the General Election, which has been called for 6th May, business leaders feel that the Budget proposals do not inspire confidence, or help businesses to develop as they fight their way out of the economic downturn.

Citation’s compliance solutions in both employment law and health & safety provide SMEs with systems enabling them to easily demonstrate compliance for public sector Pre Qualification Processes (PQQs), improving their chances of winning contracts.

For more information about Citation and the services they provide, visit the Citation website at http://www.citation.co.uk/.

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