National Insurance

A number of influential business leaders are backing Cameron and Osborne by saying that the proposed increase in National Insurance is going to create unemployment and force SME’s to close. They claim the increase will stifle growth and investment which could lead us back into recession. These business leaders are in charge of some of most respected companies in the UK so when they speak we should listen.

Or should we?

Aren’t these are the same business leaders who claimed in 1997 that the National Minimum Wage would destroy jobs and reduce economic competitiveness? They said small companies would have to close, large companies would lay off huge numbers of staff and that it could even lead Britain into a recession. The NMW has had no significant effect on employment. Neither has it had any significant effect on productivity. In light of this the Conservatives admitted they were wrong and in Feb 2000 decided to reverse their policy of abolishing the NMW.

I think the Conservatives and the business leaders backing them are wrong again. I believe the increase in National Insurance is the correct decision. The money will be pumped back into the economy and means that the cuts we need in public spending can be put off until we are certain we are completely out of recession. That extra £6billion will give us the breathing space so that when the time comes for the cuts they might not have to be as savage as we fear.

Cameron and Osborne looked clueless when the Subprime mortgage system in the US collapsed and the world was plunged into recession. They were wrong about the bank bailouts, they were wrong about nationalising Northern Rock etc and they were wrong when they said Labour shouldn’t pump Billions of pounds into the economy during the recession. Governments across the world, including the US, all said the Tory position was wrong. They were the do nothing party and it is lucky they weren’t in power when the proverbial hit the fan.