Tory national insurance "tax on jobs" rubbish debunked

The Tories would like you to believe that a planned National Insurance increase of 1% for workers earning more than 20,000 a year will cause job losses. They haven't actually gone on to say anything specific about it. In the computer industry there's a little saying we have, FUD it stands for Fear, Uncertainty and Doubt. Essentially the Tories are guilty of spreading FUD. They're trying to scare people into thinking this will lead to mass unemployment.

However a 1% increase in National Insurance is not statistically significant. Based on my calculations with estimates provided by the Federation of Small Businesses in Wales (which are probably high estimates at that) such an increase would only cause an effect of less than 0.2% on what companies spend on employing people. And that figure is probably inflated as I don't have the exact breakdown of workers earning more than 20,000 so instead it takes into account the entire UK workforce, so in reality it is probably closer to 0.1%. That's taking the Tories at face value.

The rise doesn't happen until 2011 - after 12 months of growth

An increase in employment costs of between 0.1% and 0.2% will get absorbed by a year of growth. A report out today from OECD states that the UK will grow an annualised 2% in the first quarter of this year, and that they expect the UK to be growing faster than any developed nation other than Canada with a massive 3.1% in the second quarter of this year. The bottom line is the UK is well on track for a solid and rapid recovery before 2011, business can easily afford the planned rise in National Insurance. Business should pay more, they caused the recession, they chucked people out of work despite being profitable, now they can at the very least least help pay for it.

The Tories said the same about the minimum wage

Let's also not forget that the Tories claimed introducing the minimum wage would also hurt employment, they claimed it would lead to a million more unemployed - in reality the numbers in employment grew. Just like employment will be growing in 2011 - not shrinking like the Tories claim.

More people in work, despite just coming out of recession than in 1997

Labour's track record on employment has been solid. In the 1980s the Tories chucked millions of people out of work. Even with the biggest recession in a century, there are more people employed today than when Labour took over in 1997. That's not down to chance, Labour continued spending to keep the economy running, the Tories if they had their way would cut spending and cause a deeper and longer recession, just so the rich wouldn't have to pay a penny more. At the end of the day government spending is money in the economy, it doesn't dissapear into a black hole, it pays for teachers, nurses, doctors, civil servents and so on, those people inturn spend money to keep the economy going. Cutting spending, is cutting jobs. It isn't something that can be done likely or willy-nilly just to fund tax breaks for the rich.

No feedback yet