National Insurance increase deceit or not
Disappointing that the biggest issue in week 1 of the election campaign is a 1% increase in National Insurance included in the budget and rejected by the Conservatives.
That over 50 top business leaders came out saying they were against it and it would reduce employment has been the flare that lit up the debate. This is said to be a reflection that business has fallen out with Labour after many years when they trumpeted its support.
There appears to be some simple arithmetic to support the business leaders case. National Insurance is charged from a very low wage level and a 1% increase has a disproportionate impact on business performance measures. It could be the difference between profit and loss in these straightened times. Businesses have already driven efficiency as hard as they can. The inevitable response must be to get it back either through not recruiting, shedding staff or increasing prices.
The government throws this back by saying the Conservatives will need to take the money from somewhere else and the business leaders are deceived. However as neither party has come clean on what they really intend to do about the deficits this seems like smoke and mirrors. There seems to also be confusion that some people say the Conservatives are taking money out of the economy by rejecting this measure when actually it is the opposite. The government is taking money out of the economy with the measure and are paying themselves when they admit they are making inefficient use of taxpayers money.
Overall though it seems a minor issue has been blown into a major one and sub-plots have grown all around it. Lets hope it gets better than this although it probably won’t.