Chancellor George Osborne should introduce a National Insurance (NI) holiday to deal with the alarming unemployment figures, according to business head honchos.
Jill McDonald, chief executive of McDonald’s UK, and Ian Cheshire, chief executive of Kingfisher, think that exemption from NI payments for the first six months of new employees would help the situation.
“It would tip the balance. It would be great. If one of my restaurants was in the balance about whether we need to recruit another person, something like an NI holiday for the first three months or six months would make the difference,” said McDonald.
The most recent Office of National Statistics (ONS) figures show unemployment has reached a 17-year high, with the number of people out of work rising by 114,000 to 2.57 million in the three months to August. The number of 16 to 24-year-olds out of work rose to 991,000, the highest total since 1992.
- Read: Why are one in 10 Londoners unemployed?
Cheshire feels that Osborne needs to give businesses an incentive to hire.
“The danger is you have potentially people sitting on cash on balance sheets and not feeling confident enough to invest and create jobs. Employment is the key issue,” he said.
Cheshire added that a reduction in VAT, from 20 per cent back to its previous level of 17.5 per cent, isn’t a feasible option. “It could be short-term help for us but bad for the economy,” he said.
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