The Budget: CIPD calls for national insurance rates cut

The CIPD has echoed calls from other employers’ groups for the Budget to cut employers’ national insurance contributions and focus on creating job opportunities for young people and the long-term unemployed.

John Philpott, public policy director at the Chartered Institute of Personnel and Development (CIPD), advised the government that delaying the national insurance increase planned for 2011, as well as cutting current contributions, would bring the economy one step closer to recovery. A £1.4bn job creation programme for these groups would create 21 times as many jobs as an equivalent sum used to cut VAT, the institute added.

Last week business groups the CBI, the BCC and manufacturers’ body EEF called for employers’ national insurance contributions to to be frozen at current levels.

The CIPD has also urged the government to introduce a manufacturing subsidy to support short-time working, and to postpone the annual rise in the national minimum wage due in October to reduce the risk of further job cuts in low-paid sectors.

Philpott said: “This year’s Budget should be about saving existing jobs as well as helping the jobless find work. Employers in general are urging the chancellor to adjust payroll taxes to support employment, while a majority of those in the manufacturing sector believe a short-time working subsidy would enable them to hold on to staff during the recession.”

Philpott added: “The chancellor may decide he can’t afford another substantial fiscal stimulus in this year’s Budget, but by highlighting the relatively large ‘bang-for-the-buck’ from a targeted job creation programme for the young and long-term unemployed, Darling can offer real hope to tens of thousands of jobless people without breaking the bank.”

Last week the CBI called on the government to pump more money into the Train to Gain skills brokerage programme, while the TUC urged the government to consider a £25bn public investment programme, focusing on creating ‘green’ jobs.