It has been revealed by David Cameron that one of his Government’s schemes to help the UK climb out of the economic ditch it has driven into, “National Insurance Holidays”, has had a significantly smaller uptake by small businesses than predicted.
When the scheme was unveiled Cameron and co. estimated 400,000 small businesses would apply for the holidays, which allowed employers to forego National Insurance Contributions for their first ten employees in certain areas of the country.
During Prime Minister’s Questions last Wednesday, having been prompted for a figure by Labour leader Ed Miliband, Cameron was forced to admit only 7,000 businesses have enrolled on the scheme, a fairly whimsical 1.8% of the predicted amount. Miliband said this was more evidence that the Government’s growth policies – especially those designed to help small businesses – “were not working”.
This may be a case of the Government putting the cart before the horse. Recent research has shown that small businesses are increasingly being put off taking on employees due to the increasing amount of red tape surrounding employment. If sole traders and limited company directors are reticent to take on employees, is there any point giving a small cash saving to those who do? Perhaps the Government should focus on making the employment landscape easier to navigate first?
The latest piece of employment legislation to come into force, the Agency Workers Regulations, are estimated by the Government to cost UK businesses between £1.5 and £2 billion over the next year in compliance activity. The AWR were implemented unchanged despite pleas from just about every industry body out there for delays, amendments and reviews.
Although the Government has promised to reduce red tape for small businesses (recently announcing their Red Tape Challenge had resulted in the culling of 160 pieces of legislation), a study by the Forum of Private Business revealed that compliance activity is actually on the up.
Photo by Amanda Slater – CC
