National insurance problems could be 'red herring'

Concerns raised over the scheduled rise in national insurance (NI) are a "red herring" according to one expert, who believes the implications will not be as negative as some people have predicted.

Nigel Meager, director at the Institute for Employment Studies, said that the impact on business will be determined by how the revenue raised through the NI increase is spent.

"While businesses inevitably dislike increases in payroll taxes, most economists agree that the immediate direct impact on jobs of the NI increase is likely to be small," he stated.

Companies undertaking sales recruitment will no doubt be affected by the rises but Mr Meager thinks there could be a positive result if the revenue is given to people who put it back into the economy.

Retail sales figures have recently improved according to CBI's latest Distributive Trades Survey, which revealed that 46 per cent of retailers reported sales volumes in early April higher than during the same time in 2009.

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Posted by Wayne Bly and John Oak

Filed: 29-04-2010