LABOUR’S parliamentary candidate for Thurrock is calling on the Chancellor George Osborne to give small firms in Thurrock a New Year tax break to help them take on new workers. By extending the national insurance holiday, which does not currently extend to the East, South East or London, to all businesses in every region of the country, the Government could help firms create desperately needed jobs.
New figures slipped out by the Treasury reveal that in its first year of operation the flagship scheme has supported just 2.5 per cent of the businesses promised help by the Chancellor in his first Budget, despite a budget of almost £1 billion. It is also set to cost more in administration and red tape than it has so far given in support for new businesses.
Labour are calling on the government to use the hundreds of millions of pounds of unspent money allocated to the scheme and extend the tax break to all existing small firms, with fewer than 10 employees, who take on extra workers. The national insurance tax break would apply for a year for each additional employee taken on and could help up to 2,790 small businesses in Thurrock.
In his first Budget George Osborne said his policy would benefit 400,000 businesses but the Treasury’s own figures show that just over 10,000 firms received support from the scheme between September 2010 and November 2011, none in Essex.
Just £6 million was paid out to small firms to support 12,400 jobs in the period for which figures are available, but the Treasury estimates that the administration costs of the scheme will be double that at around £12 million.
Labour’s Polly Billington said:
“Small businesses are at the heart of the economy and the community in Thurrock, the Government should be doing everything they can to help them as they face difficult times.
“That’s why Labour are calling on the government to use the hundreds of millions of pounds of unspent money allocated to national insurance holiday to extend the tax break to all small firms, as part of our five point plan for jobs and growth. This could help up to 2,790 companies here in Thurrock.
“By extending the scheme to include Thurrock, the Tory-led Government could help support up to 210, 000 small businesses across the region, helping them to grow and take on workers.”
Owen Smith MP, Labour’s shadow exchequer secretary to the Treasury, said:
“Small firms are the lifeblood of our economy, but they have been badly let down by this Conservative-led government. Spending cuts and tax rises that go too far and too fast have crushed confidence and choked off the recovery well before the eurozone crisis.
“The one flagship policy that could have made a difference has been a total flop, supporting just one in forty businesses who were promised help. And shockingly, the government is set to spend twice as much on admin costs than it has so far paid out in support to businesses.
“Out of touch Ministers need to wake up to the jobs and growth crisis facing our country in 2012 and start doing something about it. They also need to realise that more people out of work on benefits just makes it harder to get the deficit down, which is why the government is now set to borrow a staggering £158 billion more than they planned.”