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NIC rise will not help job creation, say small firms


They have welcomed the announcement that 345,000 will be taken out of the business rates system, having campaigned for such a move.
They have also welcomed the setting up of a credit adjudicator, to which small firms can appeal if banks reject their application for a loan.
Carole Hegley (pictured), chair of the FSB Luton and South Bedfordshire branch, said: "This Budget has provided welcome news on helping to improve small businesses’ cashflow but the increase in the NICs will be bad for job creation.
"Small firms are key to furthering economic recovery as the UK’s largest employer and we are concerned that continuing plans to increase employer National Insurance Contributions and not introducing a NICs holiday to firms employing less than 50 staff who take on more employees will prevent firms from taking on additional staff.”
FSB research has indicated that the 1% rise would cost 57,000 jobs across the UK as a result of non-recruitment. Mrs Hegley said: “It is a tax on jobs which will do nothing to aid economic growth.”
She welcomed the government’s commitment to get the banks lending to small businesses but feels the targets will have little impact if the banks do not begin to offer more affordable finance.
One-third of 10,000 FSB members surveyed recently said the cost of finance had increased over the previous 12 months despite the Bank of England Base rate being at an all-time low.
Mrs Hegley said: “The government must now put pressure on the banks to lend affordable finance to small businesses so they can get on with the job. The role of the new credit adjudicator will be key, and the FSB looks forward to working with this new institution."